The retained earnings of Bangladesh’s banking sector have plunged into negative territory, exposing the depth of financial stress that has gripped the industry.
According to Bangladesh Bank data, the sector’s retained earnings dropped to Tk 7,421 crore negative by March 31, 2025 from Tk 1,722 crore positive in December 2024.
Out of 62 scheduled banks, 17 reported negative retained earnings, underlining the widespread nature of the crisis.
Retained earnings represent the cumulative profits that a bank retains after paying dividends to its shareholders. Rather than distributing all profits, banks typically retain a portion to strengthen their capital base, finance future growth, and build resilience against shocks.
Negative retained earnings, on the other hand, occur when cumulative losses exceed profits over time.
This situation weakens the bank’s capital base, erodes shareholder equity, limits the ability to declare dividends, and sends a strong signal of financial distress.
With nearly one-third of the banks now carrying negative retained earnings, the stability of Bangladesh’s financial system faces renewed strain.
The sharp deterioration in retained earnings reflects structural weaknesses, including persistent non-performing loans, inadequate provisioning, declining profitability, and the ongoing confidence crisis that has prompted deposit withdrawals.
Among individual banks, Bangladesh Krishi Bank recorded the steepest erosion, with negative retained earnings of Tk 17,926 crore as of March 31, 2025.
BASIC Bank followed with Tk 5,645 crore in negative retained earnings, while Padma Bank stood at Tk 5,225 crore, National Bank at Tk 4,891 crore, Global Islami Bank at Tk 3,630 crore, and Janata Bank at Tk 3,595 crore.
Other banks in negative territory included Rajshahi Krishi Bank with Tk 2,750 crore, ICB Islami Bank with Tk 2,080 crore, AB Bank with Tk 1,901 crore, Bangladesh Commerce Bank with Tk 1,618 crore, and First Security Islami Bank with Tk 1,027 crore.
Union Bank, Social Islami Bank, Shimanto Bank, IFIC Bank, and Agrani Bank also slipped into negative retained earnings during this period.
In contrast, several stronger private commercial banks managed to maintain healthy retained earnings.
BRAC Bank reported the highest figure with Tk 3,334 crore, followed by Dutch-Bangla Bank with Tk 3,167 crore, Pubali Bank with Tk 2,816 crore, City Bank with Tk 1,780 crore, Prime Bank with Tk 1,572 crore, and Eastern Bank with Tk 1,500 crore.
Foreign banks remained far more resilient, with six of them together holding Tk 22,483 crore in retained earnings.
Standard Chartered Bank alone accounted for Tk 11,198 crore, while HSBC followed with Tk 5,770 crore, highlighting the sharp contrast between foreign banks and many of their domestic counterparts.
Statutory reserves, another important capital buffer that banks are legally required to maintain, also declined.
The total statutory reserve of banks fell to Tk 39,632 crore in March 2025 from Tk 40,337 crore in December 2024.
Islami Bank held the highest statutory reserve at Tk 2,273 crore, followed by Sonali Bank at Tk 2,148 crore, National Bank at Tk 1,722 crore, Janata Bank at Tk 1,441 crore, BRAC Bank at Tk 1,384 crore, Eastern Bank at Tk 1,358 crore, City Bank at Tk 1,200 crore, and Pubali Bank at Tk 1,156 crore.
