Bangladesh: Banking 1

Banks record 29% operating profits in 2005

The country's private commercial banks (PCBs) witnessed a hefty growth -- by about 29.10% -- of their aggregate operating profits in calendar year 2005 over those of the previous one.

The operating profit of the 29 PCBs out of a total of 30 increased by over Tk 6.0 billion to Tk 28.24 billion in calendar 2005, from Taka 21.88 billion in calendar 2004. The profit figure of the Oriental Bank Ltd was not available. Most of the third generation banks, which started operation in the late 1990s, performed well in terms of operating profit, the provisional data indicated.

Sources, however, said the operating profit does not indicate the real financial position of a bank. Because, the banks have to leave aside provisioning against bad debts and taxes that are paid to the government from the operating profit.
According to the central bank statistics, at least 8 PCBs faced provisioning shortfall amounting to Tk 4.02 billion as on September 30, 2005.

The Islami Bank Bangladesh Limited held the top position among the PCBs, earning Tk 2.89 billion in operating profit in 2005 against Tk 2.39 billion in the previous 2004. The Prime Bank Ltd., however, was in 2nd position with an earning of Tk 1.66 billion in operating profit in the last year against Tk 1.37 billion in the previous one. The Uttara Bank Ltd. secured the 3rd position with Tk 1.61 billion in operating profit last year compared to Tk 1.24 billion in the previous year.

Meanwhile, at least 2 PCBs - the Social Investment Bank Ltd. (SIBL) and First Security Bank Ltd. - out of 29 under report, recorded lower operating profits last year due mainly to higher bad debts and thin business, the sources noted.

The operating profit of the SIBL dropped to Tk 210 million in 2005 from Tk 420 million in 2004, while that of the First Security Bank Ltd, from Tk 390 million in 2004 to Tk 13.51 million in 2005. The operating profits of the Southeast Bank Ltd. and Pubali Bank Ltd. were Tk 1.54 billion and Tk 1.52 billion respectively in 2005 against Tk 880 million and Tk 750 million in the previous year.

The City Bank Ltd. earned Tk 1.35 billion in operating profit in 2005 followed by the United Commercial Bank Ltd. (UCBL) with Tk 1.20 billion. The amounts were Tk 950 million for the City Bank Ltd. and Tk 900 million for the UCBL in 2004. The operating profits of the National Bank Ltd. (NBL) and the EXIM Bank Ltd. were Tk 1.20 billion and Tk 1.15 billion respectively in 2005 against Tk 1.12 billion and Tk 830 million in 2004.

Arab Bangladesh (AB) Bank Ltd. earned Tk 1.05 billion in operating profit in 2005 followed by the Mercantile Bank Ltd. with Tk 1.03 billion. The amounts were Tk 720 million for the AB Bank Ltd. and Tk 870 million for the Mercantile Bank Ltd. in 2004.

The operating profits of the Dhaka Bank Ltd. and the National Commerce and Credit Bank Ltd. (NCCBL) were at the same level -- at Tk 1.02 billion in 2005 -- against Tk 850 million and Tk 720 million in the previous year.

On the other hand, the operating profits of the Dutch-Bangla Bank Ltd. and the Eastern Bank Ltd (EBL). were also at the same level -- at Tk 1.01 billion in the last year -- compared to Tk 680 million and Tk 910 million in the previous one.

The Premier Bank Ltd. earned Tk 900 million in operating profit in 2005 followed by the Bank Asia Ltd., with Tk 810 million. The amount was Tk 930 million for the Premier Bank and Tk 660 million for the Bank Asia in 2004. The operating profits of the BASIC Bank Ltd. and the IFIC Bank Ltd. were Tk 800 million and Tk 780 million respectively in 2005 against Tk 720 million and Tk 780 million in 2004.

The Mutual Trust Bank Ltd. made operating profit worth Tk 670 million in 2005 against Tk 520 million in 2004, while the figure for the Standard Bank Ltd. stood at Tk 630 million against Tk 490 million in 2004. The operating profits of the One Bank Ltd. and the BRAC Bank Ltd. were Tk 610 million and Tk 600 million respectively in 2005 against Tk 490 million and Tk 210 million in the previous year.

The Al-Arafah Islami Bank Ltd. earned Tk 600 million in operating profit in 2005 followed by the Shahjalal Islami Bank Ltd. with Tk 501 million. The amounts were Tk 370 million for Al-Arafah Islami Bank and Tk 120 million for the Shahjalal Bank in 2004.

The Jamuna Bank Ltd. made operating profit worth Tk 450 million in 2005 against Tk 320 million in 2004, while the figure for the Trust Bank Ltd. stood at Tk 310 million in 2005 compared to Tk 28 million in 2004.