Operating profits of most banks rise
Published: 04:10 PM, 1 January 2020 Updated: 04:32 PM, 1 January 2020
The operating profits of most state-run commercial banks rose at the end of the year — although the banks are still worried about whether the net profit will rise even if the operating profit increases.
According to the latest data available from various banks on Tuesday, the total operating profit of the state-owned Rupali Bank has been Tk 1,050 crore at the end of the banking period in 2019 – which was Tk 1,010 crore in 2018.
Islami Bank’s operating profit has been Tk 2,880 crore – which was Tk 2,770 crore in 2018.
The operating profit of Pubali Bank has increased to Tk 1,040 crore – which was Tk 1,025 crore in 2018.
Southeast Bank’s operating profit stood at Tk 1,025 crore, up from Tk 1,012 crore in the previous year. Eastern Bank’s stood at Tk 900 crore, up from Tk 780 crore in the previous year. City Bank’s operating profit stood at Tk 825 crore, up from Tk 681 crore in the previous year.
Al-Arafah Islami Bank, on the other hand, made a profit of Tk 801 crore, while it was Tk 640 crore in 2018. Exim Bank has a profit of Tk 780 crore, which was Tk 750 crore in the previous year. Mercantile Bank’s profit was Tk 753 crore, up from Tk 673 crore in the previous year.
Jamuna Bank’s operating profit stands at Tk 730 crore – the previous year it was Tk 620 crore. Social Islami Bank’s operating profit was Tk 682 crore, up from Tk 667 crore in the previous year. IFIC Bank’s operating profit was Tk 675 crore, up from Tk 504 crore in the previous year.
NRB Commercial Bank’s Tk 262 crore, which was Tk 203 crore in 2018, South Bangla Agricultural Bank’s operating profit was Tk 228 crore, up from Tk 203 crore last year.
Besides, National Bank’s operating profit was Tk 948 crore, which was down by Tk 1,229 crore in the previous year.
The profit of Union Bank was Tk 275 crore, One Bank’s Tk 433 crore, Madhumati Bank’s 218 crore, Prime Bank’s Tk 700 crore, and Bank Asia’s operating profit was Tk 940 crore at the end of 2019.
According to Statistics of Bangladesh Bank, the amount of loan distribution in the bank sector at the end of September 2019, was Tk 9,69,882 crore. Except for the deduction, the defaulted loan stands at around Tk 1,16,288 crore - which was 11.99 percent of the total debt.
And the amount of defaulted loans, including abolition, exceed Tk 1.5 lakh crore - which was Tk 93,991 crore at the end of December 2018. On the basis of this, in the last nine months, defaulted loans have risen to Tk 22,009 crore.
Managing director of a private bank, willing to disclose the name, said the growth of any business is very natural. “The operating profit of the banks also increased compared to the same period last year.”
However, the bank’s operating profit is not a real profit. The net or actual profit is calculated at the end of the year, excluding tax, management and many other things. As a result, profits do not seem to be increasing too much, he added.
It is learned that the banks will have to keep provision against the regular loan and defaulted loan from the opearting profits.
Provisions against regular loans should be kept at 1-2 percent, 20 percent for low credit loans, 50 percent for doubtful loans and 100 percent for bad loans. The reserve should then take a portion of the fund to raise capital. Then 40 percent income tax has to pay.
Shareholders’ dividends are paid from what remains. As a result, investors in the stock market will have to wait until the net or actual profit is calculated. In many cases, net profit will not be distributed in the form of a dividend.
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