National Bank (NBL) financial analysis: 59.7% NPL, Tk18,608 crore deferred provision shortfall, negative CRAR (Oct 2026)

Investment considerations: negative equity, a deferred Tk18,608 crore provision gap and BB-backed liquidity define the bank

National Bank PLC (NBL) is a first-generation private commercial bank, licensed by Bangladesh Bank in 1983, with 221 branches and six subsidiaries (a brokerage, a merchant bank and four overseas money-transfer companies) [1 p.26]. At 30 June 2026 it reported loans of BDT 431.8bn, deposits of BDT 338.0bn, borrowings from banks and other agents of BDT 107.1bn and shareholders' equity of BDT -46.9bn on a standalone balance sheet of BDT 511.2bn [2 p.4].

This is a stressed bank, and the note describes the stress as the filings report it. Since 2022 NBL has lost money every year: BDT 32.9bn in 2022, 15.2bn in 2023, 17.2bn in 2024 and 24.3bn in 2025 [4 p.19] [3 p.20] [1 p.21], and BDT 22.9bn in the first half of 2026 alone [2 p.6]. The FY2025 audit opinion is qualified on three grounds: a provision shortfall of Tk18,608.33 crore that Bangladesh Bank (BB) has allowed the bank not to book, a CRAR of -5.48% against the 12.5% minimum, and a liquidity crisis caused by depositor withdrawals [1 p.3] [1 p.4].

Business: a 221-branch first-generation bank whose loan book stopped paying interest

NBL was licensed in March 1983 and is listed on both the Dhaka and Chittagong exchanges [1 p.26]. It runs conventional commercial banking, trade services, treasury and two offshore banking units, and owns NBL Securities, NBL Capital and Equity Management, and money-transfer companies in Singapore, Malaysia, the Maldives and Greece [1 p.12] [1 p.26]. Like other Bangladeshi banks it earns money from the spread between loan yields and deposit costs, from government securities, and from trade fees and foreign exchange.

What changed in five years is that the spread business stopped working. In 2021 NBL earned BDT 30.8bn of interest and paid BDT 29.5bn, a thin but positive net interest income of BDT 1,394m [4 p.19]. As classified loans rose from BDT 92.6bn (2021) to BDT 279.0bn (2024), interest on those loans stopped being recognised as income, and interest income fell to BDT 8.4bn in 2025 [3 p.63] [1 p.21]. At the same time the bank paid more to keep and replace deposits and to borrow from other banks, so interest expense rose to BDT 44.1bn [1 p.21].

Asset quality: 59.7% classified and Tk18,608 crore of provision deferred by Bangladesh Bank

Classified loans were 59.69% of loans at Dec-2025, down from 64.64% at Dec-2024 but up from 20.80% in 2021 [1 p.67] [5 p.60]. In taka, classified loans rose from BDT 38.3bn (2020) to BDT 279.0bn (2024) and were BDT 255.1bn at Dec-2025 [5 p.60] [1 p.67]. The model computes 59.60% from the same highlights page (classified loans / total loans); the 9bp difference is the bank's own denominator [18]. The auditor gives gross loans of BDT 42,801 crore for the bank at year end [1 p.5].

Provisioning has not kept up. The 'provision kept against classified loans' line on the highlights page barely moved, from BDT 14.4bn in 2021 to BDT 17.3bn in 2025, so it covered 15.5% of classified loans in 2021 and 6.8% in 2025 [18]. The highlights page still shows the 'provision surplus / (deficit)' row as nil each year [1 p.67]; that is because the shortfall is held off the books under BB forbearance, not because none exists. The income statement shows almost no loan provisioning since 2022: nil in 2022 and 2023, BDT 1,321m in 2024 (other classified assets) and BDT 6.1m in 2025 [3 p.20] [1 p.21].

The shortfall. The auditor's basis for qualification says that, under BB's no-objection letter BSD-7/48/2/1/2026-323 of 28-Apr-2026, the bank needed Tk21,025.32 crore of provision against loans, investments, gratuity and other assets and kept Tk2,416.99 crore, a shortfall of Tk18,608.33 crore at 31-Dec-2025. BB letter BSD-7/48/2/1/2026/332 of 29-Apr-2026 'allowed forbearance of the said provision shortfall' [1 p.3]. The same wording appears in the auditor's statutory report, which says 'adequate provisions have not been made for advance and other assets which are in our opinion, doubtful of recovery' [1 p.11]. Maintained provision is 11.5% of the requirement, and the shortfall is 73% of classified loans [18].

