A CAMELS rating of the central bank has found one-step improvement of three state-owned commercial banks (SoCBs), while the status of another SoCB remains unchanged.
The evaluation, which took into account capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risks, the acronym of which is CAMELS, was based on the SoCBs' performance until December 31, 2013.
Composite CAMELS rating of three SoCBs - Sonali Bank Limited, Janata Bank Limited and Agrani Bank Limited - improved one step than previous quarter of the last calendar year, while the same of Rupali Bank Limited has not changed, officials said.
Among the three SoCBs, overall composite rating level of Sonali Bank improved to 'marginal' as on December 31 last year from 'unsatisfactory' in three months back from the date, while the position of Janata Bank and Agrani Bank upgraded to 'fair' from 'marginal'.
Performance of Rupali Bank remained unchanged at 'marginal' level, they said.
The capital adequacy level of all the SoCBs improved during the period under review, as the government injected Tk 41 billion in December 26 last year for their re-capitalisation.
Following relaxation of the loan rescheduling policy, asset quality position of the SoCBs improved 'a lot' along with their asset quality rating.
On December 23, the Bangladesh Bank (BB) relaxed the loan rescheduling policy on a limited scale for the next six months to facilitate financing for the businesses, affected by political unrest.
Following the relaxation, BB allowed the banks to reschedule loans by fixing their down payment and time limit for repayment on bank-customer relationship.
However, considering all these factors, asset quality rating was downgraded one step through applying qualitative judgment, according to the BB officials.
They also said management rating of Sonali, Janata and Agrani experienced one step upgradation.
BB's Department of Off-Site Supervision (DoS) issues necessary instructions to overcome deficiencies on the basis of CAMELS rating every quarter.
"We've taken different measures to improve the SoCBs' overall financial health," a senior official of the central bank told the FE.
He also said a revised memorandum of understanding (MoU) has already been signed by the SoCBs in this connection.
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