NCC Bank financial analysis: NPL 4.1% after write-offs, writ-stayed loans, no cash dividend under Tk2,000 crore rule (Oct 2026)

Investment considerations: a 4% NPL bank with 15.5% CRAR, whose next two years depend on writ-stayed loans, SMA migration, bond income and the Tk2,000 crore rule

National Credit and Commerce Bank PLC (NCC Bank) is a second-generation private commercial bank with 132 branches, 10 sub-branches and 2,473 permanent staff at the end of 2025 [1 p.184]. It is a trade-finance and corporate lender: it handled BDT 246bn of imports and BDT 133bn of exports in 2025 [1 p.183], and 15 clients each borrowed more than 10% of its capital, BDT 92.1bn in total, none of it classified [1 p.299]. On 30 June 2026 it held deposits of BDT 325.7bn, loans of BDT 269.6bn and BDT 112.9bn of government securities on a standalone balance sheet of BDT 429.4bn [2 p.8].

The 2025 numbers look strong on the surface: profit after tax of BDT 4,861m, ROE of 17.0% and a gross NPL ratio of 4.12% in a year when the banking system's classified loans reached about 31% of the loan book, as the bank's own management discussion notes [1 p.83] [1 p.265] [18]. Three things sit underneath that an investor would weigh: how the NPL ratio fell, where the income now comes from, and what the Bangladesh Bank (BB) dividend rule does to shareholder returns.

Business: a trade-finance bank whose balance sheet has tilted from loans to government bonds since 2022

NCC Bank earns money in four ways: interest on corporate, trade and SME loans; income from government securities and shares; fees and exchange on import, export and remittance business; and a small capital-market business through its subsidiaries [1 p.265] [1 p.396]. Loans are concentrated in the cities: BDT 198.7bn of the BDT 262.7bn book was in urban Dhaka division and BDT 45.1bn in urban Chattogram at Dec-2025 [1 p.299].

Trade is the franchise. Import business rose from BDT 132.9bn (2021) to BDT 246.1bn (2025) and exports from BDT 71.2bn to 133.5bn; inward remittance fell from BDT 82.1bn to 57.3bn in 2025 [1 p.183]. The deposit base is term-heavy: fixed deposits were 51.9% of deposits and current plus savings accounts 25.4% at Dec-2025 [1 p.263] [18]; the bank's own low-cost to high-cost deposit mix moved from 44:56 (2023) to 38:62 (2025) [1 p.184].

What changed in the decade. Until 2019 NCC grew its loan book about as fast as deposits, with loans close to 90% of deposits [18]. The 2020 lending-rate cap cut interest income by 22% [4 p.32]. From 2022 the bank shifted towards government securities: investments rose from 17.6% of assets (2022) to 24.7% (2025) and government securities to 26.3% of assets by Jun-2026 [18]. In 2025 the bank cleaned its books with large write-offs, and in August 2026 BB gave in-principle approval to convert 20 conventional branches into Islamic banking branches, adding to four existing ones [14].

Asset quality: NPL fell from 7.32% to 4.12% through a Tk990 crore write-off, while sub-standard, doubtful and SMA loans rose

Gross NPL moved between 4.6% and 7.3% over 2017-2025 [18]. It peaked at 7.32% (BDT 17,589m) at Dec-2024, when 97% of classified loans were bad/loss, and fell to 4.12% (BDT 10,836m) at Dec-2025 [1 p.183] [1 p.299]. The movement table shows how: classified loans of Tk1,758.90 crore at the start of 2025 had additions of Tk1,927.36 crore and reductions of Tk2,602.68 crore, closing at Tk1,083.58 crore [1 p.209]. Of the reductions, BDT 9,897m (Tk989.71 crore) was the write-off of fully provided loans, which also cut the specific provision from BDT 14,533m to 6,566m [1 p.313].

The mix changed too. Bad/loss loans fell from BDT 17,112m to 7,237m, but sub-standard rose from BDT 329m to 1,339m and doubtful from BDT 148m to 2,259m [1 p.299]: newer defaults that have not yet aged into bad/loss. Interest suspense went the other way, from BDT 10,331m to 10,703m, after BDT 11,380m was transferred in during the year [1 p.314]. At Jun-2026 classified loans were BDT 11,245m (4.17%) and special mention loans BDT 19,400m, up from 11,918m six months earlier [2 p.18].

