B Mirror Report: Several listed banks in Bangladesh are showing profits despite facing significant provision shortfalls, highlighting deep vulnerabilities in the sector, according to market data and analysts.
NRB Bank reported a profit of Tk 13.81 crore, while NRBC Bank earned Tk 13.25 crore. However, both banks are grappling with provision deficits of around Tk 180 crore and Tk 1,006 crore respectively. Premier Bank, on the other hand, posted a loss of around Tk 993 crore and is burdened with a provision shortfall of about Tk 6,089 crore.
State-owned Rupali Bank recorded a modest profit of Tk 23.25 crore but faces a massive provision deficit of Tk 14,014 crore. Islami Bank Bangladesh Limited reported a profit of Tk 136 crore, yet holds the highest provision shortfall in the sector at Tk 84,615 crore.
Analysts say these figures expose underlying weaknesses in the banking sector, particularly in corporate governance, asset quality, and risk management.
Amid these concerns, several banks are being downgraded to the ‘Z’ category in the stock market, which is considered high-risk. Shares in this category are subject to stricter trading conditions, including T+3 settlement instead of T+2, cash-only transactions, and a ban on margin loans factors that reduce market liquidity.
Currently, 36 banks are listed on the country’s stock exchanges. With 10 more banks set to be added to the ‘junk’ category, the total number will rise to 15 around 42 percent of all listed banks.
Meanwhile, trading of five banks Social Islami Bank, EXIM Bank, Global Islami Bank, First Security Islami Bank, and Union Bank remains suspended due to ongoing merger processes.
Market experts attribute the crisis largely to rising non-performing loans and past lending practices that lacked proper due diligence. They note that tighter regulatory scrutiny since 2024 has begun to reveal the true extent of financial weaknesses in the sector.
A senior market analyst said that while stricter regulation is necessary to restore discipline, ordinary investors are bearing the brunt, as declining dividends are shrinking their income opportunities.