The press puts the 2026 position in similar terms. TBS, citing BB data, reports 56.44% of loans (about Tk24,000 crore) non-performing and a provision shortfall of about Tk20,000 crore [13]; these are a single outlet's figures and differ from the audited Dec-2025 numbers above. The H1 2026 interim does not disclose a June 2026 classification table or shortfall [2 p.9].

Capital: CRAR -5.48% and a Tk11,235 crore shortfall before any provision catch-up

CRAR was -5.48% at Dec-2025 and 0.65% at Dec-2024, against a 12.5% minimum [1 p.3]. The auditor states the minimum capital as Tk7,810.50 crore (2025) and Tk7,409.45 crore (2024), and the shortfalls as Tk11,234.51 crore and Tk7,026.36 crore, adding that 'the position will be weakened if full amount of provision shortfall is required to be charged against capital' [1 p.3].

Total regulatory capital went from BDT 56.6bn in 2021 to BDT 42.9bn (2022), 17.6bn (2023), 3.8bn (2024) and BDT -34.2bn (2025) [4 p.63] [3 p.63] [1 p.67]. Back-solving the minimum gives risk-weighted assets of about BDT 624,840m; on that base the reported capital gives the reported -5.48%, and the capital deficit of BDT 112,345m matches the highlights page [18]. If the deferred provision gap were charged to capital, the shortfall to 12.5% would be about BDT 298,428m, roughly 25 times the market value of the shares [18].

Reported equity also leans on deferred tax. The bank booked tax credits of BDT 2.4bn (2022), 6.4bn (2023), 10.2bn (2024) and 8.1bn (2025), 37.3% of the 2024 pre-tax loss [1 p.21] [18]. The auditor notes that 'a major portion' of the Tk844.87 crore DTA recognised in 2025 rests on business losses being set off against future profits, and that 'these may need to derecognize in future periods' without adequate profitability [1 p.11]. In H1 2026 no deferred tax credit was booked, so the pre-tax and after-tax losses are the same BDT 22.9bn [2 p.6].

Line items: interest paid is 5x interest earned, and 2025's trading gains did not repeat in 2026

Interest paid was 5.25x interest income in 2025, up from 0.95x in 2021 [18]. Each line explains part of that.

Interest income fell 40.7% in 2022, 13.8% in 2023, 5.8% in 2024 and 43.5% in 2025, while the loan book stayed near BDT 430bn [18]. Bangladesh Bank rules stop interest accrual on classified loans and move it to interest suspense [1 p.34], so with three-fifths of the book classified, most loans earn nothing in the income statement. In H1 2026 interest on advances was BDT 3.0bn against BDT 4.6bn a year earlier; the filing says interest income 'decreased mainly due to non charging of interest on some loans' being classified [2 p.9].

Interest expense rose 22.7% in 2024 and 17.4% in 2025 even though deposits shrank [18]. The reported cost of fund including operating cost went from 7.30% (2022) to 9.67% (2024) and 10.32% (2025) [4 p.63] [1 p.67]. Borrowing has become the marginal funding source: interest on borrowings was BDT 10.0bn in H1 2026, up from 7.7bn, 42.6% of all interest paid [2 p.9] [18].

Investment income is now the only sizeable income line. It rose to BDT 15.3bn in 2025 [1 p.21], 65% of interest plus investment income [18]. Most of it was trading gains: in H1 2025 'gain on Govt. securities' was BDT 4.3bn of BDT 5.9bn investment income; in H1 2026 the same line was BDT 32m and investment income fell to BDT 464m [2 p.9]. The bank's government security holdings were down to BDT 0.3bn at Jun-2026 [2 p.4], which suggests the 2025 gains came from disposals of securities to meet withdrawals.

