Rejaul Karim Byron

Private banks logged as high as 90 percent growth in their operating profit last year, riding on a boom in stockmarket and an upward trend in external business.

Most banks marked a rise in profit, ranging from 50 percent to 90 percent, and a few posted more than Tk 1,000 crore profit.

On the last day of 2010, Friday, they sat to count the last one year's profit. Primary data of all these 30 private banks shows that their combined profit soared by 57 percent to Tk 13,203 crore last year, against Tk 8,000 crore in 2009.

Islami Bank Bangladesh, this year also, made the highest profit at Tk 1,143 crore. Besides, National Bank and AB Bank logged more than Tk 1,000 crore each.

Managing Director of Shahjalal Islami Bank Abdur Rahman Sarker told The Daily Star that the banks are involved in the stockmarket business in different ways -- they have opened their own brokerage houses and are also doing portfolio investment. As a result, a big amount of income is accruing to them from the share market.

Sarker said the banks' income from external business also went up as the world economy shook much off the recession jitters.

Senior Executive Vice President of Mutual Trust Bank AKM Shamim said the banks' income on account of fees and commission has increased. The strict monitoring by the central bank also pulled down the banks' classified loans, increasing their income.

From January 3 to December 30, the benchmark index of Dhaka Stock Exchange went up by 3,754 points, or 82 percent, to 8,290.

Bangladesh Bank (BB) data shows that the banks' total holdings in the share market were Tk 25,000 crore as of October 31 last year.

Many banks earned a big portion of their profit from the stockmarket, bankers said. A bank involved in Islamic banking made a profit of about Tk 400 crore last year. Of the amount, Tk 100 crore came from its brokerage business.

The external trade of the banks also started going up last year, with the world economy recovering from the recession.

According to BB data, import increased by about 34 percent in July-October of the current fiscal year, against a fall of about 15 percent in the same period last year.

On the other hand, export went up by 36 percent during the July-November period of the current fiscal year, whereas the country witnessed a fall by about 7 percent in such external trade in the same period a year ago.

The banks' non-interest income increased in line with the rise in import and export.

In the first six months of the last fiscal year, the non-interest income shot up by 39 percent.

Source: The Daily Star