The country’s 31 listed banks collectively posted a net loss of Tk1,424 crore in the July-September quarter of 2026, as mounting losses at distressed lenders wiped out profits generated by financially stronger institutions, highlighting deepening stress in the banking sector.
According to Dhaka Stock Exchange (DSE) data, nine banks reported combined losses of Tk5,126 crore during the quarter, while the remaining 22 profitable banks collectively earned Tk3,702 crore.
The overall loss reflects mounting pressure on the banking sector from rising default risks, higher provisioning requirements and weak lending operations, according to industry insiders.
The results also revealed a growing dependence on investment income from government securities to sustain profitability. Pubali Bank, the quarter’s largest profit-maker, posted a record net profit of Tk900 crore, up 170% year-on-year, despite incurring a Tk150 crore loss in its core lending business.
Treasury bond investments and other income sources helped offset the weakness in lending, according to market insiders. With high default risks and sluggish credit demand limiting traditional lending opportunities, banks have increasingly turned to government securities for relatively predictable returns.
Pubali leads profit makers, distressed banks deepen losses
Of the 36 banks listed on the stock exchanges, trading in five remained suspended following their consolidation process with Sammilito Islami Bank. The remaining 31 banks published their third-quarter financial results. Among them, 16 reported higher profits, six recorded lower profits and nine incurred losses.
After Pubali Bank, BRAC Bank was the second-highest profit-maker, earning Tk697.50 crore, up 11% from Tk629.95 crore a year earlier. City Bank ranked third with Tk341 crore, although its profit declined 19%.
Prime Bank posted a 15% rise in profit to Tk251.66 crore, while Dutch-Bangla Bank’s earnings increased 21% to Tk182.33 crore. Jamuna Bank reported a 16% rise to Tk123.26 crore, and Shahjalal Islami Bank’s profit grew 19% to Tk136.46 crore. Eastern Bank’s profit edged up to Tk235 crore, despite a loss in its lending operations.
Islami Bank Bangladesh was the largest loss-maker, reporting a net loss of Tk1,970 crore, against a profit of Tk32.36 crore in the same quarter last year. Its core interest-earning operations incurred a loss of Tk1,499 crore.
AB Bank reported a loss of Tk880 crore, although it was narrower than the Tk1,342 crore loss a year earlier. IFIC Bank’s loss widened to Tk838 crore from Tk678 crore, while National Bank’s loss increased to Tk729 crore from Tk464 crore. Their lending operations recorded losses of Tk755 crore, Tk746 crore and Tk1,041 crore respectively.
Rupali Bank’s loss more than doubled to Tk355 crore from Tk168 crore. Premier Bank, however, narrowed its loss to Tk169 crore from Tk541 crore. Standard Islami Bank swung to a loss of Tk159 crore from a profit of Tk19.92 crore, while ICB Islamic Bank and NRBC Bank also reported losses.
NCC Bank tops profit growth, two lenders turn around
NCC Bank led profit growth among the listed lenders, with earnings surging 771% to Tk107.17 crore from Tk12.30 crore. Bank Asia followed with a 420% increase to Tk207.71 crore from Tk39.90 crore, while Mercantile Bank’s profit rose 252% to Tk23.21 crore from Tk6.58 crore.
South Bangla Agriculture and Commerce Bank also recorded a sharp 229% increase, although its profit remained modest at Tk2.70 crore.
Al-Arafah Islami Bank and NRB Bank returned to profitability after reporting losses in the corresponding quarter last year. Al-Arafah Islami Bank posted a profit of Tk5.02 crore against a loss of Tk56.25 crore, taking its January-September profit to Tk104.47 crore.
NRB Bank earned Tk1.39 crore, reversing a loss of Tk53.52 crore a year earlier. Its nine-month profit stood at Tk10 crore.
Bad loans and weak lending weigh on the sector
The weakness in core lending operations was widespread. Sixteen banks incurred losses from their lending businesses, while eight reported declines in net interest earnings. Only three banks recorded increases in interest income, according to the supplied figures.
A senior banker attributed the deterioration to structural weaknesses in the banking sector, including a surge in non-performing loans, governance failures and weak credit oversight. Defaulted loans have exceeded 32% of total outstanding loans across the industry, tying up capital that could otherwise support productive lending.
High inflation and energy supply disruptions have also weakened borrowers’ repayment capacity, increasing the pressure on banks to set aside provisions against bad loans. Liquidity shortages and capital shortfalls at distressed institutions have further constrained lending, the banker said.
A managing director of a brokerage firm said banks had increasingly shifted towards government securities as default risks rose and private-sector credit demand remained sluggish.
Treasury bonds offer coupon income and, in some cases, capital gains. Their relatively predictable returns have provided banks with an alternative income stream at a time when traditional lending has become riskier.
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