Commission, exchange and brokerage was negative BDT 1.7bn in 2025 [1 p.21]; the H1 2025 note shows an exchange loss of BDT 1.0bn net [2 p.10]. In H1 2026 the line recovered to BDT +460m [2 p.6]. Operating expenses jumped to BDT 35.6bn in 2022 because of a BDT 23.5bn 'charges on loan losses' line [4 p.19], then fell to BDT 10.7bn in 2025; salaries were BDT 5.0bn [1 p.21].

Sensitivity, from history only: in 2025 each BDT 1bn of interest income not recognised widened the loss before tax by BDT 1bn, since no provision or tax offset sits against it at the pre-tax line; the 2025 fall in interest income of BDT 6.5bn compared with a BDT 4.9bn wider pre-tax loss [18].

Deposits and liquidity: 28% of deposits gone since 2021, statutory liquidity short, and press-reported BB-backed support

Deposits peaked at BDT 473.1bn in 2021 and were BDT 338.0bn at Jun-2026, 28.4% lower at Dec-2025 [5 p.60] [2 p.4] [18]. The steepest falls came in 2022 (-10.3%) and 2024 (-13.2%), the years the board crises and the proposed UCB merger were in the news [18] [14] [15].

Loans did not shrink with deposits, because most of them cannot be collected. Loans / deposits went from 94.1% in 2021 to 126.3% in 2025 and 127.7% at Jun-2026 [18]. The gap is filled with borrowing: BDT 127.3bn at Dec-2024, 97.6bn at Dec-2025 and 107.1bn at Jun-2026, about a quarter of total funding [1 p.19] [2 p.4] [18].

Liquidity. The auditor's third qualification reads: 'National Bank PLC is facing a liquidity crisis due to the panic withdrawal of depositors.' Operating cash flow was negative Tk4,355.95 crore in 2025 and Tk6,350.15 crore in 2024, and 'without further liquidity arrangements, fulfilling the depositor's withdrawal demand will be difficult' [1 p.4]. CRR was short by Tk1,270.77 crore and SLR by Tk3,972.35 crore at Dec-2025 [1 p.4]. Cash and BB balances were 1.64% of deposits at Dec-2025 and 3.50% at Jun-2026 [18]. H1 2026 operating cash flow was BDT -7.2bn, against BDT -29.8bn in H1 2025 [2 p.8].

Liquidity support (press, attributed). TBS reports that BB had provided Tk84,945 crore of liquidity support to weak banks by early September 2026, of which Tk10,568 crore went to National Bank; TBS describes NBL's support in recent years as uncollateralised, and reports that BB was prepared to channel up to Tk10,000 crore more through other banks with itself as guarantor [13]. The Daily Star reports that Sonali Bank lent Tk7,000 crore to NBL for three months at 10% under a 100% BB guarantee, completed in mid-October 2026, to meet withdrawal requests (nearly 7,000 pending, per the chairman) [12]. Both outlets report that full services, including cheque, RTGS and NPSB withdrawals and letters of credit, were set to resume on 15-Oct-2026 [13] [12]. Each support figure comes from one outlet; the filings do not disclose the amounts.

Ratios: ROA -4.5%, loans 126% of deposits, equity -4.8% of assets

Every return ratio has been negative since 2022. ROA was -5.99% (2022), -2.79% (2023), -3.02% (2024) and -4.51% (2025) on average assets [18]; the bank reports -5.99%, -2.79%, -3.02% and -4.51% [4 p.63] [3 p.63] [1 p.67]. ROE is not meaningful once equity turns negative. Equity / assets fell from 9.0% (2021) to -4.8% (2025) [18].

Cash conversion and payout have no meaning in loss years; the relevant cash measure is operating cash flow, negative in 2024, 2025 and H1 2026 as above. Multiples are facts only: at BDT 3.7 the shares have a market value of BDT 11.9bn against reported equity of BDT -46.9bn (Jun-2026) [11] [2 p.4]; P/E and P/B are negative. The bank's own highlights show year-end P/E of -0.42x (2025) and -0.92x (2024) [1 p.67].

Audit: qualified on the provision gap, negative CRAR and liquidity; emphasis on BB-rule accounting

The FY2025 audit opinion is qualified; the emphasis of matter covers the basis of preparation under BB rules. The auditor, Islam Aftab Kamrul & Co., signed on 30-Apr-2026 [1 p.1]. The opinion reads 'except for the effect of the matters described in the Basis for Qualified Opinion section', and the basis lists (1) the Tk18,608.33 crore provision shortfall under BB forbearance, (2) CRAR of -5.48% against 12.5%, and (3) the liquidity crisis, negative operating cash flow and CRR/SLR shortfalls [1 p.3] [1 p.4].

