AB Bank aims to expand services to all corners of Bangladesh

AB Bank, formerly Arab Bangladesh Bank, the country’s first private bank, started on April 12, 1982 with the motto “achieving excellence” and has been one of the country’s leading banks ever since.

The journey, however, has not been easy. Despite numerous changes and challenges, the bank has maintained its position as an innovative institution with a focus on technology. In the last three years, the bank has been on a path of reactivation, expanding its services and obtaining good scores.

On the occasion of the bank’s 40th anniversary, Tarique Afzal, CEO of AB Bank, spoke with Sakhawat Prince and Tonmoy Modak of The Business Standard about the current state of the banks, their own situation, their customer-centric services and their future plans.

What is AB Bank’s overall financial position?

AB Bank loan amount in 2018 was Tk22,540 crore. The company’s debt stood at Tk27,034 crore in three years. During this time, our growth has been over 20%. Also, the amount of our deposits in 2018 was Tk24,745 crore

What initiatives did AB Bank take to expand its customer services?

AB Bank has successfully launched Internet banking, SMS banking, state-of-the-art information communication technology, appropriate network solutions, 24/7 ATM services and various electronic services to achieve excellence in this new era of technological advances. .

AB Bank has greatly expanded its services at home and abroad in the last four decades. It currently has 105 branches. It has an overseas branch in Mumbai, India and more than 260 ATMs across the country. The core banking operation involves five subsidiaries, a foreign banking unit, and custody services. The bank has established a representative office in Yangon in Myanmar to expand its operations abroad.

What role did AB Bank play during the Covid-19 pandemic?

Like other countries in the world, Bangladesh also faced a volatile situation during the pandemic. Everyone faced problems and no one was prepared for it. The prime minister’s stimulus packages kept the economy afloat and helped revive it.

We gave a grade seven salary to garment employees. AB Bank has managed to distribute almost all targets of all types of incentive packages.

How was it possible for the ADR (advance/decline ratio) to change from 100% to 86.26% in three years?

The central bank’s policy is that the ADR should be 87%. [ADR compares the number of stocks that increased in value to the number of stocks that decreased in value].

One of the reasons our ADR has gone down in the last three years is because our deposits have gone up. We basically work in a regulated environment. The change in our image over the last three years, especially with the new board, has increased customer confidence in us. For these reasons, our retail deposits have increased.

We have also brought new products to the market. Overall, our deposit status has been steadily increasing every year since 2018. This is the main reason for our improvement. The mentality of our bank has also changed.

What type of client is AB Bank emphasizing for loan disbursement?

Previously, only corporate loans were granted. We’ve been able to get away from that. Currently we have increased the distribution of CMSME credits. We are also focusing on consumer and agricultural loans.

How successful is AB Bank in increasing loans and deposits?

In 2018, we reduced our bad debts from just over 33% to 13.88%. We doubled our net income in 2021 compared to 2019. Deposits, share prices or earnings per share are in a good position as we have been able to maintain the continuity of this development. Operating profit has also increased. These combinations have played a role not only for us, but also in increasing the confidence of our customers.

We also have a strong position on potential defaulters. I have filed many cases on these and have received judgments from the courts in many cases. These have helped the organization recover money and increase revenue.

For the past two years, we have been paying dividends to stock market clients with the permission of the central bank and the board. Our focus and the sincerity of the staff have achieved this in a combined effort.

Even so, we know that we are still far from where we want to be. But we are on the right track.

Based on what qualities or products do you think customers will choose AB Bank?

I think our customer service is different from others. From our call center number 16207 to our agents’ branches and bank branches or head offices for customer service, we really try to give you the best. We try to do our best to help our customers. This is our main strength and mantra.

As we are guided by this mantra, we have been able to get to the current position by handling well the situation we had in 2017-18.

What are AB Bank’s future goals?

AB Bank took 40 years to reach this stage due to customer trust, the bank’s contribution to the economy, and its current institutional form.

In this 40-year journey, AB Bank has earned the trust of customers even in difficult times thanks to the sincerity and support of everyone, including our stakeholders and the central bank. This is how we have been able to stay in the market for so long.

Our goal in the future is to provide banking services to all people in all regions of Bangladesh.

What’s your advice on the bane of financial institutions: default loans?

It is very simple. Our banks must be more vigilant. There are two easy ways to reduce bad credit. One is the establishment of good governance in the sector and the other is the expansion of small and medium-sized enterprises. Along with these, the administration also needs to help with proper and strict enforcement of the law.

If these measures are taken, default loans will be reduced in number. Doing this will create resistance against defaulters.

The expansion of small and medium enterprises will reduce the level of intentional and large defaulters in Bangladesh. If it is possible to expand small, medium and agro-industries, we will be able to spread the risks. So, in turn, as the level of risk decreases, the number of defaulters will decrease.

In addition, we know who the defaulters are. They have been identified. It is imperative that identified defaulters be disciplined.

What is AB Bank’s position on the implementation of the new wage allocation?

Increasing workers’ wages and benefits will increase our GDP. Our spinning capacity will increase, civilian capacity will increase, and the flow of money will be better. Inconsistencies in moving from one position to another will be eliminated. AB Bank has already implemented the new salary allocation scheme from April, which we have informed to Bangladesh Bank.

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