Foreign Banks Pack Up in Bangladesh: What’s Behind the Exit?

Following HSBC, Standard Chartered has now announced the closure of its retail banking operations in Bangladesh. These banks are withdrawing from 'high-cost, low-margin' business segments, such as providing small-scale loans or credit cards to individual consumers.

After HSBC, another major global bank, Standard Chartered, has decided to wind down its retail banking operations in Bangladesh. Through retail banking, banks provide services directly to individual customers, including savings accounts, fixed deposits, loans, and digital or credit card offerings.

A report by the Dhaka-based news portal Prothomalo.com notes that foreign banks are pulling out of retail banking in Bangladesh at a time when the country's banking sector is grappling with non-performing loans (NPLs), capital shortages, weak corporate governance, and various irregularities. The banking sector in Bangladesh is currently facing a deep crisis.

According to data from Bangladesh Bank, as of 2026, approximately one-third of the country's total bank loans are classified as non-performing. In other words, about 33% of the total credit extended by Bangladeshi banks this year is on the verge of default. An NPL signifies that the funds lent by banks are not being recovered.

Bangladesh’s Banking Sector in Deep Crisis

The credibility of the country's banking system has also been eroded by issues such as the issuance of unsecured loans under political influence, nepotism, and a lack of strict action against major defaulters. Global banks tend to avoid operating in such unstable and high-risk environments. However, this trend is not limited to Bangladesh; globally, these banks are reallocating capital to select markets that offer higher returns with lower risk. HSBC has also withdrawn from retail banking in countries such as Australia and Sri Lanka.

Impact on Bangladesh’s Economy

Institutions like the World Bank have strongly advised Bangladesh to improve transparency and financial stability within its banking system. The simultaneous exit of two major international banks from the country’s retail sector sends a negative signal to foreign investors and global markets. This is likely to spook investors, damaging Bangladesh’s reputation. Meanwhile, experts believe that the withdrawal of these large foreign banks could present an opportunity for strong local banks in Bangladesh to expand their reach by acquiring retail customer bases and credit card portfolios.