The year 2020 was a challenging year for the bank
From a record profit of Nu 1.2bn in 2019, the net profit of the Bank of Bhutan Limited (BoBL) in 2020 was Nu 87.52mn.
The decrease in profit is by 93% as compared to the previous year. In 2018 the bank recorded a profit of Nu 1.04bn.
In terms of financial performance, the year 2020 was a challenging year for the bank.
The officials from the bank said that the year 2020 was a tumultuous year with challenges that are unprecedented for not only the bank and its stakeholders, but for the Bhutanese economy as a whole due to the COVID-19 pandemic.
Officials said that the country continues to deal with the economic downturn triggered by the impact of the COVID-19 due to which the country’s Gross Domestic Product experienced negative growth of 6.8%.
“Last year it could be one of the lowest financial performances as compared to the previous years,” an official said.
Bank officials also said that through the loan interest waiver and loan repayment deferment, the bank managed to maintain non-performing loan (NPL) at 7.17% amounting to Nu 3.51bn as of December 31, 2020.
In 2019 the NPL was at 3.61%.
Last year the housing sector had the highest NPL amounting to Nu 1.088bn increased drastically compared to the previous year, followed by the transport sector amounting to Nu 0.78bn.
Bank officials said that the reason for the highest NPL in the housing sector and drastic increase maybe because of the loan deferment as this sector was the highest beneficiary in terms of deferment.
Similarly, in 2019 the housing sector had the NPL amounting to Nu 0.66bn followed by the transport sector amounting to Nu 0.454bn.
In 2020, the bank’s credit portfolio saw a modest growth of 9.96% against the overall country’s credit growth of 7.42%. Its credit growth was 23.30% in 2019.
The loan portfolio has increased by 10% from Nu 44.70bn in 2019 to Nu 49.15bn in 2020.
The non-performing assets increased from 3.61% in 2019 to 7.09% in 2020.
The bank had waived off an interest income of Nu 496.97mn and an interest rebate of Nu 7.58mn as part of the Monetary Relief Measures initiated by His Majesty The King.
During the pandemic, the bank had also financed for import of essential commodities amounting to Nu 195.07mn, short-term working capital financing for tourism-related business amounting to Nu 541.30mn and term based working capital financing to manufacturing industries for import of raw materials amounting to Nu 463.52mn at the concessional interest of 5%.
Bank officials said that the deposits from customers continued to grow and have increased from Nu 59.24bn in 2019 to Nu 77.59bn in 2020.
“This confirms the people’s continued confidence and trust in the bank,” officials said.
The total capital and reserves of the bank have decreased by 9.51% last year.
Dechen Dolkar from Thimphu