Written by The Banking Post
Nearly Tk 11 trillion in loans in Bangladesh’s banking sector are now considered risky, highlighting growing financial vulnerabilities, according to Bangladesh Bank.
In its Financial Stability Report 2025, based on loan data up to December, the central bank said risky loans—including defaulted, written-off and rescheduled loans—rose to Tk 10.88 trillion, accounting for 59.73 percent of total outstanding loans.
The figure marks a sharp year-on-year increase of Tk 3.31 trillion, underscoring worsening asset quality across the sector. In 2024, risky loans stood at around Tk 7.57 trillion.
The report also showed a continued rise in non-performing loans (NPLs), which climbed to Tk 5.88 trillion. In just three months since last December, bad loans increased by Tk 314.87 billion.
Total outstanding loans in the banking sector stood at around Tk 18.2 trillion at the end of 2025.
Of the total loan portfolio, corporate loans accounted for 45.85 percent, while large loans represented 31.16 percent, indicating a high concentration of credit exposure among major borrowers.
The central bank’s breakdown shows that, of total risky loans, defaulted loans amounted to Tk 5.57 trillion, written-off loans stood at Tk 834.79 billion, and rescheduled loans reached Tk 4.47 trillion.
Loan restructuring surged sharply in 2025, with banks rescheduling a record Tk 1.71 trillion in loans—more than double the Tk 850 billion restructured in the previous year.
The report noted that loans worth Tk 1.82 trillion, currently protected by High Court injunctions, cannot yet be classified as non-performing, suggesting the actual scale of stress could be even higher.
The deterioration in loan quality has also weakened banks’ financial buffers.
The capital adequacy ratio and risk-weighted asset ratio declined year-on-year, falling from 3 percent to 2.64 percent, reflecting mounting pressure on bank balance sheets.
Provisioning shortfalls remain another major concern.
Banks were required to maintain Tk 4.41 trillion in provisions against risky loans but managed to hold only Tk 2.49 trillion, leaving a provisioning deficit of Tk 1.91 trillion.
The widening gap signals a growing inability among banks to absorb potential loan losses, raising fresh concerns over the sector’s resilience and overall financial stability.
