Banks make high operating profit | daily-sun.com

Banks make high operating profit

    9 July, 2017 12:00 AM printer

Banks make high operating profit

The banking industry has seen high operating profit during the first half of the current year. Having been encountering many adverse impacts, the scheduled commercial banks made astounding operating profit.

Almost all the banks have been observed to gain high operating profit than that of the corresponding period last year. This time banks have got huge idle money for which they have to pay the interest to the customers but could not lend due to lack of good borrowers, and classified loan to which huge chunk of money is being separated from profit. As a result banks’ profitability has reduced.

 

At this moment two things have been ruining our banking industry, one, non-performing loans and second, excess liquidity which remains idle and cannot be utilised. Banks have diversified their products and are diverting their attention from archaic products to profit maximising product. Banks are giving other revenue generating services like credit card, SME and other funded and non-funded business which could have resulted in upbeat of operating profit. Last but not the least, some banks might have rescheduled in an unfairly manner and did not provision properly which could have upped operating profit. So banks have to be cautious about rise of non-performing loans and best use of unused fund; otherwise the banking sector may face negative impacts and its profitability will plummet.

 

Zonaed Emran, a banker


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