Distressed assets in Bangladesh’s banking sector surged to Tk 4.87 lakh crore by the end of 2023, up from Tk 3.78 lakh crore in 2022, driven by rising non-performing loans (NPLs) and rescheduled debts, according to Bangladesh Bank’s Financial Stability Assessment Report. Defaulted loans reached Tk 1.45 lakh crore, rescheduled loans totaled Tk 2.88 lakh crore, and Tk 53,612 crore in loans were written off. Rescheduled loans alone hit a record Tk 91,221 crore, largely from the industrial sector. Additionally, 26 banks risk falling below the required Capital to Risk-weighted Assets Ratio (CRAR) if their top three borrowers default. Despite a 10% rise in operating profits, net profit grew just 4.32%, constrained by higher non-interest expenses and provisions for loan losses. The report underscores the need for regulatory reforms and stronger governance to mitigate these systemic risks.
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