Banks retain hefty operating profits

The banking industry has seen a robust growth in operating profits during the first half (H1) of the current year compared with the corresponding period of the last year. The majority of the banks were reported to have retained higher growth of operating profits than the first half of the last year.

Banking insiders think that the hefty upturn of operating profits are due to growth of lending, low-cost deposits, income generation from operation of offshore banking units and profits realised from treasury. High operating profits are registered at a time when banking industry hiccups in high non-performing loans (NPLs) and soaring of liquidity crunch.

However, operating profits do not indicate actual profits and there is no room for compliance with the upbeat of operating profits. After deduction of provisions and taxes, real profits are calculated.

The operating profits could have been higher if the defaulted loans had been realised.

Mohammad Zonaed Emran

MTB MNC Banking Unit

[email protected]