How National Bank lost its way 

National Bank Limited (NBL) is the first fully-owned private bank in Bangladesh that began its journey in 1983. It appeared on the scene with a single branch in Dhaka at a time when Bangladesh was in the grip of an economic crisis. The government encouraged the private sector to come into the banking sector to revitalise the economy. 

In the years that followed, NBL flourished as one of the largest and most prominent private lenders in Bangladesh. Until 2009, the bank's financial performance was strong as it had good profitability, liquidity, and credit performance. 

However, its financial health started deteriorating after 2009 when the Sikder Group took control.

The financial condition of NBL worsened significantly since 2009. The bank's annual income statements showed a steady decline in net interest income, indicating a growing gap between interest income and interest expenses. 

In 2022 and 2023, the bank suffered a combined loss of Tk 4,758 crore, with a high amount of classified loans regarded as one of the factors behind the abysmal performance. The non-performing loans of NBL have also seen an escalation. 

Default loans of National Bank accounted for 25 percent of its total loans at the end of 2022.Its classified loans stood at Tk 6,658 crore in 2022, accounting for 15.76 percent of the total loans and advances of the bank.

Alongside poor financial performances, the bank has been plagued by various irregularities. The Sikder family, who took control of NBL in 2009, has been accused of financial irregularities, including approving loans in breach of rules and regulations. 

The Anti-Corruption Commission filed a case against seven individuals, including Ron Haque Sikder and his brother Rick, for money laundering, accusing them of laundering a total of Tk 71 crore.

The Bangladesh Bank dissolved the National Bank board last year and appointed former Dhaka University Professor Syed Ferhat Anwar as the chairman, to stabilise the bank.

However, the prospect of a merger between National Bank and United Commercial Bank sparked panic among customers about the bank's financial stability, leading to a significant withdrawal of deposits. 

On May 6, the Bangladesh Bank dissolved the National Bank board again, with Parveen Haque Sikder losing the post of director.

The restructuring came after the now-defunct board split over the bank's merger with United Commercial Bank. Three independent directors, including the NBL chairman, resigned over the issue.