Banks’ loss-making branches soar
Business Report :
The number of unprofitable branches of banks in Bangladesh has risen sharply as about 15 per cent of the total branches are operating at a loss due to the increase of non- performing loans, low deposit mobilization, shifting customer behavior and structural inefficiencies.
Despite the decrease of the total number of branches in last nine months, the loss-incurring branches in the country’s banking system surged significantly as out of 11,247 brick-and-mortar outlets, 1,680 were operating at a loss as of March 30, up from 1,216 out of 11,165 branches in June 2024, data from the central bank showed.
Due to the surge in loss incurring branches, overall banking sector incurred total Tk 2,004 crore loss in March compared with Tk 4,282 crore of net profit after tax in June 2024.
Sector insiders said that mounting defaults are the main reason behind the deterioration.
They also pointed that under the previous Awami League-led government, which was ousted on August 5, 2024, a significant portion of bad loans had been concealed through manipulating, repeated rescheduling, and regulatory forbearance.
Once the actual data surfaced after the political change, public confidence in several private commercial banks eroded rapidly.
The latest report from Bangladesh Bank states that aggregated non-performing loans (NPLs) hit Tk420,334 crore by the end of March 2025, accounting for 24.13 percent of the total loans worth Tk1,741,992.13 crore disbursed by 61 commercial banks.
The previous quarter, ending December, recorded NPLs at Tk 3.45 trillion.
Therefore, depositors rushed to withdraw funds-particularly in rural areas-placing severe stress on branch-level liquidity.
Banking experts warned that unless banks restructure their operations, improve loan recovery, and modernise their services, the number of unprofitable branches may continue to grow.
They stress the need to accelerate the shift from a traditional branch-heavy model toward digital platforms to remain competitive and financially viable.
Moreover, the private commercial banks have been the hardest hit as the number of their loss-making branches rose to 1,249 in March 2025 from 758 in June 2024, while their total branch count increased marginally from 5,713 to 5,798 during the same period.
For some smaller or weaker banks, the withdrawal pressure was so intense that branches could no longer maintain daily operations without incurring losses.
Furthermore, State-owned banks, which have long struggled with inefficiency, political interference, and low recovery rates, also saw a significant increase in loss-making outlets. Loss-incurring branches at state-run banks rose to 237 out of 3,850 in March 2025, compared with 110 out of 3,846 in June 2024.
