Bad loans increase to BDT 472.6 billion in Q1

Bad loans, the worst category of defaulted loans, in the country’s banking sector increased by 8.68% to BDT 472.6 billion in the first quarter of 2016 because of the scheduled banks’ failure in recovering classified loans amid a rise in financial scams. According to the latest Bangladesh Bank data, the bad loans increased to BDT 472.6 billion as of March 31, 2016 from BDT 434.9 billion as of December 31, 2015. As of March 31, 2016, the bad loans accounted for 79.54% of the total classified loans of BDT 594.1 billion in the banking sector. The non-performing loans in the banking sector increased by BDT 80.4 billion in the first three months of 2016 as the central bank had recently unearthed a number of scams in different banks that fuelled the overall defaulted loans. The BB conducted detailed inspections in the last year at different banks and unearthed significant amount of defaulted loans at the state-owned and private commercial banks, a BB official told New Age on Thursday.

Source: http://newagebd.net/231205/bad-loans-increase-to-BDT-47259cr-in-q1/

HSBC to shut half of its branches in Bangladesh

British banking giant HSBC is set to shutter six of its 13 branches in Bangladesh as part of its global strategy to cut costs. The branches will be closed down in phases by the end of 2016 and the customers will be informed well in advance of the shutdown, said Talukdar Noman Anwar, head of communications at HSBC Bangladesh. The branches listed for shutdown are located in Anchor Tower on Bir Uttam CR Dutta Road, Banani and Lalbagh in Dhaka; Narayanganj; Mymensingh and Sylhet.

Source: http://www.thedailystar.net/business/hsbc-shut-half-its-branches-bangladesh-1226731

Bangladesh Bank governor fires warning shots at state banks

Bangladesh Bank Governor Fazle Kabir yesterday cautioned four state-owned commercial banks and instructed them to grant loans maintaining due diligence so that their financial health improves. The warning comes as default loans in Sonali, Janata, Agrani and Rupali soared in the first quarter of the year. Observers appointed to the state banks will assess whether the loans are being granted in line with the rules. Every year, the state banks are given about 12 performance targets on the basis of agreements signed between them and the central bank. They had a target to retrieve BDT 9.75 billion from top 20 defaulters in 2015, but succeeded in recovering only BDT 1.87 billion. In the same year, the banks recovered only 43.0% of their target — BDT 29.25 billion from other defaulters.

Source:
http://www.thedailystar.net/business/bb-governor-fires-warning-shots-state-banks-1226719
http://print.thefinancialexpress-bd.com/2016/05/20/142019

19 merchant banks fail to manage any IPO in 3 years

Nineteen out of the 38 full-fledged merchant banks which are in operation for more than three years have failed to manage any initial public offering in last three years. The failure is a violation of securities rules, said officials of the Bangladesh Securities and Exchange Commission. According to a BSEC report, the rest 19 firms complied with the rules as they managed at least one IPO during the period. Full-fledged merchant banks are licensed to manage IPOs and portfolios of their clients and to underwrite securities. There are 55 merchant banks operating in the country’s capital market. Of them, 51 are full-fledged. ‘Managing at least one issue in three years is mandatory for merchant banks, not necessarily that the issue will have to get regulatory approval,’ BSEC executive director Saifur Rahman told New Age.

Source: http://newagebd.net/231202/19-merchant-banks-fail-to-manage-any-ipo-in-3-years/

Private sector credit growth keeps rising on farm, consumer loans

The country’s private sector credit growth continued to maintain an upward trend in March like the previous few months as banks are now disbursing huge amount of consumer and farm loans to sustain their profitability, said Banglades. Bank officials and an economist. According to the latest BB data, the year-on-year credit growth rate in the private sector increased to 15.16% in March compared with that of 15.11% in February of this year. The private sector credit growth in January this year also surpassed the three-year-high of 14.19% achieved in December 2015, rising to 14.82%. The central bank earlier set a 14.80-% growth ceiling for June 2016 in the monetary policy statement for January-June of the current year. Overburdened with excess liquidity, most of the banks are now paying out consumer loans at 11% to 14% interest rate, said a BB official.

