State-owned companies listed on the stock market delivered mixed performances in the January-March quarter of the 2025-26 fiscal year, reflecting uneven sectoral health.

Quarterly public disclosures show energy firms, particularly oil marketing companies, remained profitable, while several entities in financial, gas and industrial sectors continued to incur losses, signalling structural weaknesses.

Oil firms maintain steady profits

The three listed oil marketing companies – Padma Oil Company, Meghna Petroleum and Jamuna Oil – remained profitable in the third quarter of the current fiscal year.

However, their revenues declined compared with the same period last year, reflecting weaker earnings from core operations. Non-operating income, however, played a significant role in sustaining overall profitability.

During the quarter, notable shifts were observed in cash positions and inventory management. Fluctuations in global fuel prices, import costs, stock management and cash flow dynamics were reflected in their financials.

Padma Oil posted a profit of Tk132.37 crore in the January-March quarter FY26, down from Tk145.38 crore in the same period in FY25. Its revenue fell to Tk85.43 crore from Tk92.30 crore.

Meghna Petroleum's profit dropped to Tk83.94 crore from Tk141 crore, while revenue declined to Tk22.95 crore from Tk28.02 crore.

The company said lower collections from customers and reduced payments to suppliers and employees significantly weakened cash flow from operations, leading to a sharp decline in net operating cash flow.

In contrast, Jamuna Oil recorded profit growth, earning Tk139.78 crore compared with Tk110.78 crore. However, its revenue declined to Tk52.12 crore from Tk70.41 crore.

The company in its disclosure said interest income on deposits with Sammilito Islami Bank was not recognised due to uncertainty over recovery. This reduced both total income and net profit, directly affecting earnings per share.

It added that a conservative accounting approach was adopted, excluding uncertain income, which resulted in lower reported EPS. The company also said reduced credit and accruals led to a decline in net operating cash flow per share compared with June 2025.

7 firms remain in red

The Investment Corporation of Bangladesh (ICB) continued to post heavy losses, reporting Tk277 crore in the quarter, up from Tk161 crore a year earlier. Notably, its revenue remained negative at Tk221 crore, compared with negative Tk63 crore in the same period last year.

Titas Gas Transmission and Distribution Company recorded a loss of Tk224 crore, slightly lower than Tk236 crore a year earlier. Its revenue declined to Tk8,613 crore from Tk9,023 crore.

Dhaka Electric Supply Company (Desco) managed to reduce its losses to Tk32 crore from Tk72 crore, while revenue edged up to Tk182.41 crore.

National Tubes Limited slipped into loss, posting Tk1.31 crore in losses against a profit of Tk1.43 crore a year earlier. Its revenue fell to Tk8.12 crore from Tk13.51 crore.

Eastern Cables Limited also remained in the red, reporting a loss of Tk3.45 crore, marginally lower than Tk3.58 crore a year earlier, although revenue rose slightly to Tk8.52 crore.

ICB's losses are seen as reflecting weak investor sentiment in the capital market. Meanwhile, continued losses at gas and power distribution firms also point to structural constraints, pricing issues and operational inefficiencies.

Signs of recovery in select firms

Power Grid Company of Bangladesh staged a strong turnaround, posting a profit of Tk94 crore, compared with a loss of Tk186 crore in the same period last year. Revenue rose to Tk715 crore.

The company said earnings per share increased by Tk6.58 year-on-year in the third quarter. It attributed the improvement to a significant rise in total income and a sharp reduction in overall expenses.

Bangladesh Submarine Cable Company Limited (BSCCL) also recorded robust growth, with profit rising to Tk74.43 crore from Tk47.82 crore a year earlier. Revenue increased to Tk125.31 crore.

The company said higher revenue from regular operations and increased other income drove the rise in earnings per share.

Eastern Lubricants Blenders Limited maintained its growth momentum, posting a profit of Tk4.28 crore, up from Tk1.57 crore a year earlier. Revenue climbed to Tk23.95 crore.

The improvement seen in companies such as Power Grid and BSCCL suggests that effective management, rising demand and supportive policies can enable state-owned enterprises to regain financial stability.

After the onset of the US-Israel war on Iran, some policymakers initially took a firm stance, publicly claiming credit for not adjusting fuel prices to shield consumers from global shocks. They argued that they did not want to pass the burden onto the people.

However, the government could not maintain its stance as it quickly unravelled under fiscal and market realities.

Within weeks, the government reversed course. It raised the price of a 12 kg liquefied petroleum gas (LPG) cylinder by 45 percent after two successive hikes in April.

On April 18, it also pushed fuel prices to record highs: diesel rose by Tk 15 per litre to Tk 115, octane by Tk 20 to Tk 140, petrol by Tk 19 to Tk 135, and kerosene by Tk 18 to Tk 130.

The scale and timing of these adjustments suggest that fiscal constraints, subsidy pressures, and external account vulnerabilities outweighed earlier political commitments.

From a macroeconomic perspective, such hikes drive costs and thus prices of commodities in the supply chain, as higher energy costs spread through transport, production, and supply chains, often creating second-round effects in import-dependent economies like Bangladesh.

A recent report on inflation dynamics of Bangladesh by the central bank showed gas price hikes have pushed up energy inflation to 14.9 percent during the January-March quarter of the current fiscal year 2025-26 from 14.4 percent in the previous quarter.

Economists say the effect of hiking petroleum prices is going to be felt soon, and consumers have already begun to feel the pinch. Transport costs for both passengers and freight have gone up. Farmers complained about the higher cost of harvesting rice and threshing the grains. Consumer goods companies are reducing pack sizes and squeezing margins to cope.

Yet, two ministers -- finance and commerce -- downplayed the inflationary risks.

According to a report published in this newspaper on April 20, Finance Minister Amir Khosru Mahmud Chowdhury said, “It may increase or it may not. If the supply side remains stable, then prices may not rise.”

In reply to a question in the parliament, Commerce Minister Khandakar Abdul Muktadir said it was unlikely that the recent fuel price hike would exacerbate inflation, terming the adjustment “moderate.”

He said the 15 percent increase in diesel prices may raise commodity prices by around Tk 0.30 per kg. However, he said this would not have any major impact on overall inflation, which has remained around 9 percent for more than three years, deepening consumers’ woes.

The wage rate index for unskilled workers illustrates this trend. Inflation has outpaced wage growth for 50 consecutive months, steadily eroding the purchasing power of consumers, particularly those in middle- and lower-income groups. It means that real wages have been in the negative for more than four years.

Consumers are set to face further pressure as the commerce ministry has allowed refiners to raise soybean oil prices by Tk 4 per litre, or 2 percent.

