Investor Presentaiton

300 250 200 * BDT thousand crore Independent Review of RBD Bangladesh's Development Do Banks Perceive Risks on the Horizon? ☐ Banks have also increased their holdings of unencumbered approved securities, which are zero risk rated assets issued or guaranteed by the government Holdings of unencumbered approved securities of all banks increased from BDT 211 thousand crore, or 67% of total liquid assets, in January 2020, to BDT 312 thousand crore, or 74% of total liquid assets, in April 2022 ☐ The decision of commercial banks to hold excess liquidity in the form of unencumbered approved securities instead of funds for lending shows that commercial banks perceive that the yields on risk free unencumbered approved securities are better than the risk adjusted returns on interest-bearing loans that come with default risk. This indicates that commercial banks are hesitant to lend, as they probably that believe that economic activity is yet to pick up and so their loans may have a high probability of turning bad. Figure: Unencumbered approved securities 350 (BDT in thousand crore) Figure: Unencumbered approved securities as a share of total liquid assets (in per cent) 100 150 100 50 Jan-20 Feb-20 Mar-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Dec-20 Jan-21 Mar-21 Apr-21 Jun-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Mar-22 -SCB -PCB IB FCB -All banks CPD (2022): State of the Bangladesh Economy in FY2021-22 (Third Reading) Apr-22 Per cent 80 60 40 20 O SCB PCB Jan-20 Feb-20 Mar-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Dec-20 Jan-21 Mar-21 Apr-21 Jun-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Mar-22 Apr-22 IB - FCB -All banks 68

View entire presentation