Of 40 PCBs, 15 marked an upward trend in operating profits while three witnessed a downturn

Operating profits of the country's private commercial banks (PCBs) showed an upturn in the first six months of the current calendar year.

Of 40 PCBs, 15 marked an upward trend in operating profits while three witnessed a downturn, according to provisional data for the January-June 2017 period.

The data of the rest were not immediately available.

In the final count, the amount of profits may be a little higher or lower, said officials of different commercial banks.

Un-audited operating profits, however, don't indicate the actual financial position of a bank as the banks have to leave aside funds for provisioning bad debts and taxes payable to the government.

The rising trend in credit practically in the private sector has helped the commercial banks pick up their operating profits in the first half of the year comparing to the same period last year, according to the bankers.

Meanwhile, private sector credit growth increased further in April due to higher trade financing for settling import payment obligations, they added.

It rose to 16.21 per cent in April, which was close to the target set by the Bangladesh Bank (BB), from 16.06 per cent in March, according to the central bank figures. It was 15.88 per cent in February.

The monetary policy for the January-June period of the just-concluded fiscal year had set the private sector credit growth target at 16.50 per cent.

A few number of banks have already been able to earn a significant amount from their treasury operations, they explained.

The bankers also said some banks could not perform as expected during the period under review mainly due to an increase in their volume of non-performing loans (NPLs).

The volume of classified loans in the country's banking system jumped by more than 18 per cent to Tk 734.09 billion during the January-March period of this year from Tk 621.72 billion in the preceding quarter.

Talking to the FE, Mehmood Husain, managing director and chief executive officer of NRB Bank Limited, said there is a twin-effect of classified loans in the banking system.

"The banks will have to keep the interest earned from classified loans to their interest-suspense account, instead of taking it into profit account," the senior banker explained.

Besides, the banks will have to ensure required provisioning against total classified loans from their profits, he added.

The falling trend in interest rate spread has also pushed down the overall operational profits of the banks, another senior executive of a PCB told the FE.

The weighted average spread between lending and deposit rates offered by the commercial banks came down to 4.65 per cent in April 2017 from 4.72 per cent in January last.

The private banker expects that the operating profits may rise in the second half of this year if the banks are able to reduce the amount of NPLs by gearing up their recovery drive across the country.

The operating profits of Pubali Bank Ltd rose to Tk 4.60 billion during the period under review from Tk 2.97 billion in the same period of 2016.

Bank Asia Ltd and Mercantile Bank Ltd earned Tk 3.06 billion and Tk 3.25 billion as operating profits against Tk 2.79 billion and Tk 2.78 billion respectively.

The operating profits of National Bank Ltd fell to more than Tk 3.0 billion in the first six months (H1) of this calendar year from Tk 5.85 billion in the same period of the last year.

Southeast Bank Ltd earned Tk 4.11 billion as operating profits during the period under review against Tk 4.20 billion in the H1 of 2016.

The operating profits of Dutch-Bangla Bank Ltd rose to Tk 3.50 billion in the first six months of this year from Tk 3.24 billion in the same period of the last year.

Al-Arafah Islami Bank Ltd earned Tk 3.60 billion as operating profits against Tk 3.50 billion while operating profits of EXIM Bank Ltd rose to Tk 3.20 billion from Tk 2.55 billion.

NCC Bank Ltd made operating profits worth Tk 2.37 billion in the H1 of 2017 against Tk 2.01 billion in the same period of the last year.

Meghna Bank Ltd made operating profits worth Tk 670 million in the H1 of 2017 against Tk 580 million in the same period of the last year while South Bangla Agriculture Bank Ltd earned Tk 650 million against Tk 700 million.

The operating profits of Shahjalal Islami Bank Ltd rose to Tk 1.73 billion during period under review against Tk 1.59 billion in the same period of last year.

Premier Bank Ltd made operating profits worth Tk 2.50 billion in the H1 of 2017 against Tk 2.00 billion in the same period of the last year while First Security Islami Bank Ltd earned Tk 2.22 billion against Tk 1.67 billion.

The operating profits of Mutual Trust Bank Ltd rose to Tk 2.09 billion during the period under review from around Tk 2.00 billion in the same period of last year.

Farmers Bank Ltd posted operating profits of Tk 420 million in the H1 of 2017 from Tk 300 million in the same period of last year while NRB Bank Ltd earned Tk 370 million against Tk 369 million.

Operating profits of Social Islami Bank Ltd (SIBL) rose to Tk 2.67 billion during the period under review from Tk 2.25 billion in the same period of last year.