National Bank saw a huge amount of losses pile up during the July-September period this year, mainly due to the non-recovery of loans disbursed in the past 15 years.
The lender incurred losses of Tk 698 crore in the three-month period of the current year, whereas it was Tk 499 crore in the same period of 2023.
The bank could not book interest on loans and advances due to the non-recovery of loans from defaulters, which resulted in the losses, according to a company disclosure on the Dhaka Stock Exchange (DSE) website.
Furthermore, the bank incurred higher interest expenses on deposits and borrowings. Consequently, the period concluded with an operating loss, it added.
The current board is trying to regain the confidence of investors and depositors through ensuring good governance in every sphere of business. Already, Bangladesh Bank has provided support to stabilise the situation.
Mid-level officials of the bank said the lender was once strong, but it started to become unhealthy after control was taken over by the Sikder family, which operated Sikder Group, in 2009 after the Awami League government came to power.
In the first nine months of the current year, its losses piled up to Tk 1,767 crore. Similarly, during the same period last year, the losses amounted to Tk 1,123 crore.
Its earnings per share stood at Tk 5.49 in the negative during the first three quarters of 2024 and Tk 3.49 in the negative during the same time of the previous year.
The lender is the first fully-owned private bank in Bangladesh and began its journey in 1983.
Until 2009, the bank's financial performance was strong as it had good profitability, liquidity and credit performance.
The bank's annual income statements showed a steady decline in net interest income, indicating a growing gap between interest income and interest expenses.
In 2022 and 2023, the bank suffered a combined loss of Tk 4,758 crore, with a high amount of classified loans regarded as one of the factors behind the abysmal performance.
The non-performing loans of National Bank have also escalated.
Alongside poor financial performances, various irregularities have plagued the bank.
The Sikder family, which took control of the lender in 2009, has been accused of engaging in financial irregularities, including approving loans in breach of rules and regulations.
