New Market Study Published: Bangladesh Commercial Banking Report Q4 2010

Oct. 31, 2010 - PRLog -- We expect loan growth to remain in the high teens in 2010 as the economy continues to recover and banks' balance sheets improve. However, with remittance growth decelerating sharply in H110, we forecast loan growth to slow from an estimated 19.6% in 2009 to 18.0% in 2010, and down to an average of 16.0% over 2011-2014. We forecast a continued improvement in the Bangladeshi banking sector in FY10/11 (July-June) as economic activity picks up after two dire years. The insularity of the domestic banking sector helped Bangladesh get through the global financial crisis with only a minor slowdown in GDP growth, from 6.2% in FY07/08 to 5.9% in FY08/09.     We forecas t GDP growth of 5.2% in FY09/10 and 5.6% in FY10/11 as Bangladesh suffers a lagged impact from the global financial crisis via weakened textile exports and slower remittance growth (due to reduced employment opportunities overseas). Loan Growth Picking Up Again Client Loans, % change y-o-y  Source: IMF International Financial Statistics A more conducive economic environment and relatively healthy balance sheets should allow Bangladeshi banks to maintain loan growth in the high teens in 2010 and 2011.     Bangladeshi banks followed up the deceleration in loan growth in FY08/09 by increasin g their risk-weighted capital asset ratio (RWCAR) in FY09/10. According to the most recetn available data, the overall RWCAR was 11.7% in December 2009, unchanged from three months earlier, with state-owned banks and state-owned commercial banks (SOCBs) again failing to achieve the minimum regulatory requirement of 10%. This contrasted starklyexpect this figure to continue to rise in the coming years. Bank Penetration Increasing Banking Assets, % of GDP  Source: IMF International Financial Statistics Nonetheless, we still regard the poor financial health of the four major state-owned commercial banks ( Agrani Bank , Janata Bank , Rupali Bank and Sonata Bank ) as the major weakness of the Bangladeshi banking sector. The corporatisation of the SOCBs in 2007 was followed up by further internal reform of management and operational structure. Nonetheless, further improvement needs to be made to increase the stability of the Bangladeshi banking sector.     The IMF said in its Financial System Stability Assess ment in February 2010 that the Bangladeshi banking sector had made progress under the Financial Sector Assessment Program (FSAP) since 2003, but risks remained in the form of a relatively high non-performing loan (NPL) ration and low loan loss provisioning among SOCBs. We agree with this analysis and view the continued advance of private sector banks as a positive over the medium-to-long term for the Bangladeshi banking sector. Asset Market Exposure Is A Risk To Positive Outlook The increasing involvement of domestic banks in capital market operations has arisen as a pertinent risk to banking sector stability over the past year. It is not surprising that the interest in capital market investments has risen in tandem with the ascent of the Dhaka Stock Exchange (DSE), which on June 10 was up by 126% year-on-year (y-o-y).

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Partial Table of Contents:

Executive Summary
- Table: Levels (BDTbn)
- Table: Levels (US$bn)
- Table: Levels At December 2009
- Table: Annual Growth Rate Projections 2010-2014 (%)
- Table: Ranking Out Of 59 Countries Reviewed In 2010
- Table: Projected Levels (BDTbn)
- Table: Projected Levels (US$bn)
SWOT Analysis
- Bangladesh Commercial Banking SWOT
- Bangladesh Political SWOT
- Bangladesh Economic SWOT
- Bangladesh Business Environment SWOT
Business Environment Outlook
- Commercial Banking Business Environment Ratings
- Table: Bangladesh Commercial Banking Business Environment Rating
- Commercial Banking Business Environment Rating Methodology
- Table: Asia Commercial Banking Business Environment Ratings
Global Commercial Banking Outlook
Asia Banking Sector Outlook
- Table: Banks' Bond Portfolios
- Table: Asia Commercial Banking Business Environment Ratings
- Table: Comparison Of Loan/Deposit, Loan/Asset And Loan/GDP Ratios
- Table: Anticipated Developments In 2010
- Table: Comparison Of Total Assets, Client Loans And Client Deposits, 2008-2009 (US$bn)
- Table: Comparison Of Per Capita Deposits, 2010 (US$)
- Table: Interbank Rates And Bond Yields, 2009-2010
Bangladesh Banking Sector Outlook
Economic Outlook
- Table: Bangladesh Economic Activity, 2007-2014
Competitive Landscape
- Market Structure
- Protagonists
- Table: Protagonists In Bangladesh's Commercial Banking Sector
- Definition of the Commercial Banking Universe
- List Of Banks
- Table: Bangladesh Association of Banks Members
Company Profiles
- Sonali Bank
- Table: Key Statistics For Sonali Bank, 2004-2008 (BDTmn)
- Janata Bank
- Table: Key Statistics For Janata Bank, 2007-2008 (BDTmn)
- Agrani Bank
- Rupali Bank
- Table: Key Statistics For Rupali Bank, 2008-2009 (BDTmn)
- Islami Bank Bangladesh
- Table: Key Statistics For Islami Bank Bangladesh, 2005-2008 (BDTmn)
- Prime Bank
- Table: Key Statistics For Prime Bank, 2003-2008 (BDTmn)
- Pubali Bank
- Table: Key Statistics For Pubali Bank, 2007-2009 (BDTmn)
BMI Banking Sector Methodology
- Commercial Bank Business Environment Rating
- Table: Commercial Banking Business Environment Indicators And Rationale
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Full Table of Contents is available at:
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.