PCBs\\\' operating profits show uptrend in H1

The operating profits of the country's private commercial banks (PCBs) showed an upward trend in the first half (H1) of the current calendar year (2014).
According to the bankers, the profits increased, as interest rates on deposits were lower than lending rates and foreign trade operations were sound.
Of the 30 PCBs, excepting the nine new ones, 11 saw an uptrend in operating profits, while one witnessed a slight fall, according to provisional data. The data regarding the rest 18 banks was not immediately available.
In the final count, the amount of profit may be a little higher or lower, said officials of different PCBs.
The un-audited operating profit, however, does not indicate the actual financial position of a bank, as the banks have to leave aside funds for provisioning bad debts and taxes payable to the public exchequer.
An upturn in both export and import trade has substantially helped the commercial banks to raise their operating profits in the first half of 2014 over the corresponding period of the previous year, bankers said Tuesday.
Most of the PCBs had faced a downturn in operating profits in the first six months of 2013, due mainly to lower import payments. Political uncertainty for a standoff over the general election played its part in the economic slowdown, they added.
The country's export earnings grew 12.56 per cent to $27.38 billion in the first 11 months of the just concluded fiscal year (FY), 2013-14, compared to the same period a year ago, according to the state-run Export Promotion Bureau (EPB).
On the other hand, overall imports in terms of settlement of letters of credit (LCs) grew by 14.24 per cent to $30.59 billion during the July-April period of FY 14 from $26.78 billion in the corresponding period of the previous fiscal.
"Lower interest rates on deposits than lending ones have also contributed to achieving such profit," a senior official of a leading PCB told the FE.
The weighted average rate on deposit came down to 8.11 per cent in April 2014 from 8.40 per cent in January, while the average interest rate on lending fell to 13.25 per cent from 13.39 per cent, according to the Bangladesh Bank (BB) statistics.
"Interest income from the government securities has also pushed up the operating profit during the period under review," the private banker explained.
He also said the PCBs earned such profits despite a significant rise in default loans in the first quarter of this calendar year.
The volume of default loans increased by 18.70 per cent to Tk 481.72 billion in the January-March period of 2014, from Tk 405.83 billion in the previous quarter of the last calendar year, the BB data showed.
Among the PCBs, the operating profit of Islami Bank Bangladesh came down to Tk 8.30 billion in H1 of 2014, from Tk 9.75 billion in the same period of 2013.
Pubali Bank earned Tk 3.40 billion in operating profits in the first six months of this calendar year, compared to Tk 3.30 billion in the corresponding period of last year.
Bank Asia posted an operating profit of Tk 2.76 billion against Tk 2.59 billion, while Social Islami Bank's profit rose to Tk 1.90 billion from Tk 1.48 billion.
Al-Arafah Islami Bank and Mercantile Bank earned Tk 2.80 billion and Tk 2.30 billion as operating profit against Tk 1.95 billion and Tk 1.81 billion respectively.
IFIC Bank earned Tk 2.0 billion as operating profit against Tk 1.65 billion, while operating profit of Dutch-Bangla Bank rose to Tk 2.55 billion from Tk 2.40 billion.
NCC Bank netted operating profits worth Tk 1.75 billion in H1 of 2014 against Tk 1.57 billion in the same period of last year.
Standard Bank made operating profit worth Tk 1.90 billion during the period under review against Tk 1.55 billion in the same period of last year. Premier Bank earned Tk 1.50 billion in profit compared to Tk 670 million.
The operating profit of First Security Bank rose to Tk 940 million during the period from Tk 700 million of corresponding time of 2013.