Source: http://newagebd.net/230980/pvt-sector-credit-growth-keeps-rising-on-farm-consumer-loans/

Government borrowing from savings tools set to rise by 30% next fiscal

The government is set to increase its borrowing target from savings instruments by 30.0% for the next fiscal year (FY) 2016-17 to finance its budget deficit, officials said. The finance ministry is considering fixing the net borrowing target from the state-owned savings tools at BDT 195.0 billion in the upcoming budget compared to the current FY’s target at BDT 150.0 billion. On the other hand, the government will increase its revised target of net borrowing from savings certificates for the FY 2015-16 as the sales of the same are very high. According to the DNS data, the net borrowing target already has surpassed the entire fiscal year’s target of FY2015-16. The net sales of savings certificates stood at BDT 166.02 billion in seven months of current FY, against the target of BDT 150.0 billion, set earlier by the finance ministry.

Source: http://print.thefinancialexpress-bd.com/2016/05/20/141986

Budget bears appendage on mega development plans

The national budget for next financial year (FY) will contain a separate section showing allocations against existing and new mega projects for three consecutive FYs. A rolling fund of BDT 2.12 trillion earmarked for this purpose will break down into average three tranches of BDT 700.0 billion for each year, officials said. The government had taken a number of mega projects but those suffered delays in execution due to uncertainty about funding. In a bid to overcome such hurdles the government has prepared a separate inset budget with the main upcoming budget documents on this matter, people familiar with the budget preparation told the FE. The mega projects under local government will have BDT 113.24 billion. The roads and highway projects will have a share of BDT 307.42 billion. For primary education, the government has estimated BDT 181.53 billion under the budget-within-budget outlay.

Source:
http://print.thefinancialexpress-bd.com/2016/05/22/142174
http://newagebd.net/231428/pvt-investment-adp-implementation-key-challenges-in-next-fy/

25.0% LPGL share to be offloaded in December

Another state-owned firm Liquefied Petroleum Gas Corporation Limited (LPGL) has finally decided to offload its share in December this year. The decision to offload 25.0% LPGL share was made at an inter-ministerial meeting held last week at the finance division auditorium in the city, according to officials. According to the Bank Division sources, of the 13 companies under the energy division, only three had offloaded their shares earlier in the stock market. It is noted here that the government was able to offload only the shares of Bangladesh Submarine Cable Company Ltd during the last six year.

Source: http://www.dhakatribune.com/business/2016/may/22/25-lpgl-share-be-offloaded-december#sthash.5abAjvVE.dpuf

Mobile users increase after 3-month fall

The number of country’s active mobile phone subscribers increased in April after a three-month fall amid the ongoing biometric re-registration of SIMs. According to the latest data of Bangladesh Telecommunication Regulatory Commission, in April the operators added 10.68 lakh new active SIMs that led to the total subscriber number to 130.2 billion. Three large operators — Grameenphone, Banglalink and Robi — and state-owned Teletalk managed to raise the number of their active SIMs in April while Airtel and Citycell lost some users like the previous three months. In the previous three months, the mobile operators had lost 2.9 million subscribers. BTRC officials and market operators said the ongoing SIM verification with biometric fingerprint was the key reason for the recent decline in the number of subscribers of the telecom operators. In April, market leader Grameenphone added highest number of SIMs — 0.67 million— and reached to 50.7 million.

Source: http://newagebd.net/230973/mobile-users-increase-after-3-month-fall/

Six services for Rooppur nuclear project exempted from VAT

The VAT wing of NBR on May 10 issued an order signed by its Chairman Md Nojibur Rahman to effect the decision. The VAT on the use of port will be exempted while freight forwarding, clearing and forwarding companies and insurance companies will also enjoy Vat exemption. Supplier services will also come under VAT exemption but only on local procurement of products and services by the project nominated contractor and subcontractor. The banking service provider will also be exempt from VAT during making letter of credit through Sonali Bank under the credit financing scheme as mentioned in the agreement between Bangladesh Atomic Energy Commission and Russian Federation to establish the Rooppur Nuclear Power Plant, according to the gazette. Bangladesh and Russia on December 25 last year signed a general contract for the construction and commissioning of the nuclear power plant in Pabna at a cost of USD 12.65 billion. According to the deal, Russia will provide 90.0% of the funds on credit at an interest rate of Libor plus 1.75%.Bangladesh will have to pay the loan in 28 years with a 10-year grace period.

