Banks’ CSR spending drops as bad loans surge

Corporate social responsibility (CSR) spending by Bangladesh's banks nearly halved in the first half of 2025 amid rising bad loans, according to Bangladesh Bank's (BB) half-yearly report on CSR activities of scheduled banks and non-bank financial institutions.

Banks spent around Tk 151 crore on CSR from January to June this year, down from Tk 309 crore in the same period last year, the report shows.

About half of this expenditure was directed towards disaster management, particularly flood-related initiatives. Education accounted for 23 percent, health for 19 percent, while the remainder went to the environment, sports, and miscellaneous causes.

Analysis of the central bank report shows that almost all banks reduced their CSR spending, regardless of whether their profits rose or fell. While some banks struggled to make profits last year, several top lenders saw their earnings grow, yet most kept CSR spending limited.

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Mercantile Bank, which has consistently ranked among the top CSR contributors in recent half-yearly reports, led the spending in the first half of 2025, allocating around Tk 24 crore despite posting a profit of Tk 63 crore last year.

About half of this expenditure was directed towards disaster management, particularly flood-related initiatives

Shahjalal Islami Bank spent approximately Tk 14 crore, followed by Jamuna Bank with Tk 12 crore and Premier Bank with Tk 11 crore.

BANKS WITH ZERO SPENDING

Meanwhile, the number of banks that did not spend anything on CSR increased from seven in 2024 to 13 in 2025.

Banks that reported zero CSR spending this year are: Janata Bank, Agrani Bank, BASIC Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Commerce Bank, Community Bank, National Bank, Global Islami Bank, Padma Bank, SBAC Bank, Union Bank, and the National Bank of Pakistan.

Traditionally, banks like Al-Arafah Islami Bank, Exim Bank, First Security Islami Bank, Islami Bank, Social Islami Bank (SIBL), Southeast Bank, Union Bank, and United Commercial Bank contributed significant amounts to CSR.

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However, this year their spending fell by over 50 percent, with some allocating almost nothing due to the burden of bad loans. For instance, Exim Bank spent around Tk 7 crore and SIBL Tk 2 crore. Both are among the five struggling Shariah-based banks approved for merger by BB.

The plunge in CSR spending mirrors the growing problem of toxic loans in the banking sector, which started to come to light following the political changeover in August 2024.

According to BB data, bad loans reached a record Tk 420,335 crore at the end of March 2025. Total loans in the sector stood at Tk 17,41,992 crore, of which 24.13 percent had turned sour.