The Brief.

Seven consecutive prints of NPL at 35.73% and CAR at 1.56% confirm the system is in stasis — neither recovering nor deteriorating in reported figures. HSBC Bangladesh's 23% profit decline on higher loan-loss provisions marks a new phase: contagion reaching the foreign-bank tier, where provisioning discipline is stricter and losses cannot be deferred. The SIBL merger proceeding with ex-owners locked out is the restructuring playbook advancing, but without recapitalisation capital, forced mergers redistribute distressed assets rather than absorb them. Budget session opening June 7 is the next potential catalyst — the desk needs to see the FY26 recapitalisation allocation before repositioning. The ~BDT 1.4tn provisioning shortfall remains the central fact of BD banking.

The trade gap widening 24% to -$3.14B anchored the week's external-sector narrative — imports outpacing the $3.17B export base by nearly 2:1. Reserves at $34.12B are pre-ACU; the $1.51B March-April settlement will mechanically compress them toward $32.6B, making next week's post-settlement print the key position driver. Remittance surging to $3.76B and financial account surplus at $3.81B Jul-Mar provide the structural offset keeping the peg defensible, but volatile inflow categories cannot be relied upon to cover a persistent trade deficit. USD/BDT held 122.75 through every session this week — the peg is intact at current reserve levels, but the margin narrows materially once ACU settlement clears.