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Default loan growth slows in Q3

  • Published at 01:13 am November 18th, 2016
Default loan growth slows in Q3
Default loan growth rose by 3.7% or over Tk2,300 crore in the third quarter of this year compared to 6.6% growth in the second quarter, according to the central bank data. The total default loans in the banking sector stood at over Tk65,700 crore as of September which was 10.34% of the total sector’s outstanding of Tk6,35,986 crore, according to the Bangladesh Bank data. The default loan amount was over Tk63,300 crore or 10.06% in April-June quarter. “The fall in default loan amount of the state-owned commercial banks contributed in slower growth of default loan,” said a senior executive of Bangladesh Bank. Moreover, business is now recovering their losses that was incurred during political turmoil from the year 2013 to 2015 as a result default loan growth has slowed down, he added. The default loans of six state-owned commercial banks decreased slightly to Tk29,900 crore in September compared to Tk30,000 crore in June this year. The default loans of the state banks in the downtrend due to strict monitoring to ensure quality loan disbursement by Bangladesh Bank, said a senior executive of Sonali Bank. Of the state banks, Sonali and Janata sees fall in default loan rate in the third quarter compared to the previous quarter. The default loan rate of Sonali Bank came down to 27% against its total outstanding as of September compared to 30.22% in June. Janata bank sees sharp fall in default loans at 14.40% of total outstanding in September compared to 17.29% in June, according to the central bank data. The scam-hit BASIC bank, which was accounted for higher defaulted loan rate in the banking sector since the year 2013, experienced unchanged in default loan rate at 52.94% in September. Agrani, Rupali and BDBL Bank sees increased in default loans registering 25.62%, 18.71% and 58.27% respectively in September compared to 22.47%, 15.31% and 50.46% in June. The default loan of private commercial banks rose to 5.90% or Tk27,600 crore in September compared to 5.44% or Tk25,315 crore in June this year. The default loans of the foreign banks also shot up to 8.85% in September from 8.33% in June. “AS Downturn in lending rate helped businessmen to reduce business cost, businesses are coming out from default culture,” said a senior executive of a private bank. The weighted average lending rate continued to fall coming close to single digit and currently 24 banks are lending at single digit as of September, according to the central bank data. The average lending rate in the market came down to 10.15% in September which was 11.48% in the same period a year back. The country’s banking sector has regularised a total of Tk1,13,775 crore from July 2013 to December 2015 during political turmoil following the national poll held on January 5, 2013. Of the total amount, banks have rescheduled Tk82,392 crore and restructured Tk31,383 crore. Of the rescheduled amount, a loan of Tk30,000 crore were regularised taking the advantage of relaxed policy while Tk52,244 crore in compliance with the rescheduling policy.
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