Ahsan Habib

The profit margin of Grameenphone Ltd was around seven times more than that of Robi Axiata Ltd in 2023.

Stock investors in Bangladesh are leaving the share market as they are losing their hard-earned money because of the persisting fall of the indices driven by the prolonged economic crisis, the worsening health of the banking industry, and rising interest and exchange rates.

SS Steel Ltd has registered higher turnover thanks to increased sales ever since the steelmaker started acquiring several companies in 2020, but its overall profit has dropped.

Investors who owned the issues of good companies that provided at least 50 percent dividend in their last financial year incurred losses in the first four months of 2024. On the other hand, people who bet on low-performing companies, which declared less than 15 percent dividends, saw their portfolio inflate.

Why is there such a huge discrepancy between multinational banks and state-run lenders despite operating in the same business environment? The reason is a lack of efficiency in making business decisions, business focus, and political bias.

As a result, general investors remained in the dark about the financial performance of the company during this period.

The profit amounted to Tk 999 crore, soaring 70 percent year-on-year. It was Tk 587 crore in 2022.

Analysts say the regulator’s intervention is denting investors’ confidence and it comes at a time when they are still smarting from the wounds caused by the 18-month-long floor price, a period when most of the stocks were untradeable.

The government spent Tk 246,583 crore in July-January of 2023-24 out of the total budget of Tk 761,785 crore for the entire fiscal year, figures from the finance ministry showed. The outlay under interest payments and subsidies was Tk 88,226 crore, which was 36 percent of the allocation.

Since the floor price removal, the stocks have been bleeding owing to massive sell-offs by local and foreign investors as the economic uncertainty persists

In the last decade, the debt-to-GDP ratio rose by 13 percentage points. The IMF forecasts that the ratio will reach 43.5 percent in 2028-29.

A top official of the ministry said the government would increase the number of beneficiaries in two major schemes – the old age allowance and the allowance for widows, deserted, or destitute women.

The British multinational bank logged profits of Tk 2,335 crore in 2023, up from Tk 1,655 crore in 2022, according to its financial reports.

The merger guideline for banks and financial institutions is being hailed as a major step towards fixing the problem in the financial sector, which has been weighed down by massive default loans and weak corporate governance.

Last year, MNCs paid Tk 5,060 crore as dividends, representing 72 percent of the total earnings while in 2022, they gave out Tk 6,346 crore in dividends, which accounted for 95 percent of the profits.

Bangladesh’s stock market has been going through a bear run for the last two months despite petering out of election-linked uncertainty, signaling that the worries about the macroeconomic challenges are far from over.

Bangladesh is already one of the top 10 markets for Bata Shoe but its Chief Executive Officer Sandeep Kataria thinks the country offers further growth opportunities for the multinational company.

Initially, it is the general stock investors who might be at the receiving end of the process while the loan defaulters, whose misdeeds are largely responsible for Padma Bank’s current misfortunes, might come out victorious.

Since the interest rates may rise further, the companies are taking steps to quickly pay back loans using funds from alternative sources, according to business leaders.

The profitability of the banking sector in Bangladesh is the lowest in South Asia due to the prevalence of higher non-performing loans, lower efficiency, and an elevated level of costs of funds.