Banks’ assets-to-GDP ratio stands at 61.0 pc in FY19

FE ONLINE REPORT | Sunday, 10 November 2019

The country’s banking sector assets-to-GDP (Gross Domestic Product) declined marginally in the past fiscal year (FY19), according to a report released by the central bank last week.

It showed that the banking sector assets-to-GDP ratio stood at 61.0 per cent at the end of June 2019, which was 62.3 per cent at end-June 2018.

Bangladesh Bank data also revealed that the balance sheet size of the banking sector increased to Tk 1.54 trillion at end-June 2019 from Tk 1.40 trillion at end-June 2018.

Loans and advances, the largest segment among the asset items of banks, constituted 66.2 per cent of total assets at the end of FY19, which was 65.4 per cent in FY18.

The asset concentration ratios of the top-five and top-10 banks against the total banking assets stood at 30.4 per cent and 44.3 per cent at end-June 2019 which were 30.9 per cent and 44.5 per cent respectively at end-June 2018 per cent and 43.9 per cent respectively.

“An increase in asset concentration is undesirable from a financial stability standpoint as it amplifies the influence and potential risk of only a few institutions over the entire financial system,” the report added.

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