Brac Bank's deposit and loan growth is way above the industry trend in 2022. What factors contributed to this growth despite challenging market conditions?
This is not something that happened in a year. This is a result of years of hard work.
This very strong growth reflected in 2022, is well above the average deposit growth of the market and also the average loan growth of the market as well.
It happened for a number of reasons -- over the last 5-6 years we significantly enhanced our infrastructures. By infrastructure I mean not only physical infrastructures but technology, people, the skillset of our people, quality of our people, training of our people, process and overall brand equity of our company itself.
As a result, if you look at Brac Bank today, you see, for example, credit ratings which are the highest in the market, both nationally and internationally.
Most of the time, it is the trust of customers in our bank, which we earned gradually. This is one of the biggest reasons for our continued success.
How does Brac Bank plan to remain competitive, could you explain a bit more about your policy and loan portfolio?
If you look at our financial results, we are at the top of the pile. Maybe one or two banks could come close, but our financials are best in the market.
We have the highest profitability year after year, thanks to our risk management. Our non-performing loans (NPLs) are also very low.
Our business is also very diverse. If you look at Brac Bank's total loan portfolio, you will see how diversified it is.
In our business, roughly 50% plus is small and medium enterprise (SME) assets. Then, 32% is corporate commercial and the remaining 18% retail.
These three main aspects, which we call in banking words "client segment"; you will never find such arrangements in any other bank in Bangladesh.
As a result, our business is relatively quite granular and there is very minimal concentration risk in our business.
The banking sector in Bangladesh has been affected by the recent surge in NPLs. How has Brac Bank been able to avoid this?
You will see that many banks lent a very large amount of money to a few but large industrial groups. This is what we call high concentration of risk, because if one of them (loan repayment) is missed, the bank has to suffer from various adverse situations.
On the other hand, we give utmost importance to micro loans. This, of course, was our main goal from the beginning, and is still the case today.
You have been in this position at Brac Bank since November 2015. How is the structure and philosophy of the bank different from the others in the market?
As I said at the beginning, the trust of customers is paramount.
One of the reasons behind this confidence is the institutional ownership of Brac bank.
There is no business ownership (business group or group of companies) here, as 46% of it is owned by an NGO like Brac.
In addition, 36% of our board is owned by international investors.
A large part of them are North American and European. The remaining 17-18% are local investors.
As a result our board is at least professionally managed.
Our chairman is also an independent director. You will not see this in any other bank in Bangladesh.
What measures have you taken to support your customers and ensure business continuity in the post-pandemic situation, especially fintech and digital banking?
We have been doing digital transformation at Brac Bank for four to five years.
We started this plan in 2018. It started working in 2019.
Post-Covid-19, the behaviour of our customers has changed drastically. More and more customers are moving towards digital platforms.
To give you an idea, at the beginning of 2020, out of the total transactions in the Brac bank, roughly 16-17%, or 18% of the transactions were digital.
Now this figure is 70%.
As a result of digitization, on the one hand, as the transaction time is reduced, the operation cost is also reduced.
Besides, the auditability of the entire transaction process becomes very strong.
In digital, there are two types of transactions online and cad based, both types of transactions have increased.
Our App Astha is the best in the market. We are also constantly thinking about the security of customers' online banking.
Our digital support team is constantly updating themselves for this.