The situation worsened by earlier supply disruptions triggered by the Iran War, which had already pushed up global energy and transport costs. Diesel-dependent sectors such as agriculture, manufacturing, and transport are now under additional pressure, raising concerns that the increased costs will eventually be passed on to consumers in an already high-inflation economy.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the recent fuel price hike is likely to ripple across the economy through a “multiplier effect.”

He noted that fuel acts as a “barometer of commodity prices,” meaning its increase will inevitably influence a wide range of goods, though not uniformly.

He explained that the current situation reflects “cost-push inflation,” driven by rising input costs rather than demand.

However, he cautioned against overstating the scale of the impact, emphasising that the extent of price increases will depend on how significant fuel costs are within each product’s overall cost structure.

“If fuel accounts for a portion of total costs, a 15 percent increase in fuel prices does not translate into a 15 percent rise in final prices,” he said, illustrating that the actual effect would be proportionally smaller.

Rahman stressed that while some level of price increase is unavoidable, the degree to which it affects consumers will depend heavily on market behaviour and oversight.

“The pass-through to retail prices depends significantly on market management,” he said, warning that unchecked responses, such as transport operators raising fares disproportionately, could worsen inflationary pressures.

He also underscored the growing importance of regulatory monitoring, particularly in sectors with administered pricing, and highlighted the need for stronger safeguards for vulnerable groups.

“For low-income people, even a small increase in prices creates significant hardship,” he said, adding that effective implementation of social safety measures will be critical to easing the burden.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development, echoed similar concerns, warning that higher energy prices would inevitably feed into overall price levels.

“If energy and oil prices increase, our price levels will increase. This is almost inevitable,” he said. “There is a ‘one-to-one’ correspondence, as the transmission channel is very deep.”

He explained that a fuel price increase typically triggers broader inflationary pressures across the economy.

“When oil prices increase, we’ve seen a 15-20 percent increase across different varieties. It exerts pressure on other supply chain elements, which overall impacts our prices. They might be saying it for political reasons, but the economic reality is that this will fuel inflationary pressure further,” he added.

Razzaque also noted that the impact is more severe in Bangladesh compared to other countries due to already elevated inflation.

“It’s not just happening in Bangladesh; many countries have already increased their fuel prices. The problem for Bangladesh is that our baseline inflation rate was already high, hovering around 9 to 10 percent. When this impact is added, it creates even more pressure. In countries like Cambodia, where inflation was lower, it was easier to absorb. But for us, it’s almost inevitable that prices will go up,” he said.

He also raised concerns over inflation measurement, especially LPG pricing. He said the Bangladesh Bureau of Statistics (BBS) relies on government-set rates, which may not reflect market reality.

Razzaque added that official figures could be misleading if based on listed prices rather than what consumers actually pay, urging surveys of real market prices for more accurate inflation data.

Paramount Textile, a listed company on the bourses, reported a year-on-year revenue decline of more than 15% in the first nine months of the current fiscal year, according to its consolidated quarterly financial statements.

Despite a nosedive in revenue, the company posted a slight increase in profit to Tk96.81 crore, compared with Tk96.41 crore in the same period last fiscal year. However, earnings per share (EPS) slightly dipped to Tk5.14 from Tk5.22.

The company said its operating profit fell 14% amid the revenue contraction. Still, higher income from other sources and gains from associate companies helped offset the decline, enabling Paramount Textile to register a modest profit growth during the July–March period.

Its report showed that its profit from associates companies surged 250% to Tk36 crore while its other income jumped by 631% to Tk10.81 crore.

It has investment in associates' companies—Paramount BTrac Energy Ltd, a 200 MW HSD power plant and Dynamic sun energy Pvt Ltd, a joint venture company between Paramount Textile Ltd and Global energy project holdings (GEPH).

According to its financial report, in the third quarter during the January to March, its revenue fell by 30% to Tk245.71 crore, a lower from Tk354.01 crore in the same time of the previous fiscal year.

Despite 25% declining in its operating profit, net profit surged 6% to Tk52.65 crore mainly due to increase in share of profit of associates companies.

In the three months, it earned Tk15.79 crore from its associates.

In FY25, Parmount Textile made a profit of Tk116.06 crore with an EPS of TK6.48. It had paid a 12% cash dividend for its shareholders.

Paramount Textile's shares closed at Tk61.60 each today (4 May) at the Dhaka Stock Exchange (DSE), a 2.38% down from the previous trading session.

Bangladesh’s total public debt burden has crossed Tk 22 lakh crore by December 2025 with a growing reliance on domestic sources as the government looks to “insulate the economy from foreign currency risks”.

Of the total debt, Tk 3 lakh crore was borrowed during the interim government period, according to the finance ministry’s latest quarterly bulletin.

The bulletin states the public debt stood at Tk 18.9 lakh crore at the end of June 2024, just a month before the interim administration assumed power. The figure was Tk 13.44 lakh crore at the end of June 2022.

During the interim period, domestic debt rose by Tk 1.70 lakh crore, reaching Tk 12.5 lakh crore by December. Foreign loans increased by Tk 1.47 lakh crore to Tk 9.59 lakh crore in the same period.

Domestic borrowing dominates the government’s overall debt portfolio. As of December 31, 2025, the domestic and external liabilities constituted 57 percent and 43 percent of the total government debt stock, respectively.

“By focusing on the local market, the government is deepening domestic liquidity while reducing its exposure to exchange rate fluctuations,” said the bulletin.

During the July-December period of the current fiscal year, the government’s total borrowing rose by Tk 62,428 crore, or 13 percent, compared to the same period a year earlier.

During the period, loans from the foreign sector dropped by 59 percent to Tk 10,130 crore, while domestic borrowing surged 70 percent to Tk 52,298 crore.

Of the domestic borrowing, Tk 19,470 crore was borrowed from the central bank alone.

Most of the domestic loans were raised through government securities. “A key feature of the government’s approach was a clear shift toward long-term debt,” the finance ministry said.

Meanwhile, total interest payment during the July-December period rose by 22 percent to Tk 71,253 crore. Of these, interest payment for domestic borrowing stood at Tk 61,866 crore, a 25 percent surge from the same period a year ago.

While increased domestic borrowing often raises concerns about “crowding out,” the current landscape suggests a unique window of opportunity, said the ministry.

It argued that ample liquidity in stronger banks, falling yields on government securities, and subdued private-sector credit demand create conditions for sustainable domestic financing without crowding out private borrowers.

By leveraging this internal liquidity, the state is building a more resilient and self-reliant fiscal framework that maintains stability without straining the private credit market, it added.

The country's premier bourse returned to positive territory today as a wave of bargain hunting helped the benchmark index snap a two-session losing streak, although overall market capitalisation fell by Tk5,000 crore.

