Most listed banks posted higher profits in the nine months through September this year, compared to the same period last year, buoyed by handsome returns from government securities.
Market analysts attributed the strong performance to the banks’ relatively low volumes of non-performing loans (NPLs), high returns from Treasury investments and ability to mobilise deposits through good governance and public trust.
By contrast, several lenders reported substantial losses during the period as poor asset quality, weak investment income and mounting bad loans forced them to set aside large sums in provision against potential loan losses.
Of the 31 listed banks, excluding five merged banks, 17 reported year-on-year profit growth in the January-September period, while seven saw their profits decline. Two managed to narrow their losses, four sustained higher losses, and one slipped into the red during the period.
According to financial statements, BRAC Bank, Pubali Bank, City Bank, Prime Bank, Eastern Bank, Dutch-Bangla Bank and Jamuna Bank were among the major profit earners during the period.
Akramul Alam, head of research at Royal Capital, said banks with surplus liquidity had prudently invested their excess funds in Treasury bills and bonds, generating handsome returns.
“As private-sector credit demand remained weak amid persistent economic uncertainties, highly liquid banks preferred to invest excess funds in risk-free government securities,” he said.
Investment opportunities have shrunk amid the economic slowdown following the political changeover in August 2024.
Private-sector credit growth stood at 4.75 per cent in August this year, reflecting waning business confidence and tighter lending conditions.
Mr Alam said well-performing banks had also been able to keep operating costs down and mobilise deposits at relatively lower costs because of their strong market reputation.
Strong performers
BRAC Bank’s profit climbed 38 per cent year-on-year to Tk 21.21 billion, the highest in January-September among listed banks, supported by substantial income from government securities and higher interest income.
The bank delivered strong results across profitability, operating efficiency and balance-sheet expansion, underpinned by diversified businesses, sound governance and a customer-focused strategy.
Notably, its nine-month profit surpassed its full-year earnings in 2025, as consolidated interest income surged 26 per cent year-on-year during the period.
BRAC Bank’s non-performing loan ratio stood at 2.27 per cent at the end of September, reflecting relatively strong asset quality.
Consolidated return on equity (RoE) and return on assets (RoA) stood at 20.28 per cent and 1.65 per cent, respectively.
Customer deposits exceeded the Tk 1.03 trillion mark, while loans and advances reached Tk 779.47 billion at the end of September.
“Continued customer confidence has enabled us to deliver growth well above the market while maintaining one of the industry’s strongest asset quality indicators,” said Tareq Refat Ullah Khan, managing director of BRAC Bank, in a statement.
Pubali Bank reported a 74 per cent year-on-year growth in profit to Tk 15.84 billion in the nine months through September, driven by higher investment income, commission, exchange and brokerage earnings.
“This significant improvement demonstrates the bank’s focus on high-yield lending, diversification of fee, commission and investment income, cost optimisation and digital transformation,” the bank said in its earnings note.
Its customer deposits also crossed the Tk 1 trillion mark for the first time, reaching Tk 1.10 trillion at the end of September.
Mr Alam said financially stronger and trusted banks had also benefited from a migration of deposits away from weaker lenders.
Despite a decline in third-quarter profit, City Bank reported a 20 per cent year-on-year growth in earnings to Tk 8.68 billion in January-September, riding on higher commission and fee income, alongside improved net interest and investment earnings.
Prime Bank’s profit rose 9 per cent to Tk 6.85 billion in the nine months to September, despite a sharp contraction in net interest income.
Its net interest income plunged 64 per cent to Tk 1.36 billion, while investment income jumped 34 per cent to Tk 16.32 billion in the nine months through September.
NRB Bank returned to profitability, posting a profit of Tk 102 million in January-September against a loss of Tk 1.39 billion in the same period last year, mainly due to a substantial reduction in provisioning.
The bank’s total provision fell to Tk 528 million in September from Tk 2.37 billion a year earlier.
Struggling lenders
Islami Bank Bangladesh, IFIC Bank, National Bank, Rupali Bank and Premier Bank reported substantial losses in January-September, indicating the increasing pressure they were facing from poor asset quality and negative net interest income.
Several of these lenders have struggled with deteriorating asset quality, as the extent of financial irregularities and bad loans became more apparent following the political changeover in 2024.
Irregular lending practices left some banks saddled with large volumes of toxic assets, while their weak financial positions constrained their ability to maintain adequate provisions against bad loans.
Islami Bank reported a loss of Tk 32.86 billion in the nine months through September, as its net interest income turned negative by Tk 18.28 billion, compared with a positive Tk 998 million in the same period last year.
The bank, however, said its management had undertaken various measures in line with recent guidance from Bangladesh Bank to strengthen its capital base, improve asset quality, intensify investment recovery and enhance income generation.
“These measures are expected to contribute positively to the bank’s future earnings,” it said in its earnings note.
IFIC Bank also reported a loss of Tk 25 billion during the period, with its net interest income turning negative by Tk 22.88 billion, compared with a negative Tk 16.16 billion in the same period last year.
National Bank also endured a loss of Tk 30 billion in January-September, up from Tk 14.5 billion in the corresponding period last year.
“If a bank has high bad loans, it cannot earn interest from those. Moreover, it has to keep provisions for those bad loans from its profit, hurting the bottom line,” said Akramul Alam of Royal Capital.
https://thefinancialexpress.com.bd/stock/bank-profits-rise-on-treasury-returns-but-weak-lenders-sink-deeper-into-losses