Bangladesh’s banking sector posted a record net loss of Tk136,666 crore in 2025, marking the first time the entire sector has fallen into losses, according to the Bangladesh Bank’s Financial Stability Report 2025.

The sector had reported a net profit of Tk12,158 crore in 2024, while previous years also recorded overall profits.

According to the report, the banking sector’s net interest income turned negative at Tk12,537 crore in 2025, compared with positive net interest income of Tk29,391 crore a year earlier. The negative figure indicates that banks paid more interest to depositors than they earned from loans.

Non-interest income, however, rose to Tk83,171 crore in 2025 from Tk63,861 crore in 2024. Operating expenses, including salaries and allowances, increased to Tk51,063 crore from Tk48,993 crore. Overall, the sector incurred a pre-tax loss of Tk124,284 crore.

Although the central bank’s report did not disclose bank-wise profit and loss figures, government data published alongside the national budget showed that the 10 worst-performing banks collectively incurred net losses of Tk154,745 crore.

Among them, First Security Islami Bank posted the largest net loss of Tk66,386 crore, followed by Social Islami Bank with Tk31,000 crore, EXIM Bank with Tk28,909 crore, Global Islami Bank with Tk13,144 crore, and Union Bank with Tk4,685 crore. Other loss-making banks included AB Bank, IFIC Bank, National Bank, Premier Bank and Padma Bank.

Despite the sector’s overall distress, several banks posted strong profits. BRAC Bank topped the list with a net profit of Tk1,581 crore, followed by City Bank with Tk1,306 crore, Pubali Bank with Tk1,079 crore, Eastern Bank with Tk910 crore, and Prime Bank with Tk890 crore.

Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the central bank had taken various measures to improve the sector’s condition, including a Tk60,000 crore stimulus package aimed at reviving closed factories and supporting economic activity.

The report also highlighted a sharp deterioration in asset quality. The banking sector’s classified loans stood at Tk557,217 crore, or 30.6 percent of total loans, at the end of December 2025, while distressed loans surged to Tk1.09 million crore, equivalent to 59.73 percent of total loans, up from Tk756,553 crore a year earlier.

The surge in bad loans pushed the sector’s overall capital adequacy ratio into negative territory for the first time. While banks are required to maintain capital equivalent to 12.5 percent of risk-weighted assets, the sector’s capital ratio fell to negative 2.64 percent at the end of 2025, compared with a positive 3.08 percent a year earlier.

To strengthen the financial position of banks, Bangladesh Bank has tightened dividend regulations. Under the latest rules, banks with non-performing loans of 10 percent or more, or those facing capital or provisioning shortfalls, are barred from paying dividends. As a result, only 16 of the 36 listed banks were able to declare dividends for 2025.

The central bank has also introduced a new condition for 2026, under which banks with paid-up capital below Tk2,000 crore will not be allowed to pay cash dividends.