Unaudited operating profits of the country's private commercial banks (PCBs) registered a slow growth in the just-concluded year 2016, due mainly to the swelling of classified loans, bankers said.
Most of the banks, excepting a few, maintained their operating-profits growth despite a downturn in interest-rate spread, according to them.
The weighted average spread between lending and deposit rates offered by the commercial banks came down to 4.70 per cent in October from 4.84 per cent in January 2016.
Besides, an upturn in written-off loans also pushed down the operating profits of the banks in the calendar year people just rang out, they explained.
The cumulative amount of loans written off by the banks rose to Tk 423.22 billion as on June 30, 2016 from Tk 412.01 billion on December 2015. The volume was Tk 376.45 billion a year before.
On the other hand, the amount of classified loans in the country's banking sector jumped by nearly 28 per cent or Tk 143.60 billion to Tk 657.31 billion as on September 30 last from Tk 513.71 billion as on December 2015. "Some banks have been able to increase their amounts of operating profits following higher earnings from treasury operations," a senior official of a leading private commercial bank (PCB) told the FE Saturday.
Banks having OBU (Offshore Banking Units) operations with sizeable amounts earned significantly through providing foreign-currency loans to their customers, according to the private banker.
Operating profit, however, does not indicate the real financial health of a bank. Because, the banks have to make room for provisioning against bad loans and taxes that have to be paid to government from such profits.
Operating profits of banks and non-banking financial institutions are a major source of income taxes collected from business entities by the National Board of Revenue (NBR).
As such, the aggregate position of operating profits of PCBs has an impact -- favourable or otherwise -- on revenue collection, in the form of direct taxes, collected by the NBR, depending upon the level of such profits.
The FE could collect figures on operating profits of 26 banks, out of a total of 39, including nine new PCBs, until our going to press at 10:00 pm Saturday.
Of those banks, Islami Bank Bangladesh Ltd. (IBBL) was the top earner of operating profit in 2016. Its earnings rose to Tk 20.03 billion in 2016 from Tk 18.08 billion a year ago.
Southeast Bank Ltd stood in the second position with an estimated earning of Tk 8.63 billion in operating profit -- up from Tk 8.34 billion in 2015.
United Commercial Bank Ltd was third with an estimated earning of around Tk 8.15 billion in operating profit, compared to Tk 8.40 billion in 2015.
The operating profit of Pubali Bank Ltd came down to Tk 7.20 billion in 2016 from Tk 7.80 billion in 2015 and Bank Asia Ltd's to Tk 5.95 billion from Tk 6.0 billion.
Al-Arafah Islami Bank made an operating profit worth Tk 7.54 billion in 2016 against Tk 6.28 billion of the previous year while Mutual Trust Bank earned Tk 3.69 billion, up from Tk 3.03 billion in 2015.
The operating profits of EXIM Bank rose to Tk 6.90 billion in 2016 from Tk 6.50 billion and Social Islami Bank Ltd (SIBL) to Tk 6.20 billion from Tk 5.48 billion.
Mercantile Bank booked an operating profit worth Tk 5.08 billion in 2016 against Tk 4.14 billion of the previous year while Meghna Bank's rose to Tk 1.02 billion from Tk 700 million.
The operating profit of the National Credit and Commerce Bank Ltd (NCCBL) rose to Tk 4.70 billion in 2016 from Tk 4.16 billion in the previous year while Shahjalal Islami Bank's reached Tk 3.14 billion from Tk 2.75 billion.
The South Bangla Agriculture Bank posted an operating profit worth Tk 1.54 billion in 2016 against Tk 830 million in 2015 while NRB Commercial Bank's profit rose to Tk 1.72 billion from Tk 1.06 billion.
The operating profit of Modhumoti Bank Ltd came down to Tk 920 million in 2016 from Tk 1.06 billion a year ago.
Jamuna Bank booked an operating profit worth Tk 4.50 billion in 2016 against Tk 4.0 billion of the previous year while NRB Bank's rose to Tk 810 million from Tk 390 million.
Farmers Bank Ltd saw its profit rise to Tk 1.01 billion in 2016 from Tk 650 million in the previous year.
The operating profit of Standard Bank rose to Tk 3.75 billion in 2016 from Tk 3.61 billion in the previous year while Premier Bank's reached Tk 3.50 billion from Tk 1.96 billion.
The Eastern Bank posted an operating profit worth around Tk 7.0 billion in 2016 against Tk 5.20 billion in 2015 while Union Bank's profit grew to Tk 1.88 billion from Tk 1.03 billion.
The Prime Bank posted an operating profit worth Tk 6.25 billion in 2016 against Tk 6.15 billion in 2015 while One Bank's profit rose to Tk 4.52 billion from Tk 4.20 billion.
IFIC Bank's profit rose to Tk. 4.30 billion in 2016 from Tk. 4.06 billion a year ago.
siddique.islam@gmail.com
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