Foreign banks’ credit contracts 11% in 2025 despite profit uptick
Loan portfolio falls as lenders adopt cautious credit strategy.
Foreign commercial banks operating in Bangladesh saw their credit portfolio contract in 2025 despite a modest rise in net profits, as institutions maintained a cautious lending strategy amid shifting macroeconomic conditions, central bank data showed.
According to a report by the Statistics Department of Bangladesh Bank covering July-December 2025, total loans and advances extended by foreign banks fell 11.3% year-on-year to Tk46,122 crore at the end of December 2025.
Their share of total credit in the domestic banking sector subsequently slipped to 2.6%, down from 3.1% in December 2024.
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While broad credit participation declined, foreign banks retained significant dominance in international trade settlement.
Foreign lenders processed $4.12 billion in export receipts, accounting for 18.8% of Bangladesh's total export receipts and $4.29 billion in import payments, equivalent to 13.1% of the country's imports.
Net profit has also increased despite a decline in credit. Post-tax profit rose to nearly Tk3,739 crore in the second half of 2025, up from Tk3,557 crore during the same period a year ago, aided by reduced tax liabilities.
Outward profit and earnings remittances by foreign banks grew to Tk1,314 crore, up from Tk577 crore in the same period a year earlier. Reinvested earnings fell by more than half to Tk2,096 crore.
Deposits held at foreign banks stood at Tk87,568 crore, reducing their total market share slightly from 4.6% to 4.2%.
Though non-performing loans (NPL) ticked up to 5.9% in December 2025 from 4.9% in December 2024, it remains far lower than the banking sector's average of over 32%.
Also, foreign banks remain among the most heavily capitalised in the region, boasting a Capital Adequacy Ratio of 41.05% and a Liquidity Coverage Ratio of 458.56%, far above regulatory baselines.