Despite lingering concerns over global geopolitical dynamics and domestic economic factors, opportunistic investors moved in to accumulate beaten-down scrips, particularly in the banking and manufacturing sectors.

The benchmark DSEX index of the Dhaka Stock Exchange rose by 12 points to settle at 5,277, while the blue-chip DS30 index followed suit, gaining 4 points to close at 2,023.

Market participation showed signs of improvement as total turnover at the DSE climbed by 6% to reach Tk877 crore compared to the previous session.

According to the daily market review by EBL Securities, the capital bourse staged a modest rebound supported by resilient investor participation. The market opened on a firm note with steady accumulation through the mid-session.

However, the upward momentum was somewhat tempered toward the end of the day as cautious selling from some quarters trimmed intraday gains.

Interestingly, while the key indices rose, the overall market capitalisation at the DSE dropped by Tk5,000 crore to settle at Tk6.81 lakh crore, a phenomenon largely attributed to the price adjustment of high-cap stocks.

On the sectoral front, the banking sector dominated market activity, accounting for 19.1% of the total turnover. This was followed by the engineering and pharmaceutical sectors, which contributed 12.5% and 12.4% to the day's volume, respectively.

In terms of returns, the ceramic sector led the gainers with a 3.1% increase, followed by jute at 2.9% and information technology at 1.5%. On the downside, the general insurance, mutual fund, and food sectors faced corrections, with general insurance declining by 1.0%.

The market breadth remained slightly in favour of the bulls, as 174 issues advanced compared to 159 that declined, while 63 remained unchanged.

Individual stock performance was highlighted by JMI Syringe and JMI Hospital, both of which surged by nearly 10% to lead the gainers' list.

On the other hand, City Bank emerged as the top loser of the day, shedding 13.33% of its value.

However, market analysts noted that this sharp decline was due to the technical adjustment of its share price following the record date for its 15% stock dividend declaration for the year 2025.

The positive sentiment was partially mirrored at the Chittagong Stock Exchange (CSE), where the CSCX index ended 6 points higher at 9,093. However, the CASPI edged down by 4 points to settle at 14,783.

Trading activity at the port city bourse saw a significant contraction, with turnover plunging by 59% to stand at a modest Tk16.77 crore.

Oil prices edged higher on Monday, supported by the absence of a US-Iran peace deal that kept supplies constrained and prices above $100 a barrel.

Brent crude futures were up 67 cents, or 0.6%, to $108.84 a barrel at 0400 GMT after settling down $2.23 on Friday. US West Texas Intermediate was up 65 cents, also 0.6%, at $102.59 a barrel, after a $3.13 loss on Friday.

"The broader market remains tightly supported by persistent supply disruptions and geopolitical uncertainty," said Priyanka Sachdeva, analyst at Phillip Nova.

"Unless there is a clear and sustained resolution that restores normal flows through the Strait of Hormuz, oil prices are likely to remain elevated, with risks still tilted toward further upside."

President Donald Trump said the US would begin efforts to assist ships stranded in the Strait of Hormuz, but prices stayed above $100 a barrel, with no peace deal in sight and shipping through the strategic waterway still constrained.

Negotiations between the US and Iran continued over the weekend, with both sides assessing each other's responses.

Trump has made securing a nuclear deal with Tehran a priority, but Iran wants to defer nuclear talks until after the war and first lift rival blockades on Gulf shipping.

On Sunday, the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, said it would raise oil output targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.

The rise matches that agreed for May, minus the share of the United Arab Emirates, which left OPEC on May 1. However, the additional barrels are expected to remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.

Mobile operators have called on the National Board of Revenue (NBR) to withdraw value-added tax (VAT) on spectrum and spectrum-related fees, arguing the levy contradicts global norms and undermines investment in the sector.

In a recent letter sent to the NBR chairman, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) described the proposed withdrawal as a vital step to rectify a fundamental misalignment in Bangladesh’s VAT regime.

The association said radio spectrum, the finite range of frequencies over which all wireless communication travels, is an intangible national resource administered by the Bangladesh Telecommunication Regulatory Commission (BTRC).

“Its [radio spectrum] assignment, renewal, and usage confer a sovereign regulatory right -- not a commercial supply of goods or services under any legal interpretation,” wrote Mohammad Zulfikar, the association’s secretary general.

Hence, imposing VAT on spectrum and spectrum fees, AMTOB argued, effectively turns a regulatory charge into a taxable transaction.

“Imposing VAT here transforms a non-commercial regulatory grant into an artificial taxable event,” it added.

According to the letter, telecom companies are required to pay VAT on spectrum fees without being able to claim input tax credits, increasing operational costs.

It said the BTRC’s lack of VAT registration prevents it from issuing standard invoices. “This renders the VAT non-creditable and traps it as a pure cost to the operators.”

AMTOB warned that the arrangement stifles network investment, 5G rollout, and rural coverage expansion.

It cited frameworks in the European Union, India, the United Kingdom, and Australia, where spectrum charges are treated as sovereign regulatory fees outside the VAT net.

“Bangladesh’s current approach deviates from this consensus, creating indefensible inefficiencies,” the letter said.

The association noted that the sector already carries a heavy tax burden -- corporate income tax, BTRC revenue sharing, spectrum and licence fees, and VAT on services.

“In 2024, we contributed approximately Tk 22,000 crore,” the letter noted, warning that additional non-creditable taxes could affect affordability and innovation in the sector.

In the letter, AMTOB placed two demands before the tax authority: the immediate withdrawal of VAT on spectrum-related payments, and formal clarification categorising these charges as sovereign regulatory fees outside the VAT net.

Shahed Alam, chief corporate and regulatory officer at Robi Axiata, said, “Treating spectrum fees as VAT-exempt regulatory charges, in alignment with global best practices, would restore tax neutrality, reduce financial pressure, and improve cost efficiency.”

An internal Bangladesh Bank (BB) document has revealed significant exposure of the country’s banking sector to high-risk of defaulted loans linked to six major business conglomerates.
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The confidential analysis highlights widespread vulnerabilities across multiple banks, raising concerns over asset quality and risk management in the financial sector.

The document, titled “Selected Lead Banks, Impacted by Six Groups”, categorises affected financial institutions based on their exposure to non-performing loans associated with six business groups. The groups or individuals identified are: Saifuzzaman Chowdhury, S Alam, Beximco, Sikdar, Nassa and Orion.

According to the data, Islami Bank Bangladesh PLC appears in five of the six exposure categories, indicating extensive involvement across multiple high-risk loan portfolios. Newly consolidated Sammilito Islami Bank PLC is listed under all six groups, suggesting that its balance sheet carries significant inherited non-performing assets from merged weak banks.

