The four state-run commercial banks in Bangladesh are no longer moving as a single troubled bloc, shows central bank data.
Recent performances indicate a widening divergence as Sonali Bank is stabilising after years of tight control, while Janata Bank continues sinking into balance-sheet distress along with Agrani Bank and Rupali Bank remaining under heavy strain.
The contrast highlights how governance and credit discipline, rather than ownership alone, are shaping outcomes.
Janata Bank’s decline has been long and cumulative. A decade ago, the lender absorbed losses of Tk3,359 crore from the AnonTex Group scam. However, that episode failed to trigger lasting reform. In 2024, Janata’s exposure to Beximco expanded to around Tk25,000 crore, breaching the single-borrower limit, with a significant portion later defaulting.
Each cycle of weak oversight added to an already swollen stock of bad loans, pushing the bank toward what officials privately describe as a solvency-level risk.
Sonali Bank followed a different trajectory after its own crisis. The Tk2,700 crore Hallmark loan fraud in 2012 forced the bank to tighten large-corporate lending, strengthen internal checks and shift credit toward smaller businesses and agriculture.
While far from healthy by global standards, Sonali now reports the strongest metrics among the four state lenders, according to data submitted to Bangladesh Bank.
Asset quality illustrates the gap. By the end of June, Janata’s non-performing loans (NPLs) stood at Tk72,107 crore, representing 70.84 percent of its disbursed loans, after rising by Tk4,218 crore in the first half of the year.
Agrani Bank and Rupali Bank reported NPL ratios of 40.55 percent and 44.0 percent, respectively. Sonali Bank’s NPL ratio stood at 20.98 percent in September, the lowest among the group but still high enough to constrain lending and profitability.
Capital adequacy poses a broader challenge. All four banks fall short of minimum regulatory capital due to the scale of defaulted loans, but Janata’s position is the most precarious.
As of June, Janata’s capital shortfall reached Tk65,093 crore, far exceeding those of its peers and signalling a deep erosion of its loss-absorbing capacity.
Agrani Bank and Rupali Bank recorded shortfalls of Tk23,240 crore and Tk18,054 crore, while Sonali’s gap was Tk3,268 crore.
During the January-June period, capital shortfalls narrowed at Sonali and Agrani but widened further at Janata and Rupali.
Weak recovery from defaulters continues to weigh on the system. In the first half of the year, Sonali Bank recovered Tk580 crore in cash from defaulted and written-off loans, the highest among the four.
Agrani and Rupali recovered Tk390 crore and Tk350 crore, respectively. Janata, despite holding the largest volume of bad loans, recovered just Tk267 crore, underscoring enforcement and governance constraints.
Loan concentration further amplifies risk. Janata reported that 76 per cent of its funded loans are tied to only 33 borrowers. Rupali has 63 per cent concentrated among 32 borrowers, and Agrani 44 per cent among 19 borrowers.
Sonali again stands apart, with just 9 per cent of its funded loans concentrated among five borrowers, limiting its exposure to single-name failures.
Liquidity buffers reveal similar divergence. As of August, Sonali Bank held Tk84,157 crore in liquidity, providing a stronger cushion against withdrawals and funding stress.
Agrani’s liquidity stood at Tk16,541 crore, Rupali’s at Tk12,312 crore, and Janata’s at Tk6,300 crore. Bankers warn that Janata’s thin liquidity, combined with its capital shortfall, leaves it especially vulnerable to shocks.
Bangladesh Bank has imposed biannual performance-improvement targets on the four state-owned banks since 2007, covering recovery, default reduction, capital strengthening and profitability.
However, progress has been uneven. Officials acknowledge that years of politically influenced lending under the previous government undermined Janata, Agrani and Rupali, while Sonali’s post-Hallmark restraint allowed it to stabilise.