Source:
http://www.dhakatribune.com/business/2016/may/22/six-services-rooppur-nuclear-project-exempted-vat#sthash.82dEEBn6.dpuf
http://newagebd.net/231345/rooppur-nuke-power-plant-gets-vat-waiver-for-6-services/

Japan—next USD 1.0 billion export market for Bangladesh

Japan is on the way to becoming the billion-dollar export market for Bangladesh in the current financial year of 2015-16. Bangladesh’s export earnings from Japan in the July-April period of FY16 grew by 18.30% to USD907.88 million from USD 767.43 million in the same period of FY15, according to the statistics of Export Promotion Bureau. With USD 90.78 million average monthly export, the total export in Japan will easily cross USD1-billion mark in the remaining two months, May and June, in the current fiscal year, said exporters and experts. The East Asian country will be the eighth market for Bangladesh, where its export would touch the USD1-billion mark. The export earnings from Japan in the FY15 totalled USD 915.21 million, which was 6.16% higher than the earnings of USD 862.07 million in the FY14. Experts and exporters said Japan is an emerging market for Bangladesh and the export earnings from the market have been increasing rapidly due to supply of quality and high value-added readymade garment products.

Source: http://newagebd.net/231347/japan-next-1b-export-market/

Trade with Canada crosses USD 2.0 billion

Bilateral trade between Bangladesh and Canada has crossed the USD 2.0 billion mark for the first time, with Bangladesh’s shipment of apparel leading the way. Businessmen and diplomats also expect the volume of trade to cross USD 5.0 billion by 2021. Trade between the two countries stood at USD 2.48 billion in fiscal 2014-15; Bangladesh’s export to Canada was recorded at USD 1.48 billion, while it imported goods worth USD 900.12 million, according to Canada Bangladesh Chamber of Commerce and Industry (CanCham). Higher export to Canada would significantly help Bangladesh achieve its target to export garments worth USD 50.0 billion by 2021 as 95.0% of Bangladesh’s exports to Canada are apparel items, said Masud Rahman, president of CanCham.

Source:
http://www.thedailystar.net/business/trade-canada-crosses-2b-1226728
http://www.dhakatribune.com/business/2016/may/20/bangladesh-canada-bilateral-trade-reach-5bn-2021#sthash.a5mOrOpt.dpuf

Analysts oppose universal 15% VAT

The government should not apply a universal 15.0% VAT on all items, considering the prevailing situation in Bangladesh, as it will hurt the small and medium enterprises, analysts said yesterday. Instead of imposing 15.0% VAT for all, the indirect tax should be applied fully for those businessmen who maintain records and accounts and can claim rebate on previously paid VAT on input. Those who do not have adequate papers should be allowed to pay VAT based on value addition in that stage, he suggested. It will rather be good to have two systems in place, said Mahmud at a discussion on the national budget for fiscal 2016-17. The Institute of Chartered Accountants of Bangladesh and Prothom Alo jointly organised the event at the newspaper’s office in Dhaka.

Source: http://www.thedailystar.net/business/analysts-oppose-universal-15pc-vat-1226725

Transport sector needs BDT 29.0 billion extra fund for next fiscal

Road Transport and Bridges Minister Obaidul Quader has sought BDT 29.0 billion additional fund from the government in next year’s development budget for transport sector, officials said Thursday. The minister had claimed that the government had provided BDT 43.08 billion less than what is required in the development budget. The government in the newly-approved Annual Development Programme (ADP) for the next financial year (FY) 2016-17 allocated BDT 81.61 billion — BDT 40.09 billion from its internal resources and BDT 41.51 billion from the external resources as project aid (PA) — for the Ministry of Road Transport and Bridges (MoRT&B). The road transport minister in his letter to the planning minister claimed that his ministry had received BDT 43.08 billion lower fund from its total requirement of BDT 121.58 billion for transport sector development next year.

Source: http://print.thefinancialexpress-bd.com/2016/05/20/141988

FBCCI seeks cut in VAT on jewelry, diamond to 1.5%

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) proposed a cut in the Value Added Tax (VAT) on jewelry and diamond industry downwards to 1.5% from existing 5.0% in the budget for the fiscal year 2016-17. The chamber body made the proposal in a letter to Finance Minister AMA Muhith Wednesday. The FBCCI sent the letter containing joint proposals of Bangladesh Jewelers Samity, Bangladesh Poddar Samity, Bangladesh Gem Stone Merchants Association and Bangladesh Jewelry Manufacturers and Exporters Association.

Source: http://print.thefinancialexpress-bd.com/2016/05/20/141978

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