Rescheduled loans are part of the picture. The bank holds provisions for loans rescheduled for the third and fourth time (BDT 1,141m at Dec-2025, BDT 2,137m at Jun-2026) and a general provision of BDT 1,829m against loans under BB's special rescheduling and exit plan [1 p.300] [2 p.18]. These loans are reported as unclassified, so the 4.1% NPL ratio does not include them.

Provisioning: no reported shortfall or deferral, but Tk419 crore of writ-stayed exposure is unprovided; fully provided, equity would be BDT 26.0bn

There is no reported provision shortfall. The provision table shows required and maintained provision for loans of BDT 11,261m at Dec-2025 and BDT 12,924m at Jun-2026, with excess/short of nil [1 p.300] [2 p.18], and no BB deferral is disclosed. The auditor, Mahfel Huq & Co., gave an unmodified opinion [1 p.252].

But the auditor added an emphasis of matter: the bank 'in accordance with Bangladesh Bank letter no. BSD-4(wing-3)/3201/2026-234 dated 23 April 2026, has maintained required provision' [1 p.252]. The note behind it says the letter is a no-objection (NOC) for writ-related exposures of Tk507.92 crore, identified by the external auditor, against which a provision of Tk89.05 crore is held; the bank also kept an additional Tk134.15 crore under the letter's instructions [1 p.300] [1 p.314]. Loans whose classification is stayed by the High Court have been part of NCC's book for years: the 2018 accounts already show a provision 'against which writ petition pending' under BB letters from 2017 and 2019 [5 p.46].

So the required provision is what BB allowed, not what the classification rules alone would give. If the writ-related exposures were provided at 100%, the gap would be BDT 4,189m, 13.9% of the BDT 30,162m equity at Dec-2025, before any tax effect or collateral. Equity on that basis is BDT 25,973m, or BDT 22.49 a share against reported BDT 26.12 on the post-bonus share count, and CRAR would be about 13.9% instead of 15.54% with risk-weighted assets unchanged [18]. Net NPL after specific provision and interest suspense is zero, so the standard F01 haircut on net NPL adds nothing. These are illustrations of size, not a forecast that the loans will be lost; the outcome depends on the court cases and on recoveries the bank has not disclosed.

A second item that flatters book value is deferred tax. In 2025 the bank changed its policy and recognised a deferred tax asset on specific provisions, restating 2024 profit and adding BDT 2,049m to the 2024 deferred tax asset [1 p.313] [1 p.271]. Net deferred tax assets were BDT 1,519m at Dec-2025 [1 p.313]. That asset is recoverable only if the provisions become tax-deductible, typically on write-off.

Line items: deposit costs squeezed net interest income, and bond income now carries profit

Net interest income. NII was BDT 4.6bn-6.4bn a year over 2017-2025 with no trend [18]. It fell to BDT 4,336m in 2020 when the 9% lending cap cut interest income 22% while deposits repriced slowly [4 p.32], recovered to BDT 6,105m in 2024 when lending rates were freed, and fell again to BDT 5,626m in 2025. In 2025 the reported yield on advances rose 0.34pp to 10.14% but the cost of deposits and borrowings rose 0.36pp to 6.57% and the cost of funds including administration reached 8.81% [1 p.184]. In H1 2026 interest expense was 83.6% of interest income against 77.3% a year earlier, and NII fell 23.0% to BDT 2,192m [2 p.10] [18].

Deposit cost. Interest expense was 7.23% of average deposits in 2025, against 3.90% in 2021 [18]. The driver is the deposit mix: fixed deposits rose from BDT 101.1bn (Jan-2024) to 165.3bn (Jun-2026), while current and savings accounts grew only from BDT 68.1bn to 86.9bn [1 p.263] [2 p.8]. The bank's CASA share of 26.7% at Jun-2026 is low, so it pays term rates for most of its funding. History-based sensitivity: in 2025 each 1pp on the cost of deposits and borrowings was about BDT 3.1bn a year of interest expense, more than half of 2025 profit before tax [18].