Other banks appearing frequently across the exposure lists include First Security Islami Bank, Social Islami Bank, Union Bank, Janata Bank, Rupali Bank, IFIC Bank, United Commercial Bank, AB Bank and Al-Arafah Islami Bank.

State-owned banks such as Sonali Bank and Agrani Bank are also shown to have notable exposure to defaulted loans linked to the identified groups.

In response to the rising systemic risk, Bangladesh Bank has initiated steps to assign selected institutions as “lead banks” to coordinate recovery efforts in collaboration with international firms.

The criteria for selecting lead banks reportedly prioritise institutions with prior experience in handling international non-disclosure agreements (NDAs), enabling them to manage complex negotiations and recovery processes.

The designated lead banks for each group are as follows:

Saifuzzaman Chowdhury group: United Commercial Bank PLC (lead), Islami Bank Bangladesh PLC, Al-Arafah Islami Bank PLC

S Alam group: Islami Bank Bangladesh PLC (lead), Janata Bank PLC, Sammilito Islami Bank PLC.

Beximco group: National Bank PLC (lead), Janata Bank PLC.

Sikdar group: IFIC Bank PLC (lead), Sammilito Islami Bank PLC, Agrani Bank PLC.

Nassa group: National Bank PLC (lead), IFIC Bank PLC, Al-Arafah Islami Bank PLC.

Orion group: United Commercial Bank PLC (lead), Agrani Bank PLC.

The document also states that banks undergoing or scheduled for merger will not be eligible to act as lead banks, reflecting ongoing policy considerations within Bangladesh Bank.

Officials said the move indicates a shift towards a more coordinated and externally supported recovery strategy aimed at addressing long-standing default loan problems in the banking sector.

Reckitt Benckiser Bangladesh, a listed multinational on the bourses, reported a 9.99% year-on-year decline in revenue and a 28.31% drop in net profit after tax in the first quarter of 2026.

During the January to March quarter, its revenue declined to Tk132.61 crore, a lower from Tk147.34 crore, while its profit declined to Tk10.99 crore, a lower from Tk15.33 crore in the same time of the previous year, its report showed.

At the end of March 2026, its earnings per share (EPS) declined to Tk23.26, which was Tk32.45 in the same time of the previous year.

The quarterly financials published today (3 May) on the stock exchanges. Following the financials results, the company's shares fell 2.69% or Tk93.4 each closed at Tk3,377 each at the Dhaka Stock Exchange (DSE).

In 2025, Reckitt Benckiser reported a profit of Tk81.71 crore with an EPS of Tk172.93, which was Tk75.20 crore and EPS of Tk159.17 in 2024, its data showed.

Based on its financials, its board recommended a 1,730% final cash dividend meaning that Tk173 against each shares.

To approve its financials and dividend by the general shareholders, the MNC scheduled its annual report on 29 June thorough the digital platform.

Reckitt Benckiser had paid a record-high 3,330% cash dividend for 2024 to its shareholders.

Reckitt Benckiser (Bangladesh) PLC is a subsidiary of the UK-based Reckitt Benckiser Group plc. It is a well-known manufacturer of health, hygiene, and home products, with several leading brands in Bangladesh.

The company manufactures and marketed of households (hygiene), toiletries and pharmaceutical (health) product.

Reckitt Benckiser is a well-known and trusted company in Bangladesh's FMCG sector. It offers a wide range of products, including Dettol, Harpic, Lizol, Trix, Mr Brasso, and Veet.

As of March this year, out of its total shares, sponsor-directors held 82.96%, government 3.77%, institutional shareholders 6.80%, foreign 0.01% and general public held 6.46%.

Most listed drug manufacturers in Bangladesh posted double-digit year-on-year profit growth in the first nine months through March, supported by rising demand, efficient cost management, and a stable forex market. Bangladeshmarket report
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Market analysts attributed the growth to higher sales volumes, improved operational efficiency, and sustained demand for medicines both domestically and in export markets.

The sector's performance stands out at a time when many other industries-including multinational companies-are grappling with elevated operating costs amid persistent inflationary pressure.

"Sales of lifesaving drugs increased due to strong local demand, while leading companies successfully managed to keep operating costs lower," Salim Afzal Shawon, head of research at BRAC EPL Stockbrokerage, told The Financial Express over the phone.

The growing population, coupled with rising awareness of healthcare needs, has amplified demand for generic medicines in the local market, particularly for chronic diseases.

The aftermath of the Covid-19 pandemic has further underscored the importance of healthcare, leading to a heightened focus on medical preparedness and infrastructure, which in turn has positively impacted the pharmaceutical industry.

"People now prioritise healthcare spending more than before, which is contributing to higher sales and profitability," said Mr Shawon. Marketupdate service

This resilience allows leading pharmaceutical companies to sustain strong revenue and profit growth, he added.

Combined profits of eight major drug manufacturers rose nearly 14 per cent year-on-year to Tk 27.22 billion during July-March of FY26. Over the same period, total sales increased 13 per cent year-on-year to Tk 155 billion.

Among the eight, Techno Drugs and Silco Pharma saw their profits decline, mainly due to lower sales and higher finance costs.

Silco Pharma's profit fell 19 per cent year-on-year in the nine months through March, as its finance costs more than doubled to Tk 170 million due to increased borrowing.

Techno Drugs' profit also dropped 16 per cent due to lower sales and higher tax expenses. Its sales declined 10 per cent year-on-year, while tax expenses surged 19 per cent during July-March FY26 compared to the same period a year earlier.

Beximco Pharma and Navana Pharma have yet to publish their third-quarter financial results. Financialdata analytics

Overall, the pharmaceutical sector has remained resilient despite broader economic challenges such as inflationary pressure and rising production costs.

Square Pharma, the country's largest drug maker, posted a 10 per cent year-on-year increase in profit to Tk 20.64 billion for the nine months through March. Revenue rose 12.5 per cent to Tk 65.08 billion.

The company attributed the sustained growth to several factors, including rising domestic demand for healthcare products, export earnings, and income from subsidiaries.

Square Pharma's local sales grew by more than 9 per cent, while revenue from its Kenya subsidiary rose 4.5 per cent year-on-year during the period.

The company also reduced its finance costs by 55 per cent, supported by the partial repayment of long-term loans.

"The drug maker continues to grow in both sales and profit owing to strong consumer trust in its products," said Akramul Alam, head of research at Royal Capital.

He highlighted Square Pharma's competitive edge in producing high-quality generic medicines at relatively low costs, supporting its long-term growth trajectory. Globalmarket forecast

Another leading drug manufacturer, Renata, posted 28 per cent year-on-year profit growth in the first nine months through March, driven by strong operating profit and reduced finance costs following a capital restructuring initiative.

