Sonali Bank turns Tk5,949cr capital deficit into Tk83cr surplus
Shawkat Ali Khan credited the success to strict borrower selection and enhanced recovery efforts, noting that committees at various levels, including the head office, have played a key role in reducing non-performing loans (NPLs)
Highlights:
- Sonali Bank erased Tk5,949cr capital deficit, posting Tk83cr surplus
- Operational profit rose 40.79% in 2025; no provision shortfall
- NPL ratio fell to 15.51%, lowest among state-owned banks
- Recoveries improved; Tk4,895 crore recovered, including higher cash collections
- Government dues and bond delays still require provisioning, limit earnings
- Deposits and loans grew; 2026 focus on CMSME lending, vigilance
State-owned Sonali Bank PLC has successfully transformed its temporary capital shortfall into a surplus by combining stringent measures against defaulted loans with cautious lending and strengthened recovery efforts.
Managing Director and CEO Md Shawkat Ali Khan told The Business Standard that the bank's biggest achievement in 2025 was reducing the capital gap to zero and generating a surplus.
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According to its audited accounts for 2024, the bank faced a capital deficit of Tk5,949 crore.
Provisional figures for 2025 show that this deficit has been fully covered, leaving a capital surplus of Tk83 crore. The CEO expressed optimism that if the bank continues along planned lines, its capital buffer could rise to 12% in 2026
Provisional accounts as of 31 December 2025 show the bank with no provision shortfall and a small surplus of Tk6 crore, compared to a provision requirement of Tk23,008 crore and actual provisions of Tk23,014 crore. Operational profit in 2025 stood at Tk8,017 crore, up 40.79% from Tk5,694 crore in 2024.
Shawkat Ali Khan credited the success to strict borrower selection and enhanced recovery efforts, noting that committees at various levels, including the head office, have played a key role in reducing non-performing loans (NPLs).
The provisional NPL ratio now stands at 15.51%, the lowest among state-owned banks, down from 18.20% in 2024.
Total NPLs have decreased from Tk18,058 crore to Tk16,250 crore, with Tk4,895 crore recovered last year, including Tk1,195 crore in cash, compared to Tk1,272 crore recovered in 2024, including Tk580 crore in cash.
As of September, Sonali Bank's loan to the state-owned Bangladesh Sugar and Food Industries Corporation stood at Tk6,925 crore. The bank requested bond issuance from the Finance Ministry against this loan, which has not yet been disbursed, requiring Tk300 crore in provisioning.
Additionally, Sonali Bank has opened LCs worth $11.38 billion (Tk94,226 crore) for the Rooppur Nuclear Power Plant. While the standard LC commission is 40 paisa per Tk100, the government has capped it at 5 paisa for this project. As of now, the government owes the bank Tk1,500 crore in commission. Khan noted that receipt of these dues would further boost the bank's profits.
Deposits grew by 9% in 2025 to Tk1.79 lakh crore, while loans and advances increased by 5.57% to Tk1.04 lakh crore. The CEO highlighted that no special schemes or targets were set for deposit growth; the increase reflects growing public confidence in the bank.
Looking ahead to 2026, Sonali Bank plans to expand quality lending while reducing investment in government securities and focusing on commercial lending. Priority will be given to cottage, micro, small, and medium enterprises (CMSMEs).
Loan recovery efforts will continue through borrower negotiation, interest waivers, and rescheduling, following the successful strategies of 2025.
About Tk500 crore of loans were rescheduled last year under the guidance of the Policy Support Committee and with Bangladesh Bank approval, with down payments ranging from 1% to 2% depending on the case.
Shawkat Ali Khan emphasised that the bank will remain vigilant to prevent future NPL growth and ensure no new "Hallmark Group" crises emerge.
