Most banks have posted notable growth in their earnings this year, thanks to both regulatory support and steady recovery of economic activities.
Among the 32 publicly listed banks, 26 have reported hikes in their profitability during the first nine months of 2021 in comparison to the same period of the previous year.
The recent years have been a roller coaster for the banking sector with issues ranging from the Covid-19 pandemic challenges to the introduction of caps for lending and borrowing rates.
Speaking with industry insiders, Dhaka Tribune learnt that easing of provision requirements last year provided some breathing room for the banks.
Gains from bonds amid a low-interest rate regime coupled with a vibrant stock market were blessings for many banks in dire situations post nationwide shutdown.
The Dhaka Tribune accumulated the 9-month earnings for the years 2020 and 2021 of all the publicly listed banks based on their declaration over the stock exchange websites.
Standard Bank, Prime Bank and Mercantile Bank have doubled their earnings over the period.
According to the declarations, the six banks posting negative growth are SBAC Bank, National Bank, Exim Bank, Rupali Bank, Mutual Trust Bank and ICBI Bank.
ICBI Bank is the only bank posting losses in both years for the 9-month period.
Managing Director and CEO of Premier Bank Reazul Karim said: “Every sector, be it banking or the stock market, had negative growth due to the adverse effects of Covid-19 last year. But we recovered from the situation at the beginning of this year.”
While the situation did not fully normalise yet, the year-on-year comparison will seem a lot since the comparison is with the Covid-affected year, he added.
Considering all this, it will be difficult for the banks to achieve growth rates like this, Karim further said.
The Premier Bank chief also believes that the government helped a lot in this.
“Since Bangladesh Bank and the Bangladesh Securities Exchange Commission [BSEC] had such a massive contribution to this, any incoordination between them will also lead to a catastrophe,” he further said.
Meanwhile, researcher and an analyst of the banking sector Mohammad Rehan Kabir believes that the 20-30% positive growth in the capital market this year is due to the banks performing well in both interest and investment.
Echoing Reazul Karim, he said that it will be challenging for the banks to keep this up.
However, Kabir said that one of the reasons might be getting back the loans that were given during the Covid-19 period.
“The second reason is the conflict between Bangladesh Bank and BSEC. The banks are in a dilemma due to this. This will definitely have a negative impact on the investors if this conflict continues,” he further said.