Banks invest Tk 1.7tn in three quartersDeposit stands at Tk 2.12tn; Prime Bank leads PCBs

Posted by BankInfo on Mon, Dec 17 2012 07:14 am

Some 20 local Private Commercial Banks (PCBs) have invested an amount of Tk 1.70 trillion till September ofthe current calendar year against the deposits these banks have collected from clients worth Tk 2.12 trillion by the period since inception of respective operations, according to data available from quarterly report of banks.

Of the PCBs, the Prime Bank Ltd (PBL) has become the market leader by holding major stake in deposit mobilisation and disbursement of credit followed by UCBL, National Bank Ltd, South East Bank Ltd and AB Bank Ltd.

The PBL has collected total deposits amounting to Tk 185 billion till the end of November while its investment stood at Tk 157.49 billion by third quarter of 2012, according to the report.

While commenting on performance of the PBL, its managing director Md Ehsan Khasru told daily sun that around 80 percent of his total loans goes to productive persuades which is contributing to the industrial expansion.

“So far, I knew PCBs have invested maximum percentage of respective loans in the industrial sector, which called term loan or current credit, as my bank does,” Khasru said.

The head of the PBL management said the strategy of the management of his bank is keeping deposits safe by not investing in unviable projects.

Khasru said his bank is experiencing a significant rise in deposit mobilisation though the rate of interest has been curtailed to 12 percent from 12.5 percent recently.

“The question is how I have obtained the trust of depositors? —-Simply I have reduced my cost of doing business and providing improved, efficient and some ‘no cost’ services to clients,” he said.

He said his bank now does not charge for maintaining any current and savings accounts in PBL branches. “In the west, the easy way usually applied to reduce cost of doing business is ‘job cut’. But, here I don’t think it as best practice. I have reduced the rate of interests for both the deposit and lending,” he said.

He said the lending rate of his bank is now 15 percent for term loan which is above 16 percent in the market. “My bank is a strong bank now,” Khasru said.

According to the quarterly report, 10 PCBs having strong deposit base are— UCBL (Tk. 164.87 billion), National Bank Ltd (Tk. 148.01 billion), South East Bank Ltd (Tk. 143.94 billion), AB Bank Ltd (Tk. 129.74 billion), BRAC Bank Ltd (Tk. 122.38 billion), DBBL (Tk. 121.81 billion), Mercantile Bank Ltd (Tk. 110.49 billion), Bank Asia (Tk. 104.84 billion) and Dhaka Bank Ltd (Tk. 102.70 billion).

Respective assets of these 10 PCBs are UCBL (Tk. 135.68 billion), National Bank Ltd (Tk. 128.57 billion), South East Bank Ltd (Tk. 119.36 billion), AB Bank Ltd (Tk. 112.82 billion), BRAC Bank Ltd (Tk. 108.93 billion), DBBL (Tk. 89.15 billion), Mercantile Bank Ltd (Tk. 89.16 billion), Bank Asia (Tk. 91.09 billion) and Dhaka Bank Ltd (Tk. 87.90 billion).

However, the quarterly report implies conventional banking of PCBs and it has dropped the Islami Bank Bangladesh Ltd (IBBL) as the latter is providing completely Islamic banking services to clients.

The IBBL has been a single highest stakeholder as private bank in terms of deposit mobilisation, investment and earning profit in the country’s banking sector.

Meanwhile, total domestic credit stood at Tk 5.29 trillion. Out of the amount, credit to private sector stood at Tk. 4.10 trillion by banks (without financial institutions) while that of the public sector rose to Tk. 834.80 billion by banks till September 2012.

According to Bangladesh Bank's (BB) statistics, broad money (m2) circulation at present is slightly above Tk. 5.36 trillion.

News: The Daily Sun/Bangladesh/17th-Dec-12