Corporate
National Bank under provision deficit and intense financial crisis
Private Commercial National Bank has been suffering from severe financial crisis for two years. The bank is now planning to raise 100 million dollars or 1000 crores of funds from foreign sources through foreign bond issue to fulfill the regulatory capital requirements.
Meanwhile, Bangladesh Bank is planning to appoint an administrator to the bank, which is facing a provision deficit and financial crisis.
According to the data of Bangladesh Bank, the bank’s capital deficit at the end of June this year stood at Tk 300 crore and due to high non-performing loans, the bank also faced a huge provision deficit of Tk 7,115 crore in June. Provisions are funds set aside by banks to compensate for future losses.
According to information published on the Dhaka Stock Exchange (DSE) website on Sunday, the board of directors of the bank has decided to issue seven-year bonds worth $100 million in foreign currency subject to the approval of regulatory authorities.
National Bank will be the first private bank to issue foreign currency bonds to raise funds from foreign investors.
Managing Director of the bank. Mehmood Husain, when contacted, said the fund had to be raised due to high non-performing loans eroding the bank’s capital.
Mehmood Husain said that they are trying to collect funds from US and UK-based investors. Foreign funds are not just banks; He commented that it will be good for the country.
The board of directors of the bank has approved the foreign currency bond as we have received preliminary assurances from the foreign investors after informing them about the high non-performing loans and the current financial situation, he said. The main reason behind the investment by foreign investors is that the bank’s asset base is quite strong.
He said that he wants to reorganize the bank’s business strategy by focusing on the SME sector to get out of the dependence on corporate loans.
As part of this, the bank plans to strengthen its capital by raising funds from domestic and foreign sources. Earlier in May, the bank announced to raise Tk 500 crore from domestic sources by issuing subordinated bonds to meet regulatory capital requirements.
National Bank’s capital adequacy ratio (CAR) for risk-weighted credit exposure stood at 9.38pc in June, which is required to be at least 10pc as per the regulatory body’s conditions.
According to Bangladesh Bank, the bank’s capital deficit at the end of June this year stood at Tk 300 crore. Increasing defaults due to huge loan non-conformities squeeze the bank’s capital.
The bank’s non-performing loan ratio stood at 23.24pc in June, the second highest among private sector banks. The bank also faced a huge provision deficit of Tk 7,115 crore in June as a result of high non-performing loans.
Provisions are funds set aside by banks to compensate for future losses. High NPLs require banks to maintain higher provisioning, which is collected from profits.
A growing provisioning deficit erodes banks’ capital which constricts banks’ ability to lend, putting public money at risk.
The bank posted a loss of Tk 190 crore in the first six months of this year under the pressure of growing provision deficit and capital loss.
Even after Bangladesh Bank appointed an observer to the board of directors of the bank in 2014, the financial condition of the National Bank has been deteriorating for the past two years. The bank’s share price on DSE has remained below the face value of Tk 10 for the last two years due to deteriorating financial indicators.
Bangladesh Bank identified the bank as one of the 10 weakest banks after new governor Abdur Rauf Talukder took charge. In a recent press conference, the governor said about identifying 10 weak banks, the central bank will sit with them one-on-one to improve the condition of the banks.
Banks are classified on the basis of their capital shortfall, NPL ratio, provisioning and loan-deposit ratio.
The governor has already held a meeting with the owners and top management on the financial performance of the National Bank. The central bank is now planning to appoint an administrator to the bank, a Bangladesh Bank source said.
Bangladesh Bank suspended the loan operations of the bank in May last year in the context of liquidity crisis caused by huge loan irregularities.
The moratorium was later lifted in December when liquidity conditions improved. But even after the long moratorium, the central bank was forced to go into moratorium again in May this year due to the continued irregularities in the bank loans. However, this time Bangladesh Bank limited the credit sector by giving a partial suspension.
DHAKA, Nov 07, 2024 (BSS) – Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) has elected a 16-member Board of Directors for the term 2024-2026 with Tareq Rafi Bhuiyan (Jun) as its President.
The election was held on October 27 and November 6, said a press release today.
Tareq Rafi Bhuiyan (Jun) has been elected as the President of JBCCI. He is the Managing Director of New Vision Solutions Limited. He has been the Secretary General of JBCCI for three consecutive terms.
Maria Howlader FCA has been elected as the first female Secretary General of JBCCI. She has also been re-elected as a Board Member for two consecutive terms.
Kenji Kimura has been elected as the Treasurer of JBCCI. He is the Chief Representative of MUFG Bank Dhaka Office, which is the largest Bank in Japan and a member of Mitsubishi Group.
