The number of loss-making bank branches in Bangladesh has risen sharply, reaching 1,680 in March 2025 — about 15 per cent of total branches — driven by soaring non-performing loans (NPLs) and unprecedented deposit withdrawals at some banks.
Bangladesh Bank data shows that 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.
Of total branches, 6,143 were located in urban areas and 5,015 in rural areas.
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.
Bankers said that mounting defaults are the main reason behind the deterioration.
BB data showed that the NPL figure has nearly doubled in a year, surging to Tk 4.20 lakh crore in March 2025 from Tk 1.82 lakh crore in March 2024.
The pace of deterioration has been alarming — NPLs stood at Tk 1.45 lakh crore in December 2023, jumped to Tk 2.11 lakh crore by June 2024, and further escalated to Tk 3.45 lakh crore in December 2024.
Economists 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.
Therefore, depositors rushed to withdraw funds—particularly in rural areas—placing severe stress on branch-level liquidity.
This combination of surging NPLs and heavy withdrawals rendered many branches financially unsustainable.
Private commercial banks have been the hardest hit.
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.
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.
Low deposit mobilisation, weak loan recovery, and structural inefficiencies continue to weigh on their profitability.
The shift in customer behaviour is compounding the challenge.
More people are using digital banking platforms to avoid visiting branches, while agent banking and mobile financial services have become more popular, offering greater convenience and coverage.
This has reduced foot traffic in physical branches, cutting into their revenue streams.
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.
