Declining Trends in Banks Profit

Declining-Trends-in-Banks-Profit

The banking business is slowing down. Profits of most of the banks have already started to decrease due to the implementation of  single-digit interest rate as instructed by the government. The negative effect of Coronavirus has exacerbated the crisis. The bankers fear that it is only the beginning. Some other banks will also incur losses. 

Only 8 out of 30  listed banks could increase their profit in the 2nd quarter of 2020 (April-June). However, the profit of 18 banks was decreased. Two banks were already at loss. The amount has further increases. The information of two other banks yet to be published.


Syed Mahbubur Rahman explained the Managing Director & CEO of Mutual Trust Bank Ltd. explained, '' It was expected that the profit will be decreased. As we had to bring down the interest rate of lending suddenly 9 percent but the deposit rate is still high.''

He further added,'' The government had instructed the banks to bring down their interest rates to single digit in order to accelerate the country's industrialization. It has been effective since April 1. The negative effects of Cornovirus have been added the pressure while implementing the single-digit interest rates. The amount of loans and repayments has also decreased. As a result, profit has started to decline.

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