Out of a group of 313 members, including 71 Japanese member companies, the voting process saw a notable turnout of 61.98 percent.
Afsana Zarin has consistently demonstrated her strategic vision and dedication, developing and empowering women entrepreneurs through technology, leaving a lasting impact on the industry.
Recently, she was recognized for her efforts at the Junior Chamber International (JCI) Bangladesh Award in the Women in Innovation with Inclusion category. The award ceremony took place at Hotel Le Meridien in Dhaka on Friday, October 25, 2024.
The prestigious event was graced by notable guests, including Dr. Iftekharuzzaman, Head of Anti-Corruption Reform Commission and Executive Director of Transparency International Bangladesh, who attended as the Chief Guest. Md Mukhlesur Rahman Sarker, Additional Secretary, Ministry of Women & Children Affairs, attended as the Special Guest, and Rasheda K Chowdhury, Executive Director (CEO) of CAMPE, delivered the keynote speech.
“I am humbled and thrilled to be recognized as a woman of inspiration. Being able to work for women entrepreneurs in Bangladesh is a privilege. Thanks to ShopUp for allowing me to work with thousands of entrepreneurs across Bangladesh. This award inspired me even more towards this north star, and I plan to drive more inclusion through technology in Bangladesh in the coming years,” Afsana said.
Afsana extended her gratitude to the board members of JCI Bangladesh, Imran Kadir, the 2024 National President of JCI Bangladesh, Fahim Ahmed, the event director and the event organizers for selecting her for this honor.
JCI Bangladesh is a nonprofit global organisation that empowers and encourages the youth of the nation to take an active part in helping fellow entrepreneurs and professionals of their own communities to thrive and be successful.
The ceremony, which celebrated the achievements of women leaders in various fields, highlighted Afsana’s contributions to driving women’s economic empowerment through innovative programs and technology.
Her work has set an example for aspiring entrepreneurs, and her commitment to fostering inclusion through technology and creating opportunities for women continues to inspire many in Bangladesh.
Correspondent To witness the deep and diverse historical culture and the latest achievements of high-quality development, the seven-day “International Insights into China” event was held with the theme of “Towards Openness and Integration of the New Era”. The event was held in various cities in China’s autonomous region of Inner Mongolia and Shaanxi Province between October 13 and 19. Media reporters and international students from different countries, including Bangladesh, participated in it.
This event is guided by the Cyberspace Administration of China’s Network Communication Bureau and jointly co-hosted by the Cyberspace Administration of Inner Mongolia Autonomous Region, the Cyberspace Administration of Shanxi Province, and China Daily Newspaper.
During the event, the delegation members visited the Inner Mongolia Museum, Yili Modern Smart Health Valley, Mengcao Seed Industry Center, Grassland Cloud Valley, Huawei Cloud Service Data Center, Qisumu Railway International Logistics Park, Huayan Temple, Hanging Temple and Yungang Grottoes, and Yingxian Wooden Pagoda. They have immersed themselves in the profound and diverse historical and cultural charm of Inner Mongolia and Shanxi, and witnessed the latest achievements of high-quality development. During the activities, the delegation members used their unique “outside eyes” perspective, lenses, and pens to show the world the beautiful picture of cultural inheritance and innovative development in Inner Mongolia and Shanxi and tell the extraordinary story of the local practice of Chinese-style modernization.
The journey began on 13 Oct, and on Oct 14, they explored the Inner Mongolia Museum in Hohhot, where the city’s grassland culture and historical heritage. From Oct 15 to 16, the delegation visited Inner Mongolia’s Ulaanqab City, also known as the “Prairie Technology Valley”, where the Huawei Cloud Data Center, a core area of Inner Mongolia’s big data industry, left a lasting impression on the delegation. The second half of their journey was devoted to Shanxi province. From Oct 16 to 19, they visited iconic tourist sites, such as the Huayan Temple, Nine-Dragon Wall, Hanging Temple, Yungang Grottoes in Datong City, and the Yingxian Wooden Pagoda in Shuozhou City.
Bayasgalan Lkhagvadulam from Mongolia, after climbing the Hanging Temple, said it is marvelling. It’s hard to imagine how people built this temple on the cliff 1,500 years ago. It’s awe-inspiring. If you are interested in ancient architecture, I highly recommend visiting Shanxi to see it yourself.
A group of 20 foreign media journalists, experts, and international students from different countries and regions, including Bangladesh, Kazakhstan, and Mongolia, participated in this event.
You must be logged in to post a comment Login