National Bank recovers Tk 900cr bad loans till Oct

National Bank has been able to recover about Tk 900 crore of defaulted loans as of October and initiatives are underway to recover another Tk 400 crore by this year, said its chairman, Abdul Awal Mintoo, today.

He was addressing a press conference at its head office in the capital's Banglamotor to inform of the bank's overall condition and progress in reformative measures taken by the board of directors since its formation 100 days ago.

National Bank has been facing significant financial challenges for bad loans, irregularities, and governance failures for over a decade, particularly since 2009, after Sikder Group took control of the lender.

"The irregularities that took place at the National Bank are multidimensional and multilateral. However, the situation will never reach a point where customers will not get money," said Mintoo.

"Initially, we are trying to bring a balance between withdrawals and deposits. So, it will take two or three more months to ensure smooth cash flow," he said.

For 2022 and 2023, the bank reported a combined loss of Tk 4,758 crore.

For the third quarter of 2024, the bank reported a loss of Tk 698.68 crore, a 40 percent increase compared to the same period last year.

Rising interest expenses on deposits and borrowings and the inability to recover loans have contributed to this situation. Customers have been complaining of being unable to withdraw money from the bank due to a cash crunch.

Bangladesh Bank has intervened multiple times, dissolving the board of directors to restructure the bank's governance. Recently, the central bank provided Tk 4,000 crore in liquidity support to mitigate the cash crunch.

The overall economy, including the banking sector, is going through an extreme recession and liquidity crisis, said Mintoo.

"A large part of this loss is due to panic and rumours among the common people. As a result, customers and depositors are becoming confused and their confidence in the banking sector is decreasing," he said.

However, National Bank is actively working alongside garment manufacturers and other industries, which are the major drivers of the economy, he said.

The bank is striving to ensure timely payment of salaries and allowances of garment workers and also provide letter of credit (LC) facilities, said Mintoo.

In recent times, National Bank has also been playing a strong role in enabling remittance inflow, he said.

The board of directors is focusing on two initiatives—bringing back laundered money in association with the Bangladesh Bank and the World Bank and taking steps to sell assets of defaulters to recover bad loans, he said.

Moazzam Hossain, vice chairman of the bank, said with the central bank's cash support, the bank would preliminarily try to ensure fund withdrawals for emergencies of customers, such as for medical treatment.

He also hoped for the crisis at the bank to be mitigated within the next couple of months.