bdnews24.com :
The banking sector has made a turnaround after a turbulent year marred by political violence and unrest.
The operating profits of most private banks in the first six months of this year have risen significantly compared to the six months before that.
At least 14 publicly listed banks reported increased operating profits at the end of June.
However, bankers are saying the real profits may be significantly lower after proper loan classification and provisioning.
Eastern Bank Limited MD Ali Reza Iftekhar said he believed operating profits would go down significantly after tax reductions.
“That’s because the banks had to do provisioning at a high rate,” he said. As a result the banks’ earnings per share may go down.
Pubali Bank Chairman Helal Ahmed Chowdhury said, “Overall conditions in the country are better than last year’s. Still, the impact of the political unrest hasn’t subsided completely.”
“The good thing is investment is turning around.”
“Right now there’es excess liquidity in the banks, non-performing loans are on the rise. Therefore there’s more provisioning,” he explained.
Among these banks, Islami Bank’s operating profits are Tk 1.5 billion less than the same period last year.
SEC has put a ban on disclosing the information on operating profits as they are sensitive information. Bangladesh Bank has also agreed to the ban.
The growth of private sector loans has slowed significantly.
According to the central bank, from January to April this year private sector loans have increased at a rate of 11.9 percent.
However, in its monetary policy statement the central bank has forecast that the growth will accelerate to 16.5 percent by the end of June.
According to Bangladesh Bank, the banks have a total of Tk 1.1 trillion in excess liquidity right now.
