85% of default loans concentrated in just 15 banks

Highlights:
·
Fifteen
lenders hold 85 percent default loans
·
Stressed
banks hold Tk 4.99 lakh crore
·
Islami
Bank records highest non-performing loans
Fifteen of the country’s 61 banks accounted for as
much as 85 percent of defaulted loans as of March, according to central bank
data, highlighting how loan irregularities, fraud and financial scams have
become concentrated in a small group of commercial lenders.
Combined non-performing loans (NPLs) in these banks
stood at more than Tk 4.99 lakh crore, out of total classified loans of around
Tk 5.88 lakh crore across the banking sector, according to Bangladesh Bank (BB)
data.
The stressed lenders are Agrani Bank, Janata Bank,
Rupali Bank, Sonali Bank, AB Bank, Exim Bank, First Security Islami Bank,
Global Islami Bank, Social Islami Bank, Union Bank, Islami Bank Bangladesh,
IFIC Bank, National Bank, Padma Bank and Bangladesh Krishi Bank.
They were selected based on both the volume and ratio
of defaulted loans.
In terms of volume, Islami Bank Bangladesh has the
highest NPLs at Tk 95,629 crore, equivalent to 50.88 percent of its total
loans.
The bank was taken over by the S Alam Group in 2017.
The controversial conglomerate later extended around 80 percent of the bank’s
total loans to its own companies and associated firms, violating banking rules
and regulations.
After the fall of the Awami League-led government in
August 2024, the bank was freed from the group’s control and is now running
under the supervision of BB through a board of independent directors.
The country’s largest shariah-based bank is now facing
fresh uncertainty over the appointment of a new chairman.
“A large share of its defaulted loans is linked to the
S Alam Group, with recovery remaining minimal,” said Md Altaf Hossain, acting
managing director of the bank.
He told The Daily Star that the bank is trying to
recover loans from other borrowers, but progress has been limited as even
regular customers have become reluctant to repay.
“Under the current circumstances, the bank is
prioritising the prevention of deposit withdrawals, while loan recovery efforts
have received less attention,” he added.
At Exim Bank, bad loans stood at Tk 36,724 crore in
March, representing 68.58 percent of total loans.
The bank was largely influenced by Nazrul Islam
Mazumder, chairman of Nassa Group and former chairman of the Bangladesh
Association of Banks (BAB). Loan irregularities and weak corporate governance
have pushed the lender into a merger process with four other troubled banks.
Among lenders linked to the S Alam Group, First
Security Islami Bank reported NPLs of Tk 60,843 crore, or 97.39 percent of
total loans.
Global Islami Bank’s NPLs stood at Tk 14,243 crore, or
97.47 percent, while Social Islami Bank reported NPLs of Tk 30,439 crore, or 80
percent. Union Bank recorded NPLs of Tk 27,102 crore, or 97 percent of its loan
portfolio.
These banks were heavily influenced by the S Alam
Group, which secured a large portion of loans from them.
AB Bank’s NPLs stood at Tk 19,506.79 crore, accounting
for 54 percent of total loans, while National Bank reported Tk 24,305 crore, or
57 percent.
Both lenders faced loan irregularities, governance failures
and financial scandals during the Awami League government.
IFIC Bank was dominated by Salman F Rahman,
vice-chairman of Beximco Group and an influential adviser to ousted prime
minister Sheikh Hasina. Its bad loans stood at Tk 28,174 crore in March,
equivalent to 63.36 percent of total loans.
Md Mehmood Husain, independent director and current
chairman of the bank, said the volume of defaulted loans has not increased
significantly, although the ratio has risen.
“We are trying to bring it down. The increase in the
ratio of bad loans is mainly due to the lack of loan growth; in fact, the
overall loan portfolio is shrinking, which has pushed up the proportion of
non-performing loans,” he said.
He added that the ratio is expected to ease somewhat
by the end of June, with efforts focused on reducing losses.
At crisis-hit Padma Bank, bad loans stood at Tk 5,026
crore, representing 91 percent of total loans.
Among state-owned lenders, Janata Bank reported the
highest volume of bad loans at Tk 74,996 crore, or 67.4 percent of its
portfolio. Agrani Bank’s NPLs stood at Tk 28,899 crore, or 40 percent, while
Rupali Bank reported Tk 20,319 crore, or 43.37 percent. Sonali Bank recorded Tk
16,242 crore, equivalent to 17.85 percent.
NPLs at Bangladesh Krishi Bank stood at Tk 17,102
crore, or 47 percent of total loans.
















