Profits of half of the banks listed with the capital market and almost all of the non-bank financial institutions in the first nine months of the year dropped significantly because of ongoing liquidity crisis in the banking channel and crash of stock market.
According to data released by Dhaka Stock Exchange in last seven days, profits of 15 listed banks out of 30 declined during January-September period compared to the same period last year. Profits of 15 banks increased in nine months of this year.
Bankers said that although most of the banks made hefty profits in January-September last year, the ongoing liquidity shortage in the banking channel and crisis in stock market took a toll on the banks’ profits this year.
Data showed that United Commercial Bank’s profit in January-September came down to Tk 151.11 crore from that of Tk 158.93 crore during the same period last year while AB Bank’s profit slid to Tk 137.78 crore from Tk 333.88 crore, Bank Asia’s Tk 140.60 crore from Tk 172.03 crore and Eastern Bank’s Tk 162.21 crore from Tk 186.01 crore.
Profits of Exim Bank came down to Tk 69.89 crore from Tk 155.04 crore, IFIC Bank Tk 86.07 crore from Tk 142.02 crore, Mutual Trust Bank Tk 35.87 crore from Tk 71.77 crore, NCC Bank Tk 85.37 crore from Tk 138.65 crore, ONE Bank Tk 118.20 crore from Tk 141.79 crore, Premier Bank Tk 32.75 crore from Tk 64.26 crore, Pubali Bank Tk 171.35 crore from Tk 248.33 crore, Shahjalal Islami Bank Tk 85.80 crore from Tk 164.67 crore, Trust Bank Tk 84.33 crore from Tk 102.81 crore and Standard Bank Tk 54.25 crore from Tk 98.78 crore.
‘Most of the banks faced liquidity shortage starting from the beginning of the year. Although banks increased the rate of interest on loans, they had to increase the deposit rates to collect fund,’ said a top official of a private commercial bank.
‘Liquidity crisis forced the banks to squeeze loans while the government’s borrowing from the banking channel also hampered commercial banks’ profitability. Overall, the business and investment scenario in private sector has been dull in last few months,’ he said.
Besides, the ongoing crisis in capital market also affected the profitability of banks.
‘Most of the banks withdrew much of their investment from the capital market this year after making hefty profits last year. Banks did not invest much this year because of depression in the capital market,’ he said.
The benchmark general index of Dhaka Stock Exchange has been hovering around 5,050-5,400 points for the last few days, after a series of plunges brought down the index to current level from 8,900 in December, 2010.
The banker said cost of business of banks had also increased because of increased number of branches and manpower.
Bankers, however, said some of the banks that had less exposure in the capital market last year continued to perform well in core banking business this year.
The profit of First Security Bank increased to Tk 37.94 crore in January-September from Tk 33.24 crore during the same period last year. Profits of Southeast Bank increased to Tk 141.07 crore from Tk 113.25 crore, Alarafa Bank to Tk 152.19 crore from Tk 105.40 crore, Dutch-Bangla Bank Tk 153.61 crore from Tk 141.00 crore, Dhaka Bank Tk 151.44 crore from Tk 99.45 crore, Islami Bank Tk 464.97 crore from Tk 352.80 crore, Jamuna Bank Tk 110.11 crore from Tk 59.98 crore, Mercantile Bank Tk 156.35 crore from Tk 92.81 crore, National Bank Ltd Tk 449.62 crore from Tk 332.36 crore, Prime Bank Tk 250.89 crore from Tk 232.64 crore, Social Islami Bank Tk 71.48 crore from Tk 33.41 crore, Uttara Bank Tk. 114.36 crore from Tk. 109.26 crore, Rupali Bank Tk 75.05 crore from Tk 52.21 crore and City Bank Tk 1,36.80 crore from Tk 134.58 crore.
DSE data showed that profits of 16, out of 18 NBFIs that announced their financial statements, plunged in January-September compared to the same period last year.
Profits of International Leasing and Financial Services Ltd came down to Tk 12.96 crore from Tk 33.92 crore, Prime Finance Tk 70.25 crore from Tk 136.74 crore, Peoples Leasing and Financial Services Ltd Tk 49.53 crore from Tk 87.44 crore, Lankabangla Finance Tk 79.52 crore from Tk 125.55 crore, Premier Leasing Tk 6.99 crore from Tk 7.26 crore and Bangladesh Industrial Financial Company Tk 0.57 crore from Tk 8.43 crore.
Profits of BD Finance slid to Tk 1.58 crore from Tk 17.66 crore, Bay Leasing Tk 18.47 crore from Tk 48.31 crore, Finance and Investment Ltd Tk 6.13 crore from Tk 1.61 crore, First Lease Finance and Investment Ltd Tk 9.56 crore from Tk 11.83 crore, IDLC Tk 33.60 crore from Tk 101.21 crore, Islamic Finance Tk 3.68 crore from Tk 7.11 crore, Union Capital Tk 18.42 crore from Tk 32.66 crore, United Leasing Tk 1.68 crore from Tk 32.20 crore, National Housing and Finance Tk 10.79 crore from Tk 11.18 crore, and IPDC to Tk 0.61 crore from Tk 1.93 crore.
Only Phoneix Finance’s profit increased to Tk 22.87 crore from Tk 21.87 crore and Uttara Finance’s profit jumped to Tk 58.56 crore from Tk 50.52 crore.
Asad Khan, acting chairman of Bangladesh Leasing and Finance Companies’ Association, said, ‘The NBFIs are facing a liquidity crisis and could not go for new investment this year... so the earnings decreased significantly.’
He said that the NBFIs used to get a handsome sum from the capital market but the 10-month long depression in the market was a key reason for decreasing profits.
‘Moreover, the burden of debt servicing from the term loans also pushed the sector in a tight spot,’ he said.
Asad, also the managing director of Prime Finance, said that the overall liquidity crisis in the money market has restricted the NBFI’s from getting support from the banks.
No comments:
Post a Comment