Most of the private banks registered higher operating profits in the first half of the year in spite of a number of challenges, including liquidity crisis and interest rate hike. 18 banks’ operating profits; 14 posted growth in operating profits ranging from 5 percent to 36 percent. Private sector credit growth maintained a satisfactory trend in recent months, which allowed banks to log in a handsome amount of operating profit, he said. Another reason for the rise in operating profits is the acceleration of implementation of mega infrastructural projects. From July 1, banks have started to lower the interest rates to single digits on loans and deposits in line with the decision of the Bangladesh Association of Banks, a forum of bank directors. Banks will have to bring down the interest rates for lending and deposit to 9 percent and 6 percent respectively, meaning that the interest spread will come down to 3 percent from the 5 percent limit set by the central bank. The rising operating profit is not the true picture of the banking sector, said managing director of Dhaka Bank. The actual profit figures would change significantly after accounting for provisioning and tax, said Rahman, also the chairman of the Association of Bankers, Bangladesh.
FY’18 witnesses increased issuance of stock dividend
Some 148 companies listed with the Dhaka Stock Exchange (DSE) have increased their paid-up capital through issuing stock dividend worth over Tk 42.77 billion in the outgoing fiscal year (FY) 2017-18. The amount would be 125 per cent higher than the previous FY. The companies issued 4.27 billion bonus shares during the period, according to DSE information. Many of the companies also issued cash dividend in the FY. A total of 117 companies had issued more than 1.88 billion bonus shares to increase their paid-up capital by Tk 18.98 billion in FY 2016-17. During the FY 2017-18, the textile sector topped the chart of the sectors which issued bonus shares. A total of 26 companies from the textile sector issued bonus shares in FY 2017-18. The textile sector has the highest number of companies listed with both the stock exchanges. Presently, a total of 50 textile companies are listed with the two bourses in the country and some other textile companies are set to be listed on completion of the IPO (initial public offering) subscription process. A total of 23 of engineering sector companies issued bonus shares in FY 2017-18. The sector comprises of 36 companies listed with the stock exchanges. Some 23 companies of the insurance sector also issued bonus shares in the outgoing FY. Of other sectors which issued bonus shares in the FY 2017-18, 21 companies were from banking, 12 from financial institutions, 12 from pharmaceuticals and chemical sector, six from food & allied sector, six from fuel & power sector and six from miscellaneous sector.
FY18 revenue falls Tk 20,000cr short of downsized NBR target
Revenue earnings by the National Board of Revenue in the just concluded financial year (2017-2018) fell Tk 20,000 crore short of the downsized target due mainly to slower economic activities against higher collection target. Taxmen managed to collect Tk 2.05 lakh crore in FY18 against the revised target of Tk 2.25 lakh crore, according to the provisional data of NBR. Revenue shortfall stands at Tk 43,190 crore if the original target of Tk 2,48,190 crore is considered. Tax collection grew by around 20 per cent in the year compared with that of 10.38 per cent in the previous FY 2016-2017. In FY17, NBR’s total collection stood at Tk 1.72 lakh crore although it had initially claimed that the collection was Tk 1.85 lakh crore with 18.96 per cent growth. Average revenue collection growth in last five years is 14.28 per cent. According to the provisional data, collection of both income tax and value-added tax grew around 22 per cent while customs duty rose only by 13 per cent in the year compared with that of the previous year. VAT wing collected the highest amount of revenue worth Tk 77,800 crore followed by income tax wing Tk 66,200 crore and customs wing Tk 61,500 crore, the data showed. Revenue collection by the VAT, income tax and customs wings was Tk 63,562 crore, Tk 53,812 crore and Tk 54,282 crore respectively in FY17.
The government is taking hard term loan worth $270 million from HSBC for buying to more aircrafts from Boeing. The interest rate of the loan would be 7.2 per cent while repayment period is 12 years, said finance minister at a briefing on Sunday. Earlier, he endorsed a proposal from the loss making Bangladesh Biman to take the loan from the HSBC while presiding over a meeting of the hard term loan committee. Biman has been looking for the loan since January this year with the plan of adding two Boeing 787 Dreamliner aircraft to its fleet by November. Biman has plans to add two more same types of aircraft by September 2019 as part of its deal with Boeing signed in 2008 to procure a total of 10 aircraft. According to the proposal to the hard term loan committee, Biman would spend the money to pre-delivery payment for the 787 Dreamliner.
Emphasis on proper policies to avoid middle-income trap
ICCB emphasized on timely action to avoid falling into the ‘middle-income trap” where a number of countries are stuck in the lower-middle income status and are unable to move up. “The country is now at an important juncture,” said International Chamber of Commerce, Bangladesh (ICCB) president while presenting the Executive Board report on Saturday. The ICCB President said Bangladesh should now be prepared for the probable impact of graduation. Economists predict that the country is likely to lose about $2.7 billion in export earnings every year once it graduates from the LDC bracket, the Council Report added. The Council adopted the Executive Board Report and Audited Financial Statements of ICC Bangladesh for the year 2017 and announced the New Executive Board of ICC Bangladesh for the period of April 2018 to March 2020.
Trade facilities for Bangladesh to remain intact after Brexit: UK minister
British minister of state for Asia and the Pacific Mark Field on Sunday said his country would continue offering the trade facilities Bangladesh is enjoying now in the United Kingdom even after Brexit. Mark visited a number of readymade garment factories in Bangladesh and expressed his satisfaction over the environment-friendly initiatives taken by bussinesses saying that Bangladesh’s RMG sector was moving up. The UK Minister said that bilateral trade and investment issues were discussed and hopefully Bangladesh would enjoy duty-free market access in the UK even after Brexit.
Source tax on export proceeds to be lowered again to 0.70pc: Tofail
Commerce minister on Sunday said that income tax at source on export proceeds would possibly return to its previous rate (0.70 per cent) for the current fiscal year of 2018-2019. At a dialogue on the sustainable development goals, he said that he raised objection during the budget formulation process against the increase of the tax to 1 per cent for the current fiscal year from the previous FY’s 0.70 per cent. The National Board of Revenue also increased the source tax to 1 per cent in the budget. Possibly, it will again come back to 0.70 per cent. The Minister said that export earnings from goods reached $37 billion in the just concluded fiscal year of 2017-2018. Of which, earnings from readymade garment items stood at $30 billion, adding that overall export earnings from goods and services reached $41.5 billion in the year.
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