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The Banking Industry of Bangladesh
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The Banking Industry of Bangladesh

The Banking Industry of Bangladesh

The banking industry of Bangladesh plays a significant role in the economic development of Bangladesh. This report covers our overall banking industry, especially listed banks’ performance, size, trends, maturity, and contribution to building the country’s economic development. Following the Financial Sector Reforms Programme (FSRP) launch in 1990, new private banks entered the market, and foreign banks entered with more freedom following the program’s guidelines. After the 1971 war of independence, the banking industry in Bangladesh kicked off its journey with only 6 Nationalized commercialized banks, 3 State owned Specialized banks, and 9 Foreign Banks. However, over time the number of banks has grown by 61 scheduled banks in Bangladesh, which operate under the complete control and supervision of Bangladesh Bank. Scheduled Banks are classified into four categories: State Owned Commercial Banks, Specialized Banks, Private Commercial Banks, and Foreign Commercial Banks. Of 61 scheduled banks in our country, 33 are listed in the capital market.

In the past couple of years, the publicly traded banks’ business size in terms of assets grew at a CAGR of 12%; In FY2016, the assets accounted for Tk. 76,44 billion clocked at a double-digit growth rate per year and stood at Tk. 13,714 billion. As the country’s nominal GDP grew by approximately 13% in the last decade, 12% growth in bank assets refers to a complete economic moat with a cyclical stance. Apart from that, the aggregate risk capital of the listed banking industry was BDT 563 billion in FY2016, which shot up by a CAGR of 9% to Tk. 853 billion in FY2021. With a matter of concern, the NPL in the country’s banking sector escalated to BDT 1,032 billion in FY2021, in which listed banks account for 72% of the aggregate NPL amount, putting pressure on the share price and dividends for the last few years. Classified loans to total outstanding loans and advance ratio increased by 7.9% in FY2021 in contrast to 7.2% in FY2016, according to published data sources, i.e., annual reports of the listed banks.

banking industry of Bangladesh -RCL Industry Report

From the financial performance viewpoint, the listed banks generated a five years average of 17% Net Margin, 0.7% Return on Assets (ROA), 10% Return on Equity (ROE), 9% Capital to Risk-Weighted Assets, Tk. 2.66 Earnings per Share (EPS), Tk. 25.12 Net Assets Value per Share (NAVPS) and 13% Non-Performing Loan (NPL) tell about a good bottom line growth subject to a marginal level of credit risk. Investors and other relevant stakeholders should consider those while making rational business and investment decisions.

Total loan disbursement by the listed banking industry stood at BDT 93,071 billion in FY2021, where Trade financing and Textile & RMG industry carried a significant percentage of disbursement respectively by 23.8% and 20.1%, followed by Construction, Food & Beverage, Engineering, Transport & Communication, Agriculture, Service, Power & Energy, Pharmaceuticals, Paper & Packaging, and others. Other industries include tea manufacturing, wood & wooden products, leather, backward linkage, plastic & plastic products, IT, tobacco, and miscellaneous industry, carrying 29.8% of total loan disbursements in FY2021.

There is intense competition in the banking sector due to the establishment of numerous banks concerning the size of the economy. Besides, the quality of banks’ assets raises concerns to some extent which can be validated by the 8% non-performing loan ratio over the past couple of years. However, apart from the challenges related to the recovery of NPL, good governance, and mitigating operational risks, our overall banking industry inherently possesses a satisfactory level of growth prospects for the upcoming years.

  • November 26, 2022


  1. Mozammel
    December 1, 2022

    Thanks a lot for such a lot of informative analysis report…Go ahead RCL

    1. admin
      March 2, 2023

      Thank you

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