Investment income. Income from government securities and shares rose from BDT 2,025m (2017) to BDT 10,022m (2025), 49.9% of operating income [5 p.16] [1 p.265] [18]. In H1 2026 it was BDT 5,830m, 57.2% of operating income [2 p.10]. It is the reason profit rose while NII fell: treasury bill and bond yields were high in 2024-2026 and the bank put its deposit growth into them. The flip side is a mark-to-market line: the investment fluctuation provision was BDT 1,610m in 2025 and a BDT 395m release in H1 2026 [1 p.265] [2 p.10].

Fees. Commission, exchange and brokerage was flat at BDT 2,853m in 2025 and fell 16% to BDT 1,323m in H1 2026 [1 p.265] [2 p.10], despite record import and export volumes in 2025; exchange gains narrowed as the taka stabilised. Other operating income rose to BDT 1,577m in 2025 and BDT 843m in H1 2026.

Operating expenses rose 8.1% to BDT 7,004m in 2025, led by salaries (BDT 4,022m) and other expenses (BDT 1,430m) [1 p.265]; cost/income fell to 34.9% because income grew faster [18]. H1 2026 costs rose 12.0% [2 p.10].

Provisions and tax. Total provisions were BDT 6,006m in 2024 and 7,139m in 2025, of which BDT 2,454m was general provision as special mention loans rose [1 p.265]; credit cost was 2.1% and 2.0% of average loans, against 0.7-1.6% in 2017-2023 [18]. Tax fell sharply on the restated basis: BDT 682m on PBT of 5,055m in 2024 and BDT 1,044m on 5,905m in 2025, helped by deferred tax income of BDT 1,920m and 270m [1 p.265]. First-reported effective tax rates were 43-54% in 2017-2024 [18].

Ratios: ROE of 17% in 2025 rests partly on a deferred-tax restatement; capital is adequate at 15.5%

Returns. On the first-reported basis ROE was 9.5-12.2% in 2018-2024 [18]. The 2025 report restated 2021-2024 profit and equity for deferred tax on specific provisions, which lifts 2024 ROE to 16.8% and puts 2025 at 17.0% [1 p.184] [18]. The restatement added BDT 574m, 673m, 1,191m and 2,049m to profit in 2021-2024 [18]: in 2024 the restatement alone adds 7.3pp of ROE, a tax accounting change, not more business. ROA was 1.1-1.3% on the restated basis [18].

Efficiency. Cost/income fell from 43-48% (2017-2023) to 34.9% in 2025 [18], as investment income grew faster than costs. Operating profit per employee rose from BDT 2.98m (2021) to 5.29m (2025) [1 p.184].

Liquidity. Loans/deposits fell from 103.1% at Dec-2023 to 82.8% at Jun-2026; the BB-defined credit-deposit ratio was 74.87% at Dec-2025 [1 p.362] [18]. The bank has room to lend, but chose bonds.

Leverage and capital. Equity was 7.1% of assets at Jun-2026 [18]. CRAR was 13.2-13.4% in 2019-2020 and 14.8-15.9% since 2021, helped by perpetual bonds of BDT 5bn and subordinated bonds (BDT 2.4bn at Dec-2025; a further BDT 2.6bn issued in H1 2026) [3 p.170] [1 p.263] [2 p.11]. Tier-1 fell from 13.67% to 12.27% in 2025 as risk-weighted assets grew 20.7% to BDT 256.8bn [1 p.183].

Balance sheet: government securities rose to 26% of assets, and 15 borrowers hold about a third of loans

Balance sheet. At Jun-2026 the standalone balance sheet was BDT 429.4bn: loans BDT 269.6bn, government securities BDT 112.9bn, other investments BDT 8.8bn, cash and bank balances BDT 21.7bn [2 p.8]. Funding was deposits BDT 325.7bn, borrowings BDT 25.4bn, subordinated and perpetual bonds BDT 10.0bn and equity BDT 30.4bn [2 p.8]. Off-balance sheet exposures were BDT 171.7bn, mainly acceptances, guarantees and letters of credit [2 p.9].

