State banks pass hard times as loan growth stalls
After the recent concern over the performance of State owned banks, it seems that this type is still facing similar waves of hurdles. The Advance-to-deposit ratio (ADR), indicating how much loaned out to the amount deposited, is down to below 52% for Agrani, BASIC, Janata, Rupali, BDBL, and Sonali banks. These State owned banks, thus cannot hope to earn as they expected. All of the other banking types have higher ADR. 39 Commercial banks had over 76% ADR, 9 foreign banks had close to 60% and Islami banks had over 80% as of August 87.
The gap between credit and deposit of the State banks also grew 10% points at the time. Deposits grew 14.55% opposed to credit with only 4.48% year-on-year. Sonali bank had the most struggling credit growth of almost nil, compared to the industry, while troubled BASIC bank negative 18% credit and 1% deposit growth.
State banks have a handicap on nonperforming loans, for which they cannot reduce lending rates as private banks do. For many other reasons, State banks are struggling to find clients against private banking competition.
After the recent concern over the performance of State owned banks, it seems that this type is still facing similar waves of hurdles. The Advance-to-deposit ratio (ADR), indicating how much loaned out to the amount deposited, is down to below 52% for Agrani, BASIC, Janata, Rupali, BDBL, and Sonali banks. These State owned banks, thus cannot hope to earn as they expected. All of the other banking types have higher ADR. 39 Commercial banks had over 76% ADR, 9 foreign banks had close to 60% and Islami banks had over 80% as of August 87.
The gap between credit and deposit of the State banks also grew 10% points at the time. Deposits grew 14.55% opposed to credit with only 4.48% year-on-year. Sonali bank had the most struggling credit growth of almost nil, compared to the industry, while troubled BASIC bank negative 18% credit and 1% deposit growth.
State banks have a handicap on nonperforming loans, for which they cannot reduce lending rates as private banks do. For many other reasons, State banks are struggling to find clients against private banking competition.
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