The performance of six state-owned commercial and specialised banks were unsatisfactory in the first quarter of this year while the condition of Sonali Bank worsened, according to the latest CAMEL rating by Bangladesh Bank.
Bangladesh Development Bank ranked first in the rating, in which capital, asset, management, earning and liquidity (CAMEL) are used as indicators for measuring the banks’ performance.
Janata, Agrani and Rupali banks were ranked at second position, according to the rating in March 2013. The central bank evaluates the performance of the state-owned banks on the basis of the CAMEL rating.
The ratings on state-owned banks were presented to Finance Minister AMA Muhith at a recent meeting at the finance ministry with the chairmen and managing directors of the six banks.
Meanwhile, Credit Rating Agencies of Bangladesh (CRAB) has recently downgraded BASIC Bank’s rating by five notches to BBB1 from AA2, a year ago, because of worries about bad governance and a buildup of nonperforming loans in the state-run bank.
Once a healthy bank, BASIC Bank came to the spotlight in recent months after the central bank unearthed major irregularities, involving around Tk40bn.
Sonali Bank scored 5 in the CAMEL rating, which is unsatisfactory performance, while Janata, Agrani and Rupali banks secured a score of 4 which puts those banks’ performance position at a marginal level, according to Bangladesh Bank data.
Mahfuzur Rahman, executive director and spokesperson of Bangladesh Bank, said the performance of the state-owned banks have gone up and down over time. “We are monitoring the state owned banks according to the MOU.”