"Profitability improved on the back of better gross margins, efficient procurement, and tight control over expenses, including lower financing costs through major capital restructuring," said the company.

"We successfully lowered finance costs by deploying the proceeds from preference share issuance to retire high-cost debts, a move that has structurally reduced our interest burden going forward," Mustafa Alim Aolad, chief financial officer of Renata, told The Financial Express over the phone recently.

Renata's domestic sales, which account for almost 74 per cent of total revenue, grew by more than 10 per cent, while export revenue rose 5 per cent, aided by a wave of international regulatory approvals.

Beacon Pharmaceuticals recorded the highest profit growth among its peers, registering a 59 per cent year-on-year increase. The growth was driven by higher sales, lower input costs, efficient production planning, and prudent financial management, the company said.

IBN Sina Pharmaceutical Industry also posted strong results, with profit rising 33 per cent and sales increasing 18 per cent, backed by solid operational performance.

Meanwhile, although Advanced Chemical Industries (ACI) remained in the red, its pharmaceutical segment posted 21 per cent year-on-year sales growth during the period under review. Its consolidated losses shrank to Tk 71 million in July-March of FY26, one-eleventh of the losses recorded during the same period of the previous year.

Bangladesh's pharmaceutical industry, which meets 98 per cent of local demand, remains one of the country's success stories, having recorded remarkable growth in recent years. Bangladeshmarket report

Export performance has also remained steady. Pharmaceutical exports reached $170.67 million in the first nine months of FY26, marking growth of more than 3 per cent, driven largely by demand from Asian markets such as Sri Lanka and Myanmar.

Mr Alam said that with continued investment, regulatory compliance, and a growing skilled workforce, the local pharmaceutical sector is poised not only to sustain but also to accelerate export growth in the coming years.

The Bangladesh Investment Development Authority (Bida) has recently submitted 20 deregulation proposals to the finance ministry, aiming to significantly ease doing business without reducing tax rates.

The proposals, developed through a series of consultations with business leaders, focus on removing procedural bottlenecks, reducing compliance costs, and improving predictability in regulatory processes, Bida officials told The Business Standard.

Business representatives believe that if implemented, the measures would lower operational expenses, save time, and boost investor confidence.

Push for risk-based audit system

A key recommendation is the introduction of a risk-based audit system to replace the current practice of selecting firms for audit without clear criteria.

At present, companies are often subjected to repeated audits immediately after submitting their audited financial statements, leading to complaints of unnecessary harassment.

Under the proposed system, the National Board of Revenue would use predefined risk parameters – such as abnormal fluctuations in turnover, inconsistencies in input-output ratios, and repeated refund claims – to automatically identify firms with a higher likelihood of tax evasion.

This "automated audit selection" process would allow authorities to focus enforcement on high-risk cases while reducing pressure on compliant taxpayers.

Reducing reliance on LCs, promoting digital trade

The report suggests reducing dependence on traditional Letters of Credit (LCs) by introducing alternative digital payment and settlement methods. Such reforms could make international trade faster and more cost-effective.

Customs reforms and global benchmarking

Bida has also recommended improving transparency in customs valuation by integrating international price databases alongside domestic references.

To illustrate best practices, the proposals cite VNACCS – Vietnam's automated cargo clearance system – which uses real-time data and reference pricing. Under that model, goods declared within an acceptable price range are cleared automatically through a "green channel," significantly reducing delays.

Adopting similar mechanisms could streamline Bangladesh's customs procedures, cut bureaucratic complexity, and shorten clearance times, according to the proposals.

24/7 port operations to cut logistics costs

Business leaders identified limited port operating hours as a major constraint. Despite growing trade volumes, full-scale 24/7 operations are not consistently available due to restrictions in banking and customs services.

Bida has recommended round-the-clock port operations, which could help reduce congestion and lower logistics costs.

In addition, the proposals suggest allowing up to 80% of import clearance through off-dock facilities in phases, supported by regular audits and risk-based monitoring to ensure compliance.

Concerns over indiscriminate audit, AIT

Speaking to TBS, Business Initiative Leading Development Chairperson Abul Kasem Khan said even long-compliant taxpayers frequently face repeated audits, creating uncertainty and discouragement.

"We have seen cases where companies with a strong compliance record and even recognition as top taxpayers are repeatedly audited. This undermines confidence," he said.

Kasem, who was a former president of the Dhaka Chamber of Commerce and Industry, also highlighted concerns over Advance Income Tax (AIT), noting that in many cases businesses pay more tax than their actual liability, with refunds delayed.

"As a result, the effective tax rate can rise to 40-50%, putting pressure on working capital," he said, adding that excess payments should either be refunded quickly or adjusted against future tax liabilities.

NBR signals support for easing compliance

Addressing a consultative committee meeting organised by the NBR and the FBCCI last week in Dhaka, Finance Minister Amir Khosru Mahmud Chowdhury, said the government is committed to dismantling the existing regulatory barriers to doing business.

NBR Chairman Abdur Rahman Khan recently said the government is focusing not only on tax rates but also on simplifying business processes.

"Our priority is to reduce unnecessary complexities and make compliance easier so that businesses can operate more efficiently," he said at a pre-budget discussion.

The Dhaka Stock Exchange (DSE) witnessed a significant retreat today (3 May) as a massive sell-off in the banking sector, triggered by the formal downgrade of ten more lenders to the "Z" category, dragged down the benchmark index.

The premier bourse felt the immediate impact of investor panic as nearly 42% of the country's listed banking sector shifted into the "junk" stock segment, a move that severely eroded market sentiment and tightened liquidity across the floor.

The benchmark DSEX index plunged by 21 points, or 0.40%, to settle the session at 5,265. While the blue-chip DS30 index managed to edge up by a marginal 0.09% to reach 2,018, the broader market breadth remained negative. Out of the 396 issues traded, 180 declined, 165 advanced, and 51 remained unchanged.

Market participation also saw a slight contraction, with daily turnover edging down by 4% to Tk829 crore compared to the previous session.

The day's downturn was almost entirely dictated by the banking sector. Market sources confirmed that ten banks – AB Bank, Al-Arafah Islami Bank, IFIC Bank, Mercantile Bank, NRB Bank, NRBC Bank, One Bank, Premier Bank, Rupali Bank, and United Commercial Bank – were moved to the "Z" category on Sunday.

This followed their failure to declare any dividends for two consecutive years, a direct consequence of persistent financial irregularities and mounting bad loans. This latest wave of downgrades follows a similar move on 30 April, when Islami Bank, Standard Bank, and SBAC Bank were also pushed into the junk category for the same reasons.

