An internal Bangladesh Bank (BB) document has revealed significant exposure of the country’s banking sector to high-risk of defaulted loans linked to six major business conglomerates.
The confidential analysis highlights widespread vulnerabilities across multiple banks, raising concerns over asset quality and risk management in the financial sector.
The document, titled “Selected Lead Banks, Impacted by Six Groups”, categorises affected financial institutions based on their exposure to non-performing loans associated with six business groups. The groups or individuals identified are: Saifuzzaman Chowdhury, S Alam, Beximco, Sikdar, Nassa and Orion.
According to the data, Islami Bank Bangladesh PLC appears in five of the six exposure categories, indicating extensive involvement across multiple high-risk loan portfolios. Newly consolidated Sammilito Islami Bank PLC is listed under all six groups, suggesting that its balance sheet carries significant inherited non-performing assets from merged weak banks.
Other banks appearing frequently across the exposure lists include First Security Islami Bank, Social Islami Bank, Union Bank, Janata Bank, Rupali Bank, IFIC Bank, United Commercial Bank, AB Bank and Al-Arafah Islami Bank.
State-owned banks such as Sonali Bank and Agrani Bank are also shown to have notable exposure to defaulted loans linked to the identified groups.
In response to the rising systemic risk, Bangladesh Bank has initiated steps to assign selected institutions as “lead banks” to coordinate recovery efforts in collaboration with international firms.
The criteria for selecting lead banks reportedly prioritise institutions with prior experience in handling international non-disclosure agreements (NDAs), enabling them to manage complex negotiations and recovery processes.
The designated lead banks for each group are as follows:
Saifuzzaman Chowdhury group: United Commercial Bank PLC (lead), Islami Bank Bangladesh PLC, Al-Arafah Islami Bank PLC.
S Alam group: Islami Bank Bangladesh PLC (lead), Janata Bank PLC, Sammilito Islami Bank PLC.
Beximco group: National Bank PLC (lead), Janata Bank PLC.
Sikdar group: IFIC Bank PLC (lead), Sammilito Islami Bank PLC, Agrani Bank PLC.
Nassa group: National Bank PLC (lead), IFIC Bank PLC, Al-Arafah Islami Bank PLC.
Orion group: United Commercial Bank PLC (lead), Agrani Bank PLC.
The document also states that banks undergoing or scheduled for merger will not be eligible to act as lead banks, reflecting ongoing policy considerations within Bangladesh Bank."UNB
