UCB eyes top spot in profitability with strong rebound

Following a significant turnaround from prolonged liquidity stress, United Commercial Bank (UCB) now sets its sights on becoming one of Bangladesh's most profitable commercial banks within the next three to four years, said its Managing Director and CEO Mohammad Mamdudur Rashid.

In an exclusive interview with The Financial Express (FE), he reflected on the bank's recent transformation and laid out its roadmap for sustainable growth, as it marks its 42nd founding anniversary.

The first-generation private commercial bank, once reeling under stress, has taken bold steps to regain its footing. With a sharp focus on human capital, customer confidence, deposit mobilisation, and asset quality, UCB has already made visible progress in turning around its fortunes.

"We have revitalised our human resources through regular communication and motivation," said Mr Rashid. "Our team now firmly believes in the rebound and is committed to driving progress."

The bank has also worked to rebuild public trust by launching targeted deposit campaigns and ensuring customers' liquidity needs are met promptly -- whether through branch services, ATM booths, or cheque clearing.

These efforts, Mr Rashid noted, have played a key role in restoring client confidence.

"Customer sentiment was once negative. But by ensuring that every legitimate need is addressed quickly and reliably, we have transformed that into a positive mindset," he said.

To consolidate this turnaround, UCB has set ambitious priorities for 2025. The bank targets net deposit growth of Tk 120 billion for the year, up from Tk 40 billion in 2024.

As of 24 June, it had already achieved Tk 64 billion in net deposit growth and is on track to meet its target by year-end.

Mr Rashid, who took over as the bank's top executive on September 30, 2024, pointed out that approximately 80 per cent of these deposits come from retail and SME customers.

"This makes our deposit base inherently more stable and less volatile than relying heavily on corporates, which are often sensitive to interest rate movements."

UCB has also seen encouraging momentum in new account growth. From 2.2 million account holders in 2024, the bank has added around 0.3 million new accounts in just the first six months of this year -- representing a 14 per cent growth in a short period.

"These are strong indicators of regained trust and improved brand strength.

Our efforts are paying off," said the UCB CEO.

Mr Rashid took charge during a particularly volatile period in the country's banking sector -- shortly after the July-August mass uprising and a shift in political power.

At that time, UCB was struggling with a critical shortfall in its cash reserve ratio (CRR) -- to the tune of Tk 10 billion.

"On my second day in office, I set a Tk 1.28 billion deposit target for our 128 branches to be achieved in just four working days," he recalled. "We ended up collecting Tk 4.09 billion -- an overwhelming response that reaffirmed our customers' trust."

He also focused on morale-building within the bank. "After being branded problematic due to heavy cash outflows, staff were demoralised and feared job losses. I maintained regular communication, shared targets transparently, and encouraged a results-driven mindset."

"We needed to transform that negative energy into positive momentum. Alhamdulillah, we have succeeded -- and the results are clearly visible."

Beyond deposits, UCB is also working to repair its loan portfolio and asset base. The ratio of non-performing loans (NPLs) had surged to 18 per cent by March 2025. However, the bank now has a clear plan to reduce that figure to 5.0 per cent within the next five years.

To achieve this, the bank is intensifying its cash recovery process and strengthening its loan recovery and legal support teams. "A substantial reduction in NPLs is expected this year and next," Mr Rashid said.

He acknowledged, however, that restoring the bank's overall asset quality will take time. "It will likely take another two to three years to fully repair the asset dent. We are using operating profits to meet provisioning needs."

To support its growth ambitions, UCB is also working to bolster its capital base. The bank has decided to double its paid-up capital from Tk 15.5 billion by the end of next year through rights issues and by onboarding strategic partners, as disclosed in a PSI (price-sensitive information) notice.

Also, it plans to raise Tk 10 billion from the market next year by issuing its sixth subordinated bond, which will strengthen the bank's tier-2 capital.

"These initiatives will boost our capital base by 60 per cent, significantly enhancing our capital adequacy and lending capacity," he noted.

With a refreshed brand, renewed workforce, improved asset strategies, and a clear focus on profitability, UCB is optimistic about its future.

"I firmly believe UCB will emerge as a leading profit-making lender in Bangladesh within the next three to four years," Mr Rashid concluded.

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