Among the newly downgraded entities, Mercantile Bank suffered the most brutal correction, with its share price crashing by 18.18% to close at Tk7.20. AB Bank followed with an 11.32% decline, ending the day at Tk4.70.

Other notable losers included Premier Bank, which shed 8.89% to settle at Tk4.10, and IFIC Bank, which dropped 6.12% to close at Tk4.60. Al-Arafah Islami Bank, NRB Bank, and One Bank also saw their share values erode by more than 4% each. Even the state-owned Rupali Bank recorded a 2.91% price fall.

Consequences of Z category

Analysts said the primary reason behind this unprecedented sector-wide dividend drought is a massive provision shortfall against classified loans and investments. Under Bangladesh Bank regulations, lenders suffering from provision deficits are strictly prohibited from declaring dividends.

To maintain a semblance of regulatory compliance and prepare audit reports, several of these banks have reportedly availed deferral facilities from the central bank. While this allows them to postpone their immediate financial obligations, it does nothing to improve their actual profitability or their ability to reward shareholders, effectively trapping them in the junk category.

The transition to the "Z" category carries severe operational and psychological consequences for a listed firm. These stocks are widely perceived as high-risk assets due to their weak financial health and lack of corporate governance, analysts added.

Furthermore, trading rules for junk stocks are significantly more restrictive. Unlike "A" and "B" category stocks, which follow a T+2 settlement cycle, "Z" category transactions are settled on a T+3 basis.

Additionally, these shares are ineligible for margin loans and are restricted to cash-only transactions. These barriers often lead to a sharp decline in trading volume and liquidity, making it difficult for investors to exit their positions.

With 15 out of the 36 listed banks now trading in the "Z" category, the systemic health of the banking sector has become a major concern for the capital market.

Few outliers

Among the affected lenders, only a few managed to resist the downward trend today. The share prices of UCB and Standard Bank remained unchanged, while NRBC Bank emerged as the sole outlier in the sector, managing to post price appreciation despite the broader sell-off.

The banking rout mirrored the performance of the Chittagong Stock Exchange as well. The CSCX index ended 7 points lower at 9,086, while the CASPI shed 17 points to close at 14,788. Turnover at the port city bourse saw a more pronounced decline of 14%, settling at Tk41.35 crore.

Major index draggers for the day included Mercantile Bank, Shahjalal Islami Bank, Trust Bank, NCC Bank, and Al-Arafah Islami Bank.

NBFIs gain traction

Interestingly, while established banks faced a rout, the gainers' list today was dominated by non-bank financial institutions (NBFIs), many of which are themselves grappling with high non-performing loans and governance crises.

Speculative trading appeared to drive these stocks higher, with Fareast Finance and Bangladesh Industrial Finance Company (BIFC) both hitting the 10% upper limit. Other gainers included International Leasing, Premier Leasing, FAS Finance, and Peoples Leasing.

Market observers described this as a classic case of speculative 'junk-hunting' where investors shift capital into low-priced, volatile stocks following a crash in more fundamental sectors like banking.

Bangladesh needs a decisive push to mobilise revenue by immediately launching reform measures, accelerating automation, and gradually phasing out existing tax exemptions, said economists and policymakers at an event organised by the National Citizen Party (NCP) yesterday.

The national convention on energy, economy, human rights, reform and referendum was held at the Institution of Diploma Engineers in Dhaka.

“Many discussions were held and numerous committees formed, but we saw no meaningful progress in the revenue sector,” said M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh.

“No reforms took place during the Awami League era, and unfortunately, the interim government also failed to act. A new government is now in place and may need time, but if reforms are not launched within the next two to three months, we risk losing this opportunity again,” he added.

Reaz described the country’s economic challenges as a “four-plus-one dimension”-- four domestic weaknesses alongside one global factor.

He said the country’s key drivers of employment and growth have stalled, while economic governance had largely collapsed before August 5, marked by banking irregularities, oligarchic control in energy, and mismanagement of public spending.

He also pointed to the absence of revenue reform, failure to formalise the informal economy, and rising dependence on external debt as major concerns.

At the event, Hasnat Abdullah, lawmaker and chief organiser (Southern Region) of the NCP, said that automating tax and customs systems through cashless, paperless processes integrated with NID is now essential.

He noted that complexities in the current manual tax system discourage compliance.

“If we automate the system and integrate it with NID, under-the-table compromises can be reduced to near zero. Many European countries have been practising this for years,” he said.

AKM Waresul Karim, dean of the School of Business and Economics at North South University, said governance failures have driven stagnation in the banking sector.

“Corruption, nepotism, politicisation, and prolonged authoritarian practices have undermined institutional integrity,” he said.

Confidence in state-owned commercial banks has eroded, he noted. Citing a review of Janata Bank, he said 70 percent of its loans are non-performing. Following recent political upheaval, the boards of a number of banks were reconstituted, and a Bank Resolution Ordinance was introduced, merging five banks.

However, he criticised the provision allowing previous bank owners to reclaim ownership by repaying only 7.5 percent of government liquidity support, calling it a tactic to restore control to specific individuals.

AKM Fahim Mashroor, CEO of Bdjobs, said overall unemployment in Bangladesh remains below 4 to 5 percent, but youth unemployment is three to four times higher. Each year, about 700,000 graduates enter the job market, of whom 50 to 60 percent remain jobless.

“Unemployment is not just an economic issue-- it is a social and political one,” he said, adding that high interest rates and energy constraints may deter investment in the near term.

He suggested promoting entrepreneurship and facilitating overseas employment through government-backed loans.

Sarjis Alam, chief organiser (Northern Region) of the NCP, chaired the first panel discussion. Shams Mahmud, former president of the Dhaka Chamber of Commerce, Chartered Financial Analyst Asif Khan, and Javed Rasin, joint convener of the NCP, also spoke at the event.

The price of a 12kg cylinder of liquefied petroleum gas (LPG) remains unchanged at Tk 1,940 for May.Business Policy Updates
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The Bangladesh Energy Regulatory Commission (BERC) announced the decision on Sunday, which would take effect from 6 pm. Bangladeshmarket report

The LPG prices were adjusted twice last month.

On April 2, the price of the 12kg cylinder was raised by Tk 387 to Tk 1,728. Later, on April 19, BERC hiked the price by Tk 212, setting it at Tk 1,940.

The private sector can sell LPG in various cylinder sizes-5.5kg, 12.5kg, 15kg, 16kg, 18kg, 20kg, 22kg, 25kg, 30kg, 35kg and 45kg-to consumers at proportional price in May.