The emphasis of matter says: 'We draw attention to note 2 to the financial statements where management has explained the basis of preparation of financial statements including compliance with Rules and Regulations issued by Bangladesh Bank on classification of loans and advances, and required impairment provision. Our opinion is not modified in respect of these matter' [1 p.4]. Key audit matters were loan provisioning, interest income recognition and treasury valuation [1 p.5] [1 p.6].

Other auditor remarks: the DTA comment above [1 p.11]; Tk24.91 crore of non-banking assets, awarded by courts in 2005-2009, not sold as required by section 10 of the Bank Company Act [1 p.12]; and two overseas money-transfer subsidiaries (Singapore, Greece) whose audits were not complete [1 p.12]. The financial statements are still prepared on a going-concern basis [1 p.30].

Governance: Bangladesh Bank board dissolutions in December 2023 and May 2024 ended Sikder family control

Bangladesh Bank dissolved NBL's board in December 2023 and May 2024, and, as reported by The Business Standard, a third time in August 2024. The Sikder Group controlled the board for years [13] [15].

December 2023: BB dissolved the board at the request of the Bangladesh Securities and Exchange Commission and named Syed Ferhat Anwar chairman; Monowara Sikder and her sons Rick Haque Sikder and Ron Haque Sikder were removed [15]; Parveen Haque Sikder stayed on until May 2024 [15]. May 2024: after the board split over a BB-backed proposal to merge NBL into United Commercial Bank, which the board voted against on 28 April, BB dissolved the board again under the Bank Companies Act 1991 and appointed KDS Group chairman Khalilur Rahman as chairman; Parveen Haque Sikder lost her seat [14] [15]. Depositors began withdrawing after the merger news spread on 9 April 2024, according to TBS [14].

August 2024: BB dissolved the board a third time and formed a seven-member board of three shareholder directors, including Abdul Awal Mintoo, and four independent directors (TBS, 20-Aug-2024) [16]. Mintoo later chaired the board; Professor Melita Mehjabeen, an independent director, replaced him as chairman on 28-Feb-2026 because MPs may not chair a bank (TBS) [17]; The Daily Star also names her as chairman in October 2026 [12]. TBS reports that members of the Multimode, Hosaf and Armana Group families now run the bank [13]; that is a single-outlet description. Reports that S Alam Group associates joined the board in 2024 come from search summaries we could not open, so this note does not rely on them.

The H1 2026 filing says 'the new Board and the new Management are exerting maximum efforts to improve the financial health of the bank by streamlining recovery drives and mobilization of low cost deposits' [2 p.11]. TBS reports an acting managing director, Zahidul Haque, in October 2026 [13].

Dividend: paid-up clears the Tk2,000 crore line, but negative capital and BDT 96.8bn of losses rule out a payout

The Tk2,000 crore paid-up rule does not bind NBL; its losses do. BB SPCD Circular 06 of 23-May-2026 bars any cash dividend when paid-up capital is below Tk2,000 crore (para 3(ka)) and caps cash at 50% of the total dividend for banks that meet all directives (para 3(kha)), from the year ending 31-Dec-2026 [6 p.1]. NBL's paid-up capital is Tk3,219.74 crore [2 p.7], so the Tk2,000 crore threshold is met; what blocks a dividend is negative capital (CRAR -5.48% against the minimum the circular requires through DOS Circular 01/2025) and BDT 96.8bn of accumulated losses.

Other conditions block a dividend. The circular links eligibility to DOS Circular 01/2025, which ties payouts to keeping minimum capital with the conservation buffer [6 p.1]; NBL's CRAR is -5.48% [1 p.3]. Retained earnings were BDT -96.8bn at Jun-2026, 3.0x paid-up capital [2 p.7] [18], and statutory reserve has not been added to since the losses began [1 p.21]. The bank's EPS was BDT 0.06 in 2021 and negative from 2022 [4 p.63] [1 p.67]; no dividend is reported for 2022-2025 in the filings read.

