Bangladesh’s Top 17 Banks Keep Bad Loans Below 10%

The level of non-performing loans (NPLs) in Bangladesh’s banking sector had exceeded 12 per cent during the tenure of the previous Awami League government. In June last year, NPLs were reported at BDT 2,11,391 crore, accounting for 12.56 per cent of total loans. Even this figure, however, was questioned for its accuracy.

Following the government transition in August, bad loans surged sharply. Loans that had been artificially concealed through various measures during the previous administration began to emerge in their true form. By the end of September, the Bangladesh Bank reported that NPLs had soared past BDT 6.5 lakh crore, equivalent to nearly 36 per cent of all loans distributed in the banking sector.

Yet amid this challenging scenario, around one-third of banks have managed to keep their NPLs under control. Out of 52 domestic banks, 30 have NPLs below 20 per cent. Six banks have NPLs between 21 and 49 per cent, while 16 banks have between 50 and 99 per cent of their loans classified as non-performing. The data, drawn from September-end statistics from Bangladesh Bank, shows that 17 banks remain in a strong position, with NPLs under 10 per cent. Among these, six banks have bad loans below 5 per cent.

According to industry executives, disciplined loan management, professional governance, and proactive customer support have been crucial. Tarek Refat Ullah Khan, Managing Director of BRAC Bank, said: “Our loan management department is highly capable. Even when customers face difficulties, we provide support. These initiatives help maintain our low NPL levels.”

The banks with the lowest NPL ratios include Citizens Bank, Eastern Bank, Bengal Commercial Bank, BRAC Bank, Prime Bank, City Bank, Midland Bank, Pubali Bank, Meghna Bank, Mutual Trust Bank, Community Bank, Shahjalal Islami Bank, NCC Bank, Dhaka Bank, Uttara Bank, Trust Bank, and Jamuna Bank. Citizens Bank leads the list with an NPL ratio of just 1.74 per cent, followed by Eastern Bank at 3.09 per cent, Bengal Commercial at 3.24 per cent, BRAC Bank at 3.58 per cent, Prime Bank at 4.01 per cent, and City Bank at 4.76 per cent.

City Bank Managing Director Masrur Arefin emphasised the bank’s decentralised lending system, stating that 30 per cent of loans are corporate, while the remainder is divided among consumer, CMSME, and credit card loans. “Our risk management and loan approval processes are fully independent. This has kept our NPL ratio below 5 per cent,” he noted.

Prime Bank’s Deputy Managing Director Ziaur Rahman added: “Over the last four to five years, our NPL ratio has consistently stayed between 3.5 and 4 per cent. Even after a temporary spike last year due to economic challenges, it has now decreased to 3.8 per cent. We aim to reduce it below 3 per cent by year-end through structured recovery, monitoring, and write-off processes.”

At the other end of the spectrum, some banks are facing severe difficulties. Union Bank leads with a staggering 96.64 per cent of loans classified as non-performing, followed by First Security Islami Bank at 96.20 per cent, Global Islami Bank at 95.70 per cent, Padma Bank at 94.17 per cent, and ICB Islami Bank at 91.38 per cent.

Bangladesh Bank spokesperson Arif Hossain Khan commented: “Banks have been instructed to report the true status of their loans, which has caused NPL figures to increase. Nevertheless, many banks are still in a strong position, and we expect gradual improvement in the coming months.”