The price of LPG supplied through a reticulated system or centralised storage system also remains unchanged at Tk 351 per cubic metre for May.

Meanwhile, the consumer-level price of autogas has been slightly increased by 2 paisa for May, setting the new price at Tk 89.52 per liter, including value added tax (VAT).

Autogas prices were also adjusted twice last month.

On April 2, the price was raised by Tk 17.94 to Tk 79.77 per liter. On April 19, BERC increased the price by Tk 9.73, fixing it at Tk 89.50 per liter.

Bashundhara Paper Mills, a concern of Bashundhara Group, has incurred a loss of Tk422 crore in the first nine months of the current fiscal year, mainly due to a shortage of raw materials and a rise in utility costs.

During the July-March period of FY26, the company's loss widened significantly from Tk184 crore in the same period a year earlier, according to its financial statement ended in March.

Its year-on-year revenue also plunged by 56% to Tk223.22 crore, down from Tk507.67 crore in the corresponding period of the previous fiscal year.

Despite the sharp decline in revenue, the cost of sales stood at Tk420.59 crore at the end of March 2026, compared to Tk482.11 crore in the same period a year ago.

The company reported an operating loss of Tk523.43 crore, up from Tk230 crore in the July-March period of the previous fiscal year.

Explaining the losses, company officials said operating profitability declined due to the unavailability of raw materials, increased utility costs, a sharp rise in input prices, and higher borrowing costs following interest rate hikes.

As a result, the company's earnings per share (EPS) deteriorated significantly, with per-share loss rising to Tk24.27 from Tk10.60 in the previous period.

However, net operating cash flow per share rose slightly to Tk8.95 during the July-March period of FY26, compared to Tk8.75 in the same period a year earlier. The net asset value per share declined to Tk33.60 as of 31 March.

The company said the improvement in cash flow was mainly due to reduced payments to suppliers and other operating creditors, which strengthened its overall operating cash position.

In FY25, Bashundhara Paper Mills incurred a loss of Tk329.91 crore, with a per-share loss of Tk18.98. Due to continued losses, the company did not declare any dividend for its shareholders for FY24.

The company's shares closed on Sunday at Tk26.30 on the Dhaka Stock Exchange, down 1.87% from the previous trading session.

The Cabinet has approved a set of tax measures for the import of completely new electric vehicles, including buses and trucks.

The decision was taken at a Cabinet meeting - chaired by Prime Minister Tarique Rahman - held in the Cabinet Room of the National Parliament at 6:45pm on Sunday (3 May), according to a statement from the Cabinet Division.

Under the decision, a notification will be issued to maintain the Value Added Tax (VAT) at 15% for electric buses with a minimum of 17 seats, for use in sectors other than student transportation.

At the same time, these imports will be exempted from customs duty (CD), regulatory duty (RD), supplementary duty (SD), advance tax (AT) and advance income tax (AIT), subject to certain conditions.

According to Cabinet Division sources, the National Board of Revenue will soon issue a notification in this regard. The facility will remain in effect till 30 June 2026 - i.e. the end of the current fiscal year of 2025-26.

It follows an earlier decision to allow the duty-free import of electric buses for educational institutions to promote safe and environmentally friendly transportation for students.

A similar notification will also be issued for the import of trucks with a capacity of five tonnes or more, the statement added.

The initiative was proposed by the Internal Resources Division, the statement said.

The United Arab Emirates has left the Organization of Arab Petroleum Exporting Countries (OAPEC), an alliance that does not set production policies for its members, a statement from the intergovernmental organisation showed on Sunday.

The statement follows UAE's surprise announcement on 28 April of its departure from the OPEC and OPEC+ producer groups, to prioritise boosting its own output.

OAPEC was formed in 1968 with the aim of boosting cooperation among Arab oil exporters.

The Asian Development Bank (ADB) will back $70 billion in new energy and digital infrastructure initiatives by 2035, aiming to connect power grids, expand cross-border electricity trade, and improve broadband access across Asia and the Pacific.

The Pan-Asia Power Grid Initiative will connect national and subregional power systems so renewable energy can flow across borders, while the Asia-Pacific Digital Highway will help close the digital infrastructure gap and enable the region to benefit from AI-driven growth, reads a press release.

Under the Pan-Asia Power Grid Initiative, ADB will work with governments, utilities, the private sector, and development partners to mobilise $50 billion by 2035 for cross-border power infrastructure that can unlock renewable energy at scale.

The initiative will focus on transmission and grid integration, including cross-border lines, substations, storage, and grid digitalisation.

It will also support power generation linked to electricity trade, including renewable energy export projects, regional renewable hubs, and hybrid generation-storage facilities.

By 2035, ADB aims to integrate about 20 gigawatts of renewable energy across borders, connect 22,000 circuit-kilometers of transmission lines, improve energy access for 200 million people, create 840,000 jobs, and cut regional power sector emissions by 15%.

ADB expects to finance about half of the $50 billion initiative from its own resources and raise the rest through cofinancing, including from the private sector.

Up to $10 million in technical assistance will support efforts to align regulations, adopt common technical standards, prepare feasibility studies and advance other work needed for major projects.

The Pan-Asia Power Grid Initiative marks a shift from country-to-country energy links to a regional approach to power trade.

It builds on existing subregional cooperation initiatives, including the South Asia Subregional Economic Cooperation program, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation grid interconnection planning, the ASEAN Power Grid, and the Central Asia Regional Economic Cooperation Energy Strategy 2030.

The Asia-Pacific Digital Highway will mobilise $20 billion by 2035 to finance digital corridors, data infrastructure, and AI-ready economies.

Investments will focus on connected infrastructure, including terrestrial and subsea fiber networks, satellite links and regional data centres.

ADB will also provide policy and regulatory support, including on cybersecurity risk management, and invest in skills programs to strengthen digital and AI readiness.

By 2035, the initiative aims to provide first-time broadband access to 200 million people and faster, more reliable digital connectivity for another 450 million people across the region.

It is expected to cut connectivity costs in remote and landlocked areas by about 40% and help create 4 million jobs.

ADB expects to finance $15 billion of the $20 billion initiative from its own resources and raise $5 billion through cofinancing, including from the private sector.

The Centre for AI Innovation and Development will be established in Seoul to support the initiative. Backed by a $20 million contribution from the Government of the Republic of Korea, the centre will promote responsible and inclusive AI adoption and help train about 3 million people in digital and AI-related skills by 2035.

ADB President Masato Kanda said that Energy and digital access will define the region's future.

"These two initiatives build the systems Asia and the Pacific need to grow, compete, and connect. By linking power grids and digital networks across borders, we can lower costs, expand opportunity, and bring reliable power and digital access to hundreds of millions of people."

