Banking sector posted Tk 1.36 lakh crore net loss last year

The country’s banking sector recorded a net loss of Tk 1.36 lakh crore in 2025, as a surge in bad loans wiped out income across much of the industry, according to a Bangladesh Bank report.

Industry insiders said this marks the first time in more than a decade that the sector has posted an overall net loss. By contrast, banks reported a net profit of Tk 12,158 crore in 2024.

Officials and bankers attributed the downturn to a sharp rise in non-performing loans (NPLs), driven by years of lending irregularities, financial fraud and political interference in the sector.

They said the overall sector incurred a net loss despite several strong-performing banks posting hefty profits, while other lenders, including state-owned and shariah-based banks, were hit by heavy write-offs and increased provisioning pressures.

First Security Islami Bank posted the largest loss, with a net deficit of Tk 66,386 crore in 2025, compared with a net profit of Tk 135 crore a year earlier.

The shariah-based lender was previously hit by large-scale irregularities and scams during a period when its board was dominated by members linked to the controversial conglomerate S Alam Group. Mohammed Saiful Alam, chairman of the group, also served as the chairman of the commercial lender.

First Security Islami Bank, along with four other troubled lenders, is now being merged into a large Islamic bank. The process was initiated by the interim government after the fall of the Awami League-led administration in August 2024.

The other banks in the merger process are Social Islami Bank, which recorded a net loss of Tk 31,000 crore; EXIM Bank, with a loss of Tk 28,908 crore; Global Islami Bank, which posted a loss of Tk 13,144 crore; and Union Bank, which reported a loss of Tk 4,685 crore, according to official data.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said the overall banking sector is now in a very poor state, with limited income generation and virtually no profits.

“When more than 30 percent of loans are non-performing and distressed assets exceed 50 percent, losses are inevitable,” he told The Daily Star yesterday.

By the end of 2025, defaulted loans stood at Tk 5,57,217 crore. Unclassified rescheduled loans totalled Tk 2,68,733 crore, while loans under stay orders reached Tk 1,82,419 crore and written-off loans amounted to Tk 83,479 crore, according to Bangladesh Bank data.

Rahman, also a former chairman of the Association of Bankers, Bangladesh (ABB), said a large portion of recently rescheduled loans had been granted grace periods of up to two years, meaning banks would earn no income from them during that period.

“The condition of some banks is deteriorating even further,” he added.

Among private sector banks, AB Bank posted a net loss of Tk 3,706 crore, National Bank Tk 2,430 crore, IFIC Bank Tk 2,561 crore, and Premier Bank Tk 992 crore, according to central bank data.

Bad loans and other stressed assets at these banks increased sharply after the political changeover in 2024.

Among the state-owned lenders, Janata Bank recorded a net loss of Tk 3,820 crore in 2025.

Despite the wider losses, several banks reported strong profits last year, supported by relatively sound balance sheets and better asset quality.

BRAC Bank posted a standalone net profit of Tk 1,580 crore. Dutch-Bangla Bank reported Tk 938 crore, City Bank Tk 1,305 crore, Prime Bank Tk 890 crore, and Eastern Bank (EBL) Tk 900 crore in profits last year.

Bangladesh Bank data show that net interest income for the banking sector stood at a negative Tk 12,537 crore last year.