The trouble-hit BASIC Bank incurred a highest loss of Tk2,686 crore in 2014 because of spillover effects of loan scams of the previous years.
“The bank has finally shown the accumulated loss of the previous years at the end of the last year as the prior board had earlier concealed the actual picture of financial condition of the bank”, said BASIC Bank Chairman Alauddin A Majid while talking to the Dhaka Tribune.
“Although the amount of loss incurred in the year 2014 seems to be unusually high, we just tried to give a clear picture about the health of the bank,” he said.
Of the other state-owned banks, Sonali Bank made net profit of Tk492 crore, Janata Bank Tk394 crore, Agrani Bank Tk377 crore, Rupali Bank Tk46 crore while BDBL Tk143 crore in the last year.
The state-run BASIC bank had to meet the provision shortfall in last year, which also pushed the net loss to a higher level, said a senior executive of Bangladesh Bank.
The provision shortfall of the bank stood at zero at the end of the year 2014, which was Tk789 crore in the previous year, according to the central bank data.
The bank plunged into a loss of Tk53 crore for the first time in the year 2013 since its inception, compared to the net profit of over Tk2 crore in 2012.
The loss increased by 153.52% during last year as the bank witnessed a negative growth with the piling of the default loans over the years.
The operating loss of the BASIC bank was around Tk111 crore in the last year compared to operating profit of Tk147 crore in the previous year.
The bank has failed to get any income from more than half of its assets, which turned into default for last two years, said another senior executive officer of the central bank.
As the provisioning requirements of the bank are increasing as well as default loans, it badly hit the earnings of the bank, he said.
He also observed: “The interest income has accumulated to the suspense account as the bank could not show the interest in the income statement.”
The default loans of the bank rose to 53.32% or Tk6,310 crore at the end of the year 2014, more than half of the total assets of Tk11,834 crore, according to the Bangladesh Bank data.
The interest to the suspense account rose to Tk419 crore during the last year compared to Tk173 crore in the previous year.
Both the return from asset and equity deteriorated further to negative 15.70% and 210.66% respectively in the last year compared to negative 0.34% and 8.80% in the previous year.
The capital shortfall of the bank stood at Tk2,223 crore at the end of the year 2014. Though the bank got the capital support of Tk790 crore from the government on December 29 last year, it did not reflect in the annual balance sheet.
Attending a recent meeting with Bangladesh Bank, BASIC Managing Director Khondoker Md Iqbal expressed his hope that the financial picture of the bank would changed by June this year after adjusting the government fund.
The bank rescheduled loans of around Tk3,000 crore during last two years, taking advantages of relaxed rescheduling policy, according to the central bank data.
Of the amount, loans over Tk1,725 crore were rescheduled during last year and Tk1,151 crore were rescheduled in the previous year.
A Bangladesh Bank inspection detected many irregularities in four branches of state-owned Basic Bank-Motijheel, Shantinagar, Dilkusha and Gulshan branches that involved loans of nearly Tk4,424.93 crore between December 2009 and November 2012.
Source: Dhaka Tribune
