Sonali Bank Recovers 300 Crore BDT from Hallmark

Sonali Bank PLC, the nation’s premier state-owned commercial lender, has reached a watershed moment in its debt recovery efforts. During a high-level press briefing held at the bank’s headquarters on Tuesday, Managing Director Shaukat Ali Khan announced the successful recovery of 300 crore BDT in cash from the notorious Hallmark Group over the course of 2024.

A Year of Record Profits and Recoveries

The recovery from Hallmark is a cornerstone of a wider, highly successful campaign that saw the bank claw back a total of 1,203 crore BDT from various defaulters. This aggressive approach to non-performing loans (NPLs) has fundamentally altered the bank's financial trajectory, leading to a historic operating profit of 8,017.35 crore BDT for the outgoing year.

Following the necessary deductions for security provisions and taxes, the bank anticipates a final net profit of approximately 1,500 crore BDT. Management confirmed that the pursuit of Hallmark’s remaining debt continues, with the bank currently in the process of liquidating the group’s industrial machinery and real estate assets through public auctions.

Eradicating the Capital Shortfall

A primary highlight of the briefing was the announcement that Sonali Bank has finally closed its long-standing capital deficit. Historically, state-owned banks in Bangladesh have been marred by capital inadequacies, often requiring government bailouts.

"For a long time, the capital shortfall was a major blemish for state-owned banks. As of this year, Sonali Bank is entirely free from this deficit. Shedding this stigma is a monumental achievement for our institution." — Shaukat Ali Khan, MD, Sonali Bank

Financial Performance and Future BDT Targets

The bank has outlined a clear roadmap to reduce its classified loan ratio and strengthen its balance sheet over the coming years.

Mitigating Risk and Pending Receivables

Despite the celebratory tone, the Managing Director addressed the issue of "credit concentration." Currently, 37% of the bank's total lending is concentrated within just five branches. Under a memorandum of understanding with Bangladesh Bank, Sonali Bank is now decentralising these large loan portfolios to reduce systemic risk.

Furthermore, the bank’s capital base is set for another significant boost. Sonali Bank is currently owed 5,500 crore BDT in outstanding commission fees for managing the Letter of Credit (LC) operations for the Rooppur Nuclear Power Plant. Once these sovereign dues are settled, the bank’s financial position will be the strongest in its history.

The MD concluded by reassuring the public that since the original Hallmark scandal, the bank has implemented rigorous internal controls, ensuring that depositor confidence remains steadfast.