The performance of four-state owned banks in default loan recovery has deteriorated further in last year despite efforts by Bangladesh Bank.
All the four banks – Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank – failed to achieve their respective recovery target set in the Memorandum of Understanding (MoU) for the year 2014.
Rather, their performance worsened than the previous year (2013), according to the MoU review report of the central bank.
“Despite having poor performance in loan recovery, the state-owned four banks successfully pulled down their non-performing loan rates in line with the central bank’s expectation through huge loan rescheduling,” said a senior executive of the central bank.
According to the report, Sonali Bank recovered cash of around Tk80 crore in the last year from top 20 defaulters, which was only 25.33% against its set target worth Tk315 crore, while the rate of recovery was 36.87% or Tk111 crore against the target of Tk301 crore in the previous year.
The cash recovery from other top defaulters of the Sonali Bank stood at Tk658 crore, 37% of the target of Tk1,785 crore in the last year. The recovery rate was 50% or Tk1,355 crore against the target of Tk2,712 crore in the year 2013.
The Janata Bank achieved only 25% or Tk30 crore of the loan recovery target of Tk120 crore from the top defaulters in the last year. The rate of recovery was 117% or Tk112 crore against the target of Tk96 crore in the year 2013, according to the review report.
The loan recovery from the other defaulters of Janata Bank, however, improved to 126% of the target in the last year compared to the rate of 69% in the previous year.
Agrani Bank was ahead in the race of default loan recovery with achieving 72.63% of the target or Tk109 crore from top defaulters in the last year compared to the rate of 42% or Tk48 crore in the previous year.
The bank also achieved 40.31% of the loan recovery target from the other defaulters in the last year which was close to the target achieved in the previous year.
The performance of Rupali Bank was the poorest, among the four banks, in case of loan recovery from the top defaulters. The bank achieved 52.61% or Tk20 crore of the target in the last year compared to the rate of 217% or Tk104 crore achieved against the target in the previous year.
The bank, however, improved in loan recovery from other defaulters with achieving 94% of the target in the last year compared to the rate of 46% that achieved in the previous year.
The four banks rescheduled around loans of Tk2,000 crore in the first nine months of the last year, taking advantages of relaxed reschedule policy, according to the central bank data.
Though the performance of the four banks in loan recovery was weak, the banks were, however, able to slightly improve their loan growths, operating expenses and capital management, according to the MoU review report.
The adjusted loan growth of Janata, Agrani and Rupali improved to 10%, 9% and 11.40% respectively in the last year compared to the growth of 1.15%, negative 0.63% and 14% in the previous year.
The loan growth of only Sonali Bank was worse to negative 6.70% against the target of 6% in the last year compared to the growth of negative 7% in the previous year.
Sonali and Janata banks maintained their operating expenses within the limit set in the MoU while other two banks were slightly beyond the limit. The capital shortfall of Sonali Bank stood at Tk394 crore in December last year despite recapitalisation of Tk710 crore last year.
The Rupali Bank also fell in capital shortfall of Tk200 crore in December last year. The other two banks Janata and Agrani, however, maintained surplus capital of Tk108 crore and Tk143 crore respectively in last year.
Source: Dhaka Tribune
