Default loans drop on relaxed policies
Default loans went down in 2020 on the back of a general forbearance on loan payments, a development that does not cheer experts and bankers as the fall did not paint the actual scenario. Non-performing loans (NPLs) stood at Tk 88,734 crore last year, down 5.93 per cent year-on-year, data from the Bangladesh Bank showed. Experts and bankers call the decline in the NPLs meaningless as it occurred due to the central bank’s instruction to lenders not to classify any loans throughout 2020 under the general forbearance or moratorium. Banks rescheduled and wrote off a good amount of default loans last year, helping bring down the toxic assets as well. Banks removed Tk 12,140 crore of default loans from their books by using the tools of rescheduling and write-off in the nine months to September. The central bank is yet to come up with the full data on the rescheduling and write-off loans for the final quarter of 2020. This lowered the amount of default loans artificially. Default loans accounted for 7.66 per cent of the outstanding loans of Tk 11,58,775 crore as of December. The ratio was 9.32 per cent in December 2019. If the previous calculation of default loans was considered, NPLs stood at Tk 88,282 crore, which is 8.06 per cent of the outstanding loans amounting to Tk 10,95,772 crore in the domestic banking units of lenders. For instance, NPLs surged to Tk 116,288 crore in September 2019, prompting the central bank to relax the rescheduling policy as per a government instruction. This had helped reschedule a record Tk 50,186 crore in 2019 and halted the rise in the default loans. Similarly, the moratorium reined in the upward trend of default loans last year. Defaulted loans in the state-run banks, however, decreased 3.57 per cent year-on-year to Tk 46,333 crore last year. Forty-one private commercial banks held defaulted loans of Tk 40,361 crore, down 8.63 per cent from a year ago. The NPLs in nine foreign banks fell to Tk 2,038 crore in contrast to Tk 2,103 crore.
Stocks bounce back but worries remain
Stocks bounced back yesterday following three days of continuous decline but tensions continue to run high among investors due to the downward trend of the turnover. DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 122 points, or 2.27 per cent, to 5,498 yesterday. Two weeks ago, turnover at the DSE ranged from Tk 1,300 crore to Tk 1,500 crore but it has now halved to Tk 700 crore on average, DSE data shows. Beximco topped the turnover list with shares worth Tk 87 crore changing hands followed by Beximco Pharmaceuticals, Robi Axiata, British American Tobacco Bangladesh, and LankaBangla Finance. First Finance shed the most, falling 4.83 per cent followed by Prime Bank, Central Insurance, LR Global Mutual Fund One and Desh Garments. At the DSE, 240 securities gained value, 17 declined, and 92 remained unchanged. The port city bourse also rose yesterday. CASPI, the general index of the Chattogram Stock Exchange, rose 399 points, or 2.57 per cent, to 16,919. Among the 237 traded companies, 160 advanced, 28 fell and 49 remained the same.
Tk 1,568cr project to expand runway
The Civil Aviation Authority of Bangladesh (CAAB) and a Chinese joint venture yesterday signed a deal for the expansion of the runway of Cox’s Bazar airport. After the completion of the project worth Tk 1,568.86 crore, the runway will be the longest in the country, allowing wide-bodied aircraft like Boeing 777-300ER and Boeing 747-400 to land. After the expansion by 1,700 feet, total length of the runway will be 11,700 feet, CAAB said in a press release. The government last year took an initiative to upgrade the runway of Cox’s Bazar airport to international standards and offer foreign holidaymakers hassle-free trips to the town with the world’s longest unbroken sea beach.