State-Owned Rupali Bank PLC Reports Deficit of Tk396 Crore

Rupali Bank PLC has entered a period of heightened financial instability, recording a consolidated net loss of Tk396 crore for the first quarter of 2026. Official corporate disclosures indicate that the worsening performance is a direct result of accelerating non-performing loans (NPLs), unmitigated asset provisioning shortfalls, negative retained earnings, and a severe breach of minimum capital adequacy thresholds.

Net Interest Income Contraction and Performance Metrics

According to a price-sensitive disclosure submitted to the Dhaka Stock Exchange (DSE) on 18 May 2026, the lender’s standalone operations for the January–March quarter suffered from an unsustainable structural imbalance.

During the three-month period, the bank’s interest income fell by 23% year-on-year to Tk658 crore. Concurrently, its operational cost of funds escalated by 15% to Tk1,304 crore. This divergence pushed Rupali Bank’s net interest income deep into negative territory, generating a net interest deficit of Tk645.78 crore. The data demonstrates that the bank is paying significantly higher interest rates to its depositors than it is generating from its outstanding loan and investment portfolios.

As a consequence of these operational deficits, the bank reported a loss per share of Tk8.12 for the quarter, while its net asset value (NAV) per share contracted by 23% to Tk27.05. Furthermore, its retained earnings deteriorated to negative Tk351 crore by the end of March.

Non-Performing Loans and Special Regulatory Relief

The rapid expansion of classified assets remains the primary driver of the bank’s balance sheet erosion. The 2025 statutory audit report, compiled by independent chartered accounting firm Mahfel Huq & Co, revealed that Rupali Bank’s total default loans rose to Tk20,015 crore by the end of the fiscal year. This volume of non-performing assets constitutes 39.05% of the institution’s entire outstanding loan book.

To hedge against these non-performing assets, banking laws mandated that the lender maintain a total provisioning reserve of Tk14,014 crore. Rupali Bank failed to secure this capital. Despite this material shortfall, Bangladesh Bank provided the lender with special regulatory forbearance on 30 April 2026, allowing the bank to publish its official financial statements without fully reflecting or deducting the provisioning deficit.

Capital Adequacy Failures and DSE Downgrade

The independent audit also flagged severe non-compliance with statutory capital adequacy frameworks. Under the international Basel III guidelines enforced by the central bank, commercial banks must maintain a minimum Capital to Risk-Weighted Assets Ratio (CRAR) of 12.5%, inclusive of the capital conservation buffer. Rupali Bank’s solo ratio stood at a critical 2.88%, while its consolidated CRAR was recorded at 2.94%.

Additionally, the bank’s total paid-up capital of Tk487.93 crore remains below the statutory minimum threshold of Tk500 crore, reducing its capacity to absorb further credit defaults.

The core financial indicators from the bank’s recent disclosures are structured below:

As a direct consequence of this sustained financial decline and its failure to disburse dividends to shareholders for two consecutive financial years, the Dhaka Stock Exchange officially downgraded Rupali Bank PLC to the “Z” category (junk status) for the first time in its trading history. Following the classification adjustment, the bank’s shares fell by 0.62% to close at Tk16.10.

The Government of Bangladesh remains the primary majority owner of the institution, holding 90.19% of all outstanding shares. Institutional investors hold a minor 3.32% stake, while the remaining 6.49% is distributed among the general public.