Concentration. The 15 large borrowers above 10% of capital held BDT 92.1bn, about 35% of loans at Dec-2025 [1 p.299]. Interest income in cash: H1 2026 interest received in cash was BDT 17.7bn against interest income of BDT 13.4bn, because the cash figure includes investment interest [2 p.11]; the F01 interest-cash-conversion test cannot be run cleanly from the interim.

Cash flow. Operating cash flow was BDT 7.8bn in H1 2026 against 12.6bn a year earlier, as the bank bought BDT 12.6bn of trading securities and lent BDT 6.9bn more [2 p.11]. The BDT 1,888m cash dividend for 2025 was paid in H1 2026 [2 p.11].

Subsidiaries: the brokerage lost BDT 95m on margin-loan provisions; the group earns less than the bank alone

NCC Bank has two subsidiaries. NCCB Securities and Financial Services Ltd (brokerage and margin lending) had operating income of BDT 308m in 2025 but provisions of BDT 280m on margin loans and shares, and lost BDT 95.4m after tax, against a BDT 3.2m profit in 2024 [1 p.396]. It holds full provision of Tk92.0 crore against negative equity in margin accounts, under a BSEC time extension [1 p.411]. NCCB Capital Ltd (merchant banking) lost Tk57,316 in 2025 [1 p.425]. The auditor called both immaterial to the group [1 p.253], and group profit (BDT 4,766m) was below the bank's own (BDT 4,861m) [1 p.361] [1 p.265].

So the subsidiaries take away rather than add: 2.0% of bank profit in 2025 [18]. There is no exchange house, asset manager or mobile financial service in the group that would change that. For investors the practical point is that consolidated and standalone EPS differ slightly (H1 2026: 2.08 vs 2.04) [2 p.4] [2 p.10], and the DSE-announced figures are consolidated.

Dividend rule: paid-up capital of Tk1,155 crore is 42% below Tk2,000 crore, so FY2026 cash dividends are barred

The rule. BB's SPCD Circular No. 06 of 23 May 2026 says a bank whose paid-up capital is below Tk2,000 crore may not declare any cash dividend, and banks above it may pay at most 50% of their total declared dividend in cash. It applies to dividends for the year ending 31 December 2026 and later, and DOS Circular 01 of March 2025 stays in force [6 p.1].

Where NCC stands. Paid-up capital was Tk1,110 crore through 2023-2025 and Tk1,154.8 crore after the 4% stock dividend for 2025 [1 p.183] [2 p.8]. The gap to Tk2,000 crore is BDT 8,452m, or 73.2% more shares [18]. Authorised capital is exactly Tk2,000 crore [1 p.183], so the bank would also need shareholders to raise the authorised limit before it could issue that much. For comparison Pubali Bank is at Tk1,562 crore [10 p.6].

The routes, by arithmetic only. Stock dividends of 20% a year would take about 3 years, 10% a year about 6 years, and the 2025 rate of 4% about 14 years [18]. Stock dividends move retained earnings into paid-up capital; BDT 8,452m is 1.7 times 2025 profit. A rights issue at par would need BDT 8,452m of new cash. A merger with another bank would also add paid-up capital. The bank has announced none of these; the September 2026 EGM dealt with articles on the chairman [13] [12].

Dividend history. Cash dividends were 5-17% of par in 2019-2025, with stock dividends of 0-7.5% [3 p.171] [1 p.184]. The 2025 dividend, 17% cash and 4% stock (21% total), was approved by shareholders [16]; the BDT 1,888m cash was 38.8% of 2025 profit [2 p.11] [18]. From FY2026 the cash part goes to zero unless the threshold is met, so equity will build faster than before.

Governance and capital actions: a chairman-rule EGM, a new auditor, a sub-debt issue and an Islamic-branch plan; no rights issue or merger announced

Capital actions over the last 24 months (from DSE announcements and press):

Board and control. The September 2026 EGM approved changes to the articles that rotate the chair to the longest-serving shareholder-director and allow the board to remove a chairman by a two-thirds vote, subject to BB approval [12] [13]. NCC's board was not dissolved or reconstituted by BB in the period, and we found no BB merger or watch-list action on the T2 sources. A sponsor, MA Quasem, has been selling shares [15]. The auditor changed from ACNABIN (2024) to Mahfel Huq & Co. (2025) [1 p.254]; the 2025 opinion is unmodified with the emphasis of matter on the writ provisions and the restatement [1 p.252].