What's next: Q3 2026 figures, the Sonali Bank loan, FY2026 forbearance and the DTA

What will move the lines next, with dates. No numbers are forecast here.

Risks: forbearance, deposit flight and BB funding decide what is left for shareholders

Each risk is tied to the line it moves. Scale: 2025 pre-tax loss BDT 32,351m; market value BDT 11.9bn [18] [11].

Key questions: forbearance, deposits, recoveries, central-bank funding and the DTA

FAQ

What is National Bank's NPL ratio?

59.69% of loans were classified at 31-Dec-2025 (BDT 255.1bn), down from 64.64% at Dec-2024 [1 p.67].

Does National Bank have a provision shortfall?

Yes: Tk18,608.33 crore at Dec-2025 (required Tk21,025.32 crore, kept Tk2,416.99 crore). Bangladesh Bank allowed forbearance by letter of 29-Apr-2026 [1 p.3].

What is National Bank's CRAR?

-5.48% at Dec-2025 against the 12.5% minimum, a capital shortfall of Tk11,234.51 crore [1 p.3].

Was the FY2025 audit opinion qualified?

Yes, on the provision shortfall, capital adequacy and liquidity, with an emphasis of matter on the basis of preparation under BB rules [1 p.3] [1 p.4].

Can National Bank pay a dividend?

Paid-up capital of Tk3,219.7 crore clears the Tk2,000 crore line in SPCD Circular 06, but negative capital and BDT 96.8bn of accumulated losses rule out a payout [6 p.1] [2 p.7].

Which results does this note use?

Standalone audited statements 2020-2025 and the unaudited H1 2026 statements. The Q3 2026 statement (board meeting 29-Oct-2026) is not yet in our corpus.

Sources

1. National Bank PLC audited financial statements 2025 (year to 31-Dec-2025), auditor Islam Aftab Kamrul & Co. · link · accessed 2026-10-31
2. National Bank PLC unaudited financial statements, six months to 30-Jun-2026 · link · accessed 2026-10-31
3. National Bank Limited audited financial statements 2024 (with 2023 comparatives) · link · accessed 2026-10-31
4. National Bank Limited audited financial statements 2022 (with 2021 comparatives) · link · accessed 2026-10-31
5. National Bank Limited audited financial statements 2021 (with 2020 comparatives) · link · accessed 2026-10-31
6. Bangladesh Bank SPCD Circular No. 06, 23-May-2026, dividend declaration policy for banks (Bangla) · link · accessed 2026-10-31
7. United Commercial Bank PLC Annual Report 2025 (peer: NPL, CRAR, deferral) · link · accessed 2026-10-31
8. Islami Bank Bangladesh PLC audited financial statements 2025 (peer: CRAR, shortfall) · link · accessed 2026-10-31
9. NCC Bank PLC Annual Report 2025 (peer: NPL, CRAR) · link · accessed 2026-10-31
10. DSE announcements via AnalystBro events: Q2 2026 results (28-Jul-2026), Q3 2026 board meeting (29-Oct-2026), spot-market notices · link · accessed 2026-10-31
11. AnalystBro price data (TradingView feed): DSE:NBL daily bars to 29-Oct-2026 · link · accessed 2026-10-31
12. The Daily Star, 'Sonali Bank lends Tk 7,000cr to National Bank with Bangladesh Bank guarantee' (14-Oct-2026) · link · accessed 2026-10-31
13. The Business Standard, 'National Bank to start disbursing deposits from 15 Oct' (9-Oct-2026) · link · accessed 2026-10-31
14. The Business Standard, 'Cenbank dissolves National Bank board again; Khalilur Rahman becomes new chairman' (5-May-2024) · link · accessed 2026-10-31
15. The Daily Star, 'Sikder family loses grip on National Bank' (6-May-2024) · link · accessed 2026-10-31
16. The Business Standard, 'BB dissolves National Bank board again, forms new 7-member board' (Aug-2024) · link · accessed 2026-10-31
17. The Business Standard, 'Melita Mehjabeen made new National Bank chair, replacing Minister Abdul Awal Mintoo' (Mar-2026) · link · accessed 2026-10-31
18. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31