Daffodil International University
Faculties and Departments => Business Administration => Business & Entrepreneurship => BBA Discussion Forum => Topic started by: Rozina Akter on July 02, 2013, 04:06:22 PM
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The un-audited operating profit of the country's private commercial banks (PCBs) showed a declining trend in the first six months of the current calendar year (January-June 2013).
At least 11 PCBs, out of 17, witnessed a fall in the operating profits during the period because of decline in their loans and advances in different areas, including trade financing, the bankers said.
They also said some leading PCBs are still working to prepare their first half-yearly (H1) financial statements, which will be finalised soon.
Only a few banks have been able to increase their operating profits compared with the same period of the previous year despite lower credit demand and rising trend of non-performing loans in the recent months, according to the bankers.
"Lower import payments have also contributed to squeezing operating profits of the banks during the period under review," a senior official of a leading PCB told the FE Monday.
The country's overall import payments came down to US$ 26.78 billion during the July-April period of the fiscal year (FY) 2012-13 from $ 29.54 billion in the corresponding period of the previous fiscal, according to the Bangladesh Bank (BB) statistics.
"The ongoing political turmoil is the main cause behind the fall in growth of credit flow to the private sector," the banker said, adding that private sector credit from overseas sources has also contributed to cut credit demand in the recent months.
He also said most PCBs have now become cautious about sanctioning fresh loans, mainly due to the loan scams that recently rocked the banking sector.
"We're now very cautious about sanctioning any fresh loans to avert any untoward financial risks," he added. Taking to the FE, another PCB official said the government revenue collection would decrease, if the declining trend in the banks' operating profits continues in the second half of this calendar year.
The operating profits of only six PCBs have increased in the first six months of this calendar year compared with the same period of the previous one, the data showed.
"We've earned more as operating profits through adjustment of our interest rates in line with the market trend," a PCB official said while explaining the main cause of such earnings.
He also said the profit-earning banks have also monitored their credit-deposit ratio (CDR) in line with the BB's directive.
However, the operating profit does not indicate the actual financial position of a bank. Because, the banks have to leave aside funds from their operating profits for provisioning against bad debts and taxes paid to the government.
Source: The Financial Express
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thanks for sharing..
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with pleasure :)