Seven private banking companies incurred operating loss in the first quarter of the current calendar year due to prolonged standoff in trade and commerce that slowed down investment growth, according to Dhaka Stock Exchange (DSE) sources.
Industry insiders said slow pace of recovery that began after January 5 parliamentary election could not make up the deficit in operational expenditure of the banks,reports the Daily Sun.
Financial statements for January-March 2014 submitted to the DSE shows that the remaining 23 private commercial banks could not make significant income but the amount required for provisioning was higher due to rise in classified loans.
“Increase in operational cost coupled with higher provisioning requirement is eroding banks’ income,” said former Bangladesh Bank governor Dr Salehuddin Ahmed.
Imprudent behavior of bank management is responsible for deterioration of banks’ financial health that impacts the script prices in the capital market and shareholders’ benefits, sources concerned said.
The DSE data shows the Al Arafah Islami Bank incurred highest Tk 23.71 crore losses in the first quarter that resulted in loss in value by Tk. 0.25 per share.
The loss of problem-prone ICB Islamic Bank was Tk. 18.2 crore and its value per script decreased by Tk 0.27.
The loss of Brac bank stands at Tk 8.37 crore in Q1, which results in loss of Tk 0.19 in value per share.
EXIM bank’s loss in Q1 stands at Tk. 8.69 crore and its loss per share was Tk. 0.08.
The loss of Shahjalal Islami bank was Tk. 6.13 crore and fall in value per share was Tk. 0.09.
Besides, two second-generation banks — Prime bank and Standard bank –suffered a sharp fall in income by Tk. 22.86 crore and Tk 17.36 crore respectively in the Q1 compared to end-quarter of the last year.
The income shortfall implies decline in value per share by Tk 0.22 and Tk 0.3 of the two banks respectively.
The DSE statistics on the other private banks shows a slower growth of income.
Banks started recovering from the investment standoff amid the return of normalcy in the political arena and hopes to be back in full pace of investment with positive outlook.