NPL volume bulges further

The non-performing loans (NPLs) jumped by more than 21 per cent or Tk 108.01 billion in the last calendar year despite close monitoring by the central bank.

The amount rose to Tk 621.72 billion as on December 31 last year from Tk 513.71 billion on the same day of the previous year, according to the latest statistics of Bangladesh Bank (BB).

Officials, however, said stronger recovery drives by the commercial banks and the rescheduling of loans pushed down the NPLs in the final quarter of the last calendar year.

During the October-December period of 2016, the NPLs dropped by more than 5.0 per cent or Tk 35.59 billion to Tk 621.72 billion from Tk 657.31 billion in the Q3. It was Tk 633.65 billion in the Q2.

The share of NPLs also came down to 9. 23 per cent during the period under review from 10.34 per cent three months back. It was 8.79 per cent as on December 31, 2015.

"The volume of classified loans normally falls during the final quarter of each calendar year," a senior official of the BB told the FE Thursday.

He also expressed concern that the amount of NPLs might rise in the first quarter of this year due to slow pace of recovery by the commercial banks.

The classified loans covered substandard, doubtful and bad/loss of total outstanding credits, which stood at Tk 6,739.20 billion as on December 31 last. It was Tk 5,846.15 billion a year ago.

Talking to the FE, Syed Mahbubur Rahman, managing director and chief executive officer (CEO) of Dhaka Bank Ltd, said the volume of NPLs dropped in the October-December period of last year, following the rising trend of new loans, recovery and rescheduling.

Mr. Rahman also admitted that the amount of classified loans might rise slightly in the Q1 of this year.

siddique.islam@gmail.com