Bad loans jump 9pc

Default loans rose 8.97 percent in the first quarter of the year to Tk 54,657 crore owing to political unrest during the period, bank officials said.

Subsequently, the percentage of default loans climbed up to double digits to stand at 10.47 percent on March 30, which was 9.69 percent on December 3, 2014.

Bangladesh Bank Deputy Governor SK Sur Chowdhury said the rise was not significant. Trends in the past years show that bad loans usually increase slightly in the first quarter of a year, he added.

Normally, before the December closing, banks launch a drive to realise default loans, after which it loses steam, said Chowdhury.

However, many could not pay their instalments in time as their businesses suffered for a political stalemate, he added.

Bangladesh Bank Executive Director Mahfuzur Rahman said, in addition to political unrest, loan classifications are now done every three months instead of six. “This may also cause default loans to rise.”

Anis A Khan, managing director of Mutual Trust Bank, said people were unable to run their business due to the blockade and strikes in the first three months of the year, which might have pushed bad loans up.

Helal Ahmed Chowdhury, former managing director of Pubali Bank, said he hopes default loans will drop by June as the political environment has calmed down now. 

The default loans of state-owned commercial banks stood at Tk 22,654 crore or 22.49 percent of the total outstanding loans in the first quarter of 2015. 

At the end of December last year, the amount was Tk 22,763 crore.

The default loans of private commercial banks were Tk 22,747 crore at the end of March, up from Tk 18,426 crore at the end of December.

The foreign banks' bad loans during the period amounted to Tk 1,839 crore, up 7.80 percent from the previous quarter. 

For specialised banks, it was Tk 7,417 crore, which was an increase of 2.18 percent from the previous quarter.