Classified loans dropped to 30.60 per cent of total outstanding credit at the end of December 2025, down from 35.73 per cent in September, as banks stepped up rescheduling efforts to contain stress in the sector.
Data submitted by 61 scheduled banks to Bangladesh Bank show classified loans declined to Tk5.57 lakh crore as of 31 December 2025, from Tk6.45 lakh crore three months earlier, marking a quarterly fall of Tk87,298.33 crore.
Total loans and advances rose to nearly Tk18.21 lakh crore in December.
Within the classified portfolio, non-performing loans stood at Tk5.45 lakh crore, representing 29.92 per cent of total loans.
At the end of September, non-performing loans were Tk6.13 lakh crore, or 32.74 per cent, meaning NPLs declined by Tk68,039.57 crore and the ratio fell by 2.82 percentage points over the quarter.
Bankers said extensive loan rescheduling and restructuring, particularly of large exposures, helped reduce both classified and non-performing loans during the period.
They said several borrowers were brought out of default status under revised repayment arrangements in line with central bank policy support.
Banking analysts said classified loans and non-performing loans are not the same. Classified loans include all problem assets ranging from substandard to doubtful and bad or loss categories.
Non-performing loans represent the worst segment within that group, typically loans categorised as bad or loss with a low probability of recovery.
Despite the quarterly decline, the year-on-year picture remains worrying.
The gross classified loan ratio was 20.20 per cent at the end of December 2024, indicating an increase of 10.40 percentage points over one year.
After adjusting for provisions and suspended interest, the net classified loan ratio declined to 13.93 per cent at the end of December 2025 from 26.40 per cent in September, a fall of 12.47 percentage points.
State-owned commercial banks continued to carry the heaviest burden.
Their gross classified loan ratio stood at 44.44 per cent in December, down from 49.65 per cent in September.
Private commercial banks saw the ratio fall to 28.25 per cent from 33.75 per cent, while foreign banks recorded 4.51 per cent, down from 4.92 per cent.
Specialised banks reported 39.74 per cent, compared with 41.95 per cent three months earlier.
Credit growth continued during the year.
Total loans increased by nearly Tk1.1 lakh crore, or 6.40 per cent, from Tk17,11,401.91 crore in December 2024.
Private commercial banks recorded the highest growth, with lending rising by Tk96,923 crore, or 7.56 per cent.
Sector insiders said while headline ratios improved in the latest quarter largely due to rescheduling, underlying asset quality pressures remain elevated, particularly in state-owned and specialised banks.
