Written by The Banking Post
Job losses in Bangladesh’s financial sector are set to mount as bank mergers and the liquidation of non-bank financial institutions (NBFIs) collide with prolonged weakness in the money and capital markets, leaving little room for displaced workers to find new employment.
While the central bank has assured that the merger of five troubled banks will not directly result in layoffs, analysts say job cuts across the wider financial ecosystem are inevitable. Institutional restructuring, they argue, rarely comes without human cost.
Bangladesh Bank has decided to liquidate nine NBFIs following the bank merger process. These are FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing and International Leasing. Eight of them are listed companies, many with subsidiaries and associate firms active in the capital market.
Market analysts estimate that more than 300 employees across these NBFIs and their related entities will lose their jobs as operations shut down. With liabilities exceeding assets in most cases, there is little scope to protect employee benefits during liquidation.
The impact is unlikely to remain confined to the liquidated institutions. Weak investor confidence and eroding depositor trust have already curtailed hiring across brokerage houses, merchant banks and other intermediaries. Several firms are struggling to survive and face closure unless market conditions improve.
Brokerage firms are incurring sustained losses as the secondary market remains bearish. Daily turnover hovering around Tk 4 billion is far below the level needed for most firms to break even. Merchant banks are under similar strain, with persistently low equity turnover forcing many to scale down operations.
Industry insiders note that many of the troubled institutions were financially sound a decade ago but were gradually weakened by irregularities, mismanagement and large-scale loan scams. International Leasing is often cited as an example, having performed well until mid-2010s before loan frauds severely damaged its balance sheet.
For employees, uncertainty is already taking hold. Staff at several NBFIs say they remain unclear about their future as liquidation plans advance.
Market leaders warn that employment prospects will remain bleak unless confidence returns to the capital market. Employment growth in brokerage houses and merchant banks has already turned negative, while stress is also evident in some banks and life insurers.
The central bank has said liquidators will be appointed to assess assets and liabilities, sell recoverable loans and properties, and distribute proceeds among depositors. However, industry participants say this process offers little relief for workers.
Stakeholders argue that a turnaround in the equity market is essential to stabilise the sector. They stress the need for policy support to raise market turnover, introduce quality investment instruments and encourage broader participation. Without a meaningful recovery, they warn, job losses in the financial sector are likely to continue.