What's next: Q3 filing, writ cases, treasury yields and how the FY2026 dividend is paid

Risks: writ-stayed and SMA loans, treasury yields and deposit costs matter most

Each risk below is tied to the line it moves. Size them against 2025 profit before provisions of BDT 13,074m and equity of BDT 30.2bn [18].

Key questions: NPL durability, the writ loans, NII and the route to Tk2,000 crore

NCCBANK at BDT 15.4 trades at 0.59x Jun-2026 standalone NAV and 3.7x FY2025 EPS on the post-bonus share count [17] [18]. On the illustrative writ-adjusted book of BDT 22.49 a share the multiple is 0.68x. The company reported year-end P/E of 2.7-5.3x for 2021-2025 [1 p.184]. These are facts about the price, not a view on it.

FAQ

What is NCC Bank's NPL ratio?

4.12% at 31-Dec-2025 and 4.17% at 30-Jun-2026, down from 7.32% at Dec-2024 after BDT 9,897m of write-offs [1 p.183] [2 p.18] [1 p.313].

Does NCC Bank have a provision shortfall or BB deferral?

None is reported. Provision on Tk507.92 crore of writ-stayed loans (Tk89.05 crore) is held under a BB no-objection letter, which the auditor emphasised [1 p.252] [1 p.300].

Can NCC Bank pay a cash dividend for 2026?

Not under SPCD Circular 06 while paid-up capital (Tk1,155 crore) is below Tk2,000 crore [6 p.1] [2 p.8].

What is NCC Bank's capital adequacy?

CRAR 15.54% and Tier-1 12.27% at Dec-2025 [1 p.183].

What subsidiaries does NCC Bank have?

NCCB Securities and Financial Services (lost BDT 95m in 2025) and NCCB Capital [1 p.396] [1 p.425].

Which results does this report use?

Standalone annual statements 2017-2025 and the unaudited H1 2026 statements. Q3 2026 figures are from the DSE announcement; the Q3 filing is not yet in our corpus.

Sources

1. National Credit and Commerce Bank PLC Annual Report 2025 (year to 31-Dec-2025) · link · accessed 2026-10-31
2. NCC Bank unaudited financial statements, six months to 30-Jun-2026 · link · accessed 2026-10-31
3. NCC Bank Annual Report 2023 (five-year data 2019-2023) · link · accessed 2026-10-31
4. NCC Bank audited financial statements 2020 (with 2019 comparatives) · link · accessed 2026-10-31
5. NCC Bank audited financial statements 2018 (with 2017 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. Prime Bank PLC Annual Report 2025 (peer NPL) · link · accessed 2026-10-31
8. Jamuna Bank PLC Annual Report 2025 (peer NPL, cost of deposits) · link · accessed 2026-10-31
9. Bank Asia PLC Annual Report 2025 (peer NPL, CRAR) · link · accessed 2026-10-31
10. Pubali Bank PLC unaudited statements, nine months to 30-Sep-2026 (peer paid-up capital) · link · accessed 2026-10-31
11. DSE announcements via AnalystBro events: Q3 2026 results (28-Oct-2026), EGM 15-Sep-2026, record date 20-Aug-2026 · link · accessed 2026-10-31
12. The Business Standard, 'NCC Bank moves to empower board to remove chairman by vote' (18-Aug-2026) · link · accessed 2026-10-31
13. The Business Standard, 'NCC Bank approves amendment to articles at 12th EGM' (Sep-2026) · link · accessed 2026-10-31
14. The Business Standard, 'NCC Bank to expand Shariah-compliant footprint with 20 new branches' (19-Aug-2026) · link · accessed 2026-10-31
15. The Business Standard, 'Directors of NCC, Dhaka, Pubali Bank announce major share buy-sell plans' (4-Oct-2026) · link · accessed 2026-10-31
16. The Business Standard, 'NCC Bank approves 21% dividend for 2025' · link · accessed 2026-10-31
17. AnalystBro price data (TradingView feed): DSE:NCCBANK weekly bars to 29-Oct-2026 · link · accessed 2026-10-31
18. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31