Default loans in the four state-owned banks dropped 12.77 percent in 2014 from a year ago on the back of a strong recovery drive.

On December 31 last year, the default loans of Sonali, Janata, Agrani and Rupali collectively stood at Tk 16,599 crore. On an individual level too, the default loans declined in all four banks.

Besides cash recovery drives, wholesale rescheduling and write-offs also helped in bringing down the bad loans in the four banks, said an official of Sonali, the largest state bank.

Sonali, whose bad loans dropped 20.25 percent last year, gave all its branches targets for recovery and business development at the beginning of 2014, which were then monitored during the course of the year, said its Managing Director Pradip Kumar Dutta.

Subsequently, the bank counted profits of Tk 855 crore last year, which is more than a three-fold increase over previous year. In 2013, Sonali's profits stood at Tk 257 crore.

However, Sonali also wrote off around Tk 2,000 crore in 2014, which was another reason for the fall in its default loans.

Agrani Bank also recovered a handsome amount of loans last year: it made cash recovery of Tk 445 crore and around Tk 40 crore from the written-off loans. As a result, its profits increased 8.40 percent last year from the previous year.

An official of Janata Bank said in 2014 they made cash recovery of Tk 734 crore from classified loans and Tk 151 crore from written-off loans. Janata's profits though dropped 13.12 percent year-on-year to Tk 1,053 crore.

Meanwhile, Banking Secretary M Aslam Alam at a press briefing yesterday said besides classified loans, the overall loan situation of the banking sector has improved much.