Business Desk :
The Bangladesh subsidiary of the British bank logged in profit-after-tax of Tk 1,367.5 crore (about $161 million) for the year — the highest yet in its 116 years of operations in the country
2020 will perhaps go down as the year in which Standard Chartered Bangladesh showed its mettle, outperforming its parent company, whose earnings took a massive hit for the pandemic.
The Bangladesh subsidiary of the British bank logged in profit-after-tax of Tk 1,367.5 crore (about $161 million) for the year — the highest yet in its 116 years of operations in the country.
The amount is an increase of 6.6 per cent from a year earlier, its first single-digit profit growth in three years. “In a year with so much adversity, this is quite a good result for us,” Naser Ezaz Bijoy, chief executive officer of Standard Chartered Bangladesh, told Dhaka Tribune.
Standard Chartered Bangladesh’s performance in 2020 is in stark contrast to its parent company, which saw its pre-tax profit crash 57 per cent to $1.6 billion on higher credit impairments due to the pandemic.
However, it is in line with the Indian subsidiary, whose profit-before-tax quadrupled to $337 million in 2020. While the London-headquartered bank’s interest income fell 15.4 per cent to Tk 1,885.9 crore, its interest expense also came down.
The interest rate cap from April 1 last year was a factor, according to Bijoy.
This was offset by the income from investment, which more than doubled to Tk 496.1 crore. The bank invested heavily in 91-day Treasury bills last year: from Tk 538.7 crore in 2019 to Tk 1,629.9 crore.
At the end of 2020, Standard Chartered Bangladesh’s loans and advances stood at Tk 21622.8 crore, down 13.9 per cent year-on-year.
“There were muted economic activities and the demand for credit was low,” said Bijoy, who took charge of the lender in November 2017 from Abrar Anwar.
In 2020, private sector credit growth averaged 8.9 per cent, in contrast to 10.4 per cent a year earlier, as jittery businesses went on a self-preservation mode, putting their investment plans and businesses on hold indefinitely, according to data from the Bangladesh Bank.
Besides, the bank played it safe with its lending activities.
“We had a cautious approach in a high-risk environment — our primary focus was the quality of the book.” Its default loans at the end of 2020 accounted for 1.62 per cent of its total outstanding loans, down from 1.67 per cent. At the end of last year, the banking sector’s default loan ratio was 7.7 per cent.
