National Bank Limited is facing mounting financial pressure as its non-performing loans (NPLs) have surged to Tk 29,556 crore, while deposits have fallen sharply over the past two years.

According to the latest data, the bank’s deposits declined by Tk 6,282 crore, from Tk 40,076 crore in June 2024 to Tk 33,794 crore in June this year. During the same period, its total outstanding loans increased slightly from Tk 43,210 crore to Tk 43,452 crore.

The deterioration in asset quality has been particularly severe. National Bank’s NPLs stood at just Tk 388 crore in 2009 but rose to Tk 20,929 crore by June 2024. The figure reached Tk 28,276 crore at the end of June this year and climbed further to Tk 29,556 crore in July.

As a result, nearly 69 percent of the bank’s total loans have become classified as non-performing, according to the latest figures.

The decline in deposits and continuing liquidity pressure have also left the bank struggling to maintain the regulatory cash reserve ratio (CRR) and statutory liquidity ratio (SLR).

As of July, National Bank had an SLR shortfall of Tk 4,223 crore and a CRR deficit of Tk 1,378 crore. The bank has so far incurred Tk 1,965 crore in penalties over the two shortfalls.

National Bank’s acting Managing Director Imran Ahmed said the bank experienced a sharp withdrawal of deposits following political changes and a loss of confidence among customers. Although the pressure has eased, the bank is still unable to meet all customer withdrawal demands as expected.

A large portion of the bank’s lending is concentrated among its top 20 borrower groups. Their combined outstanding loans stood at Tk 21,776 crore at the end of December last year, representing nearly half of the bank’s total lending.

Among the major borrowers, Maisha Group owed Tk 2,755 crore, while various companies of Bashundhara Group had outstanding loans of Tk 4,178 crore. Beximco LPG and Beximco Group owed Tk 2,147 crore, followed by Nasa Group with Tk 1,957 crore and FMC Group with Tk 1,626 crore.

Other major borrowers include Saif Port Holdings and Saif Powertec with Tk 1,574 crore, Saad Musa Group with Tk 1,177 crore, Western Marine Shipyard with Tk 1,095 crore and Bloom Success International with Tk 903 crore.

Imran Ahmed said a significant portion of the bank’s loans had allegedly been transferred abroad. He said some assets had been identified and an international audit firm had been appointed to assist in recovering them.

Meanwhile, the bank’s provisioning and capital deficits have continued to widen alongside the rise in bad loans.

National Bank’s provision shortfall increased from Tk 14,703 crore in June 2024 to Tk 23,323 crore by July this year. Its actual capital shortfall also rose from Tk 20,749 crore to Tk 33,495 crore over the same period.

Bank officials said the deficits remain high because recoveries from old loans have been inadequate and fresh capital has not been injected into the bank. They said recovering funds from major defaulters and securing new capital are necessary to address the financial strain.

The bank, which remained profitable until 2021, has reported consecutive losses since then. Its losses stood at Tk 3,285 crore in 2022, Tk 1,497 crore in 2023, Tk 1,706 crore in 2024 and Tk 2,430 crore in 2025. In the first six months of this year alone, the loss reached Tk 2,287 crore.

National Bank’s 2024 annual report attributed the rise in interest expenses partly to the increase in non-performing loans, which reduced interest income, and the bank’s reliance on various funding sources to meet liquidity requirements.

The bank also waived around Tk 2,200 crore in interest for seven customers in 2021. The loans had accumulated interest over nearly a decade, and the Bangladesh Bank had provided approval subject to certain conditions.

The bank came under the control of the Sikder family after Zainul Haque Sikder became its chairman in 2009. Former and current bank officials have alleged that lending decisions and management were influenced to benefit certain powerful borrowers during that period.

Following the change in government on August 5, 2024, Bangladesh Bank formed a new board for National Bank. Abdul Awal Mintoo, a former sponsor of the bank, initially became chairman. He later stepped down after being elected to parliament. Professor Melita Mehjabin took over as chairman in March 2026.

The new board has begun efforts to revive the bank, but its financial indicators have yet to show a significant turnaround.

Chairman Professor Melita Mehjabin said on August 12 that the new board had inherited a bank in a highly fragile condition. She said the management was working to improve transparency, accountability and corporate governance while rebuilding customer confidence.