The operating profits of most private commercial banks in the country declined by 20% to 30% in the first half of 2020 due mainly to lending rate capping and depressed economy caused by the new coronavirus.
The figure, however, is provisional as operating profit is estimated without deduction of provisioning against stressed loans and corporate taxes.
Dhaka Tribune has obtained data of 15 banks’ operating profits. It is found that most of the banks’ faced slow growth in their profits compared to a year earlier.
The situation was caused mainly to interest and lending rates’ capping decision of the government.
The interest income of banks started declining from April as the 9% lending rate came into effect from the month, sources in the banking sector have said.
Talking to Dhaka Tribune, former chairman of the Association of Bankers, Bangladesh (ABB), Syed Mahbubur Rahman ha said the coronavirus negatively impacted on banks operating profits. Banks export and import business was also hampered badly due to the coronavirus pandemic.
On the other hand, the banking sector implemented the single digit lending rate from April this year so the income from interest reduced, impacting on banks’ operating profits, he adds.
According to available data, Southeast Bank earned a profit of Tk342 crore in the first half of this year, which was Tk505 crore in the same period last year.
Pubali Bank made an operating profit of Tk405 crore as of June of 2020, against its profit of Tk540 in the same period last year.
Mercantile Bank earned a profit of Tk243 crore in the first half of this year, which was Tk331crore in the same period of 2019.
Exim Bank made a profit of Tk317 crore during the period, down from Tk330crore made in the same period of 2019.
However, Rupali Banks’ operating profit rose to Tk130 crore from Tk75 crore of previous year.