Most private banking operating profits jumped – between 10% and 60% – over the past year, due to a recovery in the sector's demand for credit private.
Take, for example, the case of Islami Bank Bangladesh, the largest private lender in terms of deposits and loans. The bank recorded around 2,400 crores of Tk as operating profits for 2017, up 57 percent year-on-year.
Operating profit is a profit from commercial activities (gross profit minus operating expenses) before deduction of interest and taxes.
The upward trend in private sector credit growth in recent months has helped banks to make good profits for 2017, said Syed Mahbubur Rahman, managing director of Dhaka Bank.
At the end of November, private sector credit growth was 19.06%, exceeding the central bank target of 16.2% for the first half of the year. FY 2017-2018.
"Banks have made a remarkable income from the interest of their disbursed credit."
In addition, the export and import activities of banks have increased this year, said Rahman.
He warned, however, that final earnings figures may need to be revised downward to meet funding requirements.
In addition, banks must pay a 42.5% tax on their net income, he added. According to MA Halim Chowdhury, managing director of Pubali Bank, some banks earned considerable income last year through their offshore loans.
Pubali Bank's operating profits jumped 30.34 percent to 915 million rand last year, Chowdhury said, adding that almost all banks received revenues from investments in the financial markets.
"The banks also made an effort to recover their non-performing loans, which had a positive impact on their profit figures," he added.
The liquidity base of the banking sector remained stable in 2017, which allowed lenders to repay the credit in an uninterrupted manner, said Shafiqul Alam, managing director of Jamuna Bank.
"The cost of deposits was also lower last year, which also helped to generate profits," he said.
Jamuna Bank reported earnings growth of 14.65 percent in 2017.
Farmers Bank's operating profit dropped to 26 crore Tk in 2017 from 92 crore Tk a year earlier.