The telecom regulator has decided to allocate 10 MHz from the highly valuable 700 MHz band to state-owned Teletalk, despite the operator owing around Tk 5,500 crore in spectrum fees and already holding significant unused or underused spectrum.

The decision was taken at a recent Bangladesh Telecommunication Regulatory Commission (BTRC) meeting, according to documents.

The 700 MHz band is considered globally valuable for wide coverage, strong indoor signal, low rollout cost, and suitability for rural-urban networks, including 5G. In Bangladesh, 45 MHz of the band is allocated for mobile use, while 20 MHz remains unused due to a legal dispute.

TIMELINE OF GOVT, REGULATORY ACTIONS

On February 8, just before the national election, the interim government, through the telecom ministry, sent a letter to BTRC instructing it to allocate 10 MHz of spectrum to Teletalk.

A day later, Teletalk applied for the spectrum.

On February 16, the ministry informed the regulator that Teletalk had proposed converting its unpaid dues -- including licence and spectrum fees -- into government equity, now under finance division review.

On April 9, BTRC sought guidance from the ministry on how Teletalk would pay for the allocation. On April 24, the ministry directed the regulator to proceed with the allocation, citing the need to reduce customer inconvenience in line with the government’s election manifesto.

The price was set at Tk 237 crore per MHz, matching the rate paid by Grameenphone for 10 MHz in January as the sole bidder in the auction.

The move means the government may forgo at least Tk 2,000 crore in revenue in the near term.

Only 5 MHz of available spectrum in this band will remain for Banglalink and Robi, both of which have large customer bases. The two operators did not join the latest auction, saying prices were too high.

Spectrum is a limited and valuable resource that countries manage carefully, as it is important for improving telecom services and generating government revenue. In Bangladesh, there have been concerns about spectrum management, particularly regarding Teletalk.

LARGE DUES AND UNUTILISED SPECTRUM

Teletalk holds 55.2 MHz across the 900, 1800, 2100, and 2300 MHz bands and serves around 68 lakh subscribers, giving it about 0.81 MHz per lakh users.

By comparison, Grameenphone has 137.4 MHz for 8.44 crore subscribers (0.16 MHz per lakh), Robi has 124 MHz for 5.74 crore users (0.22 MHz per lakh), and Banglalink has 80 MHz for 3.74 crore users (0.21 MHz per lakh).

Despite higher spectrum per subscriber, Teletalk’s voice and data service quality has been weaker than peers in BTRC quality tests over the years, and it has added only about 1 lakh subscribers in five years.

The operator has also not used 30 MHz in the 2300 MHz band acquired in the 2022 auction, despite rollout obligations, which is considered a breach of spectrum utilisation rules.

Teletalk’s total liabilities include Tk 120 crore in licence fees, Tk 102 crore in revenue sharing, Tk 5,506 crore in spectrum fees, and around Tk 62 crore in other charges.

EXPERT CRITICISM

“Private operators are required to follow strict rules, but public companies often do not face the same obligations, which creates a market imbalance,” said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue.

He added that large unpaid dues raise doubts about such firms’ ability to survive in a competitive market, noting they often rely on government support rather than efficiency.

TIM Nurul Kabir, a telecom expert, said, “Spectrum is a valuable resource and allocating it to an operator that cannot ensure good service or generate revenue is a poor regulatory decision.”

“The government needs a different approach to revive Teletalk rather than using up valuable resources. Such decisions are also anti-competitive,” he added.

Md Emdad ul Bari, chairman of BTRC, said the allocation was approved on the condition that spectrum charges would be converted into government equity.

He said this would not cause revenue loss, as funds would shift between state entities as equity investments.

Top 11 banks held Tk 52,034 crore of non-performing loans (NPLs), accounting for about 71.67 per cent of total default loans in the CMSME sector, highlighting a high concentration of credit risk in a handful of lenders.

According to Bangladesh Bank data as of December 31, 2025, total loan disbursement by 60 scheduled banks in the cottage, micro, small and medium enterprise (CMSME) sector stood at Tk 3,01,397 crore, representing 16.58 per cent of overall outstanding loans of Tk 18,17,736 crore. Countryspecific content

However, recovery from the sector is better compared with the other industries. Banks’ total NPL ratio stood at 30 per cent in December, 2025.

Default loans in the segment were Tk 72,600 crore, or 24 per cent of total CMSME lending.

CMSME refers to small-scale business activities ranging from cottage industries and micro enterprises to small and medium-sized firms.

The CMSME sector is widely regarded as the backbone of Bangladesh’s economy, contributing around 25 per cent to GDP and supporting millions of entrepreneurs, traders and small manufacturers.

These businesses typically operate with limited capital but play a central role in job creation, rural industrialisation and income distribution.

Despite its importance, the sector remains vulnerable due to limited access to finance, weak financial literacy and dependence on informal networks.

Banks are expected to fill this gap.

Due to poor lending by several state-run banks and weak shariah-based banks, NPL in the sector surged.

Among the major defaulters, Islami Bank Bangladesh PLC alone had Tk 9,761 crore in bad loans against Tk 29,759 crore disbursed, with an NPL ratio of 33 per cent in the CMSME sector.

BASIC Bank showed one of the worst asset qualities, with Tk 6,168 crore in defaults out of Tk 8,839 crore disbursements, translating into a 70 per cent NPL ratio.

State-owned Janata Bank and Sonali Bank reported Tk 5,947 crore and Tk 4,948 crore in default loans respectively, while Agrani Bank had Tk 4,474 crore in NPLs.

Among private banks, First Security Islami Bank recorded an alarming 96 per cent NPL ratio with Tk 4,884 crore in defaults against Tk 5,107 crore in loans in CMSME, while Padma Bank showed a similar trend with a 95 per cent NPL ratio in the CMSME sector.

Other banks with significant exposure include Al-Arafah Islami Bank (Tk 3,891 crore NPL), Social Islami Bank (Tk 3,241 crore), EXIM Bank (Tk 3,058 crore) and United Commercial Bank with Tk 2,449 crore.

In contrast, several banks maintained relatively strong asset quality.

BRAC Bank, the largest CMSME lender with Tk 30,570 crore in disbursement, reported only Tk 670 crore in defaults.

Pubali Bank and City Bank also kept NPLs low at Tk 484 crore and Tk 322 crore respectively.

As a result high NPL, credit flow to small businesses slows down, affecting expansion, employment and production.

Persistent defaults also raise borrowing costs. Banks tend to charge higher interest rates to offset risks, making financing less affordable for genuine entrepreneurs.

In a sector already constrained by limited resources, this can discourage new investments and weaken overall economic momentum.