Foreign banks’ net profit falls 38% in first half 2026

By the Editorial Team · Thursday, October 15, 2026

Foreign commercial banks in Bangladesh saw their net profits drop by 38% to Tk2,321 crore in the first half of 2026 due to slower trade activity and reduced income opportunities. Despite this decline, these banks maintained strong capital and liquidity positions and continued to play a vital role in supporting export and import transactions for multinational corporations.

Foreign commercial banks operating in Bangladesh experienced a significant decline in net profits during the first half of 2026, as trade activity slowed and income opportunities diminished. According to a recent Bangladesh Bank report, combined net profits for these institutions fell 38% to Tk2,321 crore, down from Tk3,738 crore in the preceding six months and Tk2,815 crore year-on-year in the first half of 2025.

The report highlights that the nine foreign commercial banks, which operate through 67 branches nationwide, maintained solid capital positions, ample liquidity, and relatively healthy asset quality despite the downturn. These banks represent a small portion of the overall banking sector’s deposits and loans but play a crucial role in facilitating trade finance, foreign exchange transactions, and services for multinational corporations.

Their combined pre-tax profit dropped 18.4% to Tk3,632 crore compared to the same period in 2025, and declined 17.3% from the previous half-year. Measures of financial performance such as returns on assets and equity also moderated during the period.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, attributed the sector’s struggles to a difficult economic environment marked by limited avenues for earnings growth. He noted that the banking sector is under stress with non-performing loans (NPLs) exceeding 30% for some institutions and distressed assets totaling over half their portfolios, which inevitably leads to losses. Rahman also pointed to higher global commodity prices that reduced import volumes while increasing foreign currency requirements for payments. Additionally, ongoing constraints in gas and electricity supplies disrupted production, impacting both imports and exports and consequently weighing on bank income.

Foreign commercial banks held deposits totaling Tk8,737.85 crore as of June 2026, accounting for approximately 4% of the total deposits in Bangladesh’s banking system. Unlike domestic lenders that serve a broad retail base, foreign banks concentrate heavily on corporate clients. Their deposits primarily consist of current accounts, savings accounts, and resident foreign currency accounts, contributing to relatively low funding costs.

Loan portfolios of foreign banks remained largely stable, increasing marginally by 0.7% to Tk48,704 crore over the past year. These banks also play a significant role in facilitating foreign trade: they processed $3.95 billion in export receipts during the first half of 2026, representing 18.6% of Bangladesh’s total exports, and handled $4.62 billion of import payments, slightly more than 13% of the country’s total imports.

The foreign banks’ NPL ratio rose modestly to 6.5% by June 2026, up from 6.1% a year earlier, but remained considerably lower than that of domestic banks. This relatively better asset quality is attributed to their focus on large corporate borrowers, subsidiaries of multinational companies, and export-oriented businesses with higher credit ratings.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.