Classified loans in Bangladesh’s banking sector declined significantly in the fourth quarter of 2025, falling by Tk87,298.33 crore compared to the previous quarter, according to data released by Bangladesh Bank.
As of 31 December 2025, total classified loans stood at Tk5,57,216.92 crore, down from Tk6,44,515.25 crore recorded at the end of September 2025. The improvement reflects a notable quarterly reduction in non-performing assets across the banking system.
The gross classified loan ratio also showed improvement, dropping to 30.60 per cent in December from 35.73 per cent in September 2025. However, on a year-on-year basis, the ratio remains considerably higher than the 20.20 per cent recorded in December 2024, indicating that asset quality challenges persist.
After adjusting for provisions and suspense interest, the net classified loan ratio decreased sharply to 13.93 per cent in December from 26.40 per cent in September. Specific defaulted loans amounted to Tk5,44,831.88 crore, representing 29.92 per cent of total outstanding loans, reflecting a reduction of Tk68,039.57 crore during the quarter.
All major categories of banks reported improvements. State-owned commercial banks saw their classified loan ratio decline to 44.44 per cent from 49.65 per cent, while private commercial banks improved to 28.25 per cent from 33.75 per cent. Specialised banks recorded a drop to 39.74 per cent from 41.95 per cent, and foreign banks maintained the lowest ratio at 4.51 per cent.
Despite the decline in bad loans, the sector faces a substantial provision shortfall of Tk1,91,441.35 crore. Total outstanding loans across 61 scheduled banks reached Tk18,20,915.44 crore by December 2025, reflecting annual credit growth of 6.40 per cent, led by private banks with a 7.56 per cent rise in lending.
