National Bank Limited (NBL), which has become the news of defaulters in the loan scam, has counted a loss of about Tk one and a half thousand crore in last year.
The bank has counted this amount of losses in the last year 2023 due to defaulting on large loans, not being able to collect interest against the loan and paying the interest amount borrowed to meet the cash crunch.
Bangladesh Bank (BB) is planning to merge NBL with private United Commercial Bank (UCB) in the bank merger talks.
Last Saturday, however, the board of directors of the NBL withdrew from the merger plan.
On being listed, the bank informed the Dhaka Stock Exchange (DSE) on Sunday that the loss per share of NBL was 4 taka 65 paisa in 2023.
The audited financial report of 2023 was approved (adopted) in the meeting of the board of directors of the bank last Saturday.
In the previous year, the bank had a consolidated net loss per share of 10 taka 13 paise. A year before that, in 2021, the profit per share of NBL was 12 paise.
According to the information, the number of shares of NBL is Tk 321 crore 97 lakh 39 thousand 570. According to this, the bank made a total loss of 1 thousand 497 crore 17 lakh taka in 2023.
The loss was like Tk 3 thousand 261 crore 60 lakh in the previous year. In 2021, the bank made a profit of Tk 381.5 million.
NBL's independent director and Chairman Dr. Syed Ferhat Anwar said, "The bank is now incurring losses due to a combination of old deposits. If those who took money from the bank return the money, the problem will be solved. It is their responsibility to return the money."
As the reason for the loss, he said, interest expenses have increased more than income due to non-repayment of loans by many industrial groups. There is a shortage of cash. Other banks and financial institutions have to pay more interest while borrowing money.
According to NBL's unaudited financial report, the bank's loss per share in the first nine months to September last year was Tk 3.52. According to this, the loss of the bank in 9 months was Tk 1 thousand 133 crore 34 lakh.
In the last quarter i.e. October-December, the bank recorded a new loss of Tk 363 crore 83 lakh.
In the 9th month of 2023, the bank earned Tk 1 thousand 278 crore 48 lakh as interest. During this period, the depositor paid interest amounting to Tk 209 crore 95 lakhs against the money collected.
In just 9 months, the bank incurred a loss of Tk 931 crore 47 lakh while paying interest. In the first 9 months of 2022, the bank made a loss of only Tk 386 crore.
At the end of last September, NBL had a balance of Tk 1,273 crore as a loan from other banks and financial institutions.
According to the data of the BB, as of last September, out of the total disbursed Tk 42 thousand 260 crore, defaulters are Tk 13 thousand 515 crore, the default rate is 31.98 percent.
Against this, the amount of deposits in the bank was Tk 41 thousand 226 crores. The bank made a profit in 2021 by giving a 5 percent bonus to the investors last year 2020, but did not give any dividend to the investors for that year.
The bank has decided not to pay any dividend to the investors for the year 2023 like last year 2021 and 2022. As per rules, loss making listed companies cannot pay dividends. Although the bank has Tk 1 thousand 972 crores in reserves.
According to the data provided by the NBL, the cash flow per share in 2023 was Tk 1.84. In the previous year the debit was Tk 17 taka 21 paisa. But in 2021, it was Tk 2 taka 11 paisa as a positive.
The NBL could not take the interest as income due to defaulting on large loans and not being able to collect the money from the borrowers.
The list of those who have not returned the loan has been shown as defaulters. Because of this, the default amount of the bank has increased in the last year 2023 as well. Even if the interest increased, it could not be shown in the income sector as it was not collected.
According to information provided to DSE, the NBL had to borrow money at high interest rates to meet the demand for cash. Due to this, the scale of losses has become heavier.
Syed Ferhat Anwar said, "We have written to all institutions to return the money. I am discussing with those who contacted. We have told them, if they are with the bank, we will also look at their side.''
In May 2022, BB banned the disbursement of loans by the NBL in the context of the board of directors' failure to uncover and manage the loan scam.
The ban was lifted eight months later on December 29 of that year. But in order to restore credit order, BB banned lending more than Tk 10 crore in January.
At the same time, the bank can only lend in working capital, consumer, agriculture, CMSME sectors. Apart from this i.e. project loan, import financing or against export bill the bank cannot disburse any loan.
Syed Ferhat Anwar also commented that the loss figure at the end of the year reached 1.5 thousand crores and said, "The income of the bank has naturally decreased due to not being able to distribute loans. Now we are trying to collect the low interest depositors. We are also making the listing of voluntary defaulters. Necessary action will be taken based on that list. With everyone's cooperation, I hope the bank will be able to return to profitability very quickly. According to the BB policy, banks are required to set aside 0.5% to 5% of profit against their disbursed loans as regular or unclassified, 20% against substandard classified loans and 50% against doubtful classified loans as provision.
And if the defaulted loan is considered to be bad or bad debt, against it, 100% provision i.e. the amount equal to the amount of bad debt should be deducted from the profit. The higher the amount of defaulted loans, the more provision the bank has to keep.
The bank is not even able to maintain the necessary provisions due to money being stuck. At the end of last September, the bank had an obligation to preserve provisions of Tk 15,681 crore against defaulters. But the bank had a deficit of 13 thousand 797 crores in this sector. This was increased at the end of December.
NBL was started by 18 entrepreneurial directors in 1983, among whom were AKM Abu Taher, Abu Taher Mia, Zainul Haque Sikder, Khalilur Rahman and Moazzem Hossain.
Then in 2009, the control of the bank went to Zainul Haque Sikder, chairman of Sikder Group, through a massive change in the board of directors. Then one by one the directors of other families dropped from the board. Zainul Haque Sikder's wife and children came to the council.
When Zainul Haque Sikder died in February 2021 after being the chairman for more than an era, his wife Monowara Sikder served as the chairman till last December.
After one year in August 2022, entrepreneur director and Hosaf Group chairman Moazzem Hossain had to step down from the board. Mabrur Hossain of the same family also dropped out. Through this, the Sikdar family's authority over the bank became more absolute.
Khalilur Rahman, the chairman of KDS Group, was among the entrepreneurial directors outside this family as a director. Moazzem Hossain was the director of the bank since its establishment in 1983.
After their father's death, Ron Haque Sikder, Rick Haque Sikder and daughter Parveen Haque Sikder clashed over control of the bank and the family business. Manowara Haque Sikder failed a lot to handle the children's disputes. The family feud also affected the NBL progress. With four directors from the Sikdar family on the board of directors, the conflict became apparent.
Among them, irregularities in loans and money laundering and loan scams of about Tk 150 crores through credit cards of Sikdar family member's directors were revealed.
In the midst of the bank's plight, the board of directors of the NBL was canceled and a new board was formed last December citing various reasons including violation of rules and regulations. After a long time, Syed Ferhat Anwar was appointed as the chairman outside the Sikdar family.
ZH
