2024 will be challenging for banks, says Dhaka Bank chief

Dhaka Bank Limited has taken necessary preparatory measures to proceed smoothly in the coming days, as next year (2024) will be very crucial for the country's banking industry, its chairman Abdul Hai Sarkar said.

In an exclusive interview with The Financial Express (FE), he said the coming year seems to be very challenging because of the ongoing volatility in foreign currency situation and possible developments over the upcoming general election, which would possibly impact banking operations here.

"We need to focus on preparatory steps that our bank has already started taking, so that we can proceed smoothly," the Dhaka Bank chairman told the FE on the eve of its 28th founding anniversary, to be celebrated today (Wednesday).

He said proper adjustment is the key to sustainable banking operations, as changes - coming from economic, political and environmental affairs - would impact banking operations.

"We've to plan our things in a way so that we can overcome all kinds of impediments, fluctuations or challenges, and we are good in adjustment."

Mr Sarkar noted that the second generation bank started its operations in 1995, but its journey was not always smooth, and most of the time it was bumpy, which has not finished yet.

"But we know how to adjust ourselves to overcome those challenges."

Terming the market very competitive, the Dhaka Bank chairman said too many banks are operating business here.

"So, the competition is tough, and we need to be very careful with proper planning and timely execution to be sustainable in the highly competitive market. That's what we're doing now."

Sharing future strategy of the bank, Mr. Sarkar said they have chalked out plan of actions to become the country's leading private commercial bank (PCB) in a span of next four years by intensifying focus on digital transformation.

He opined that the bank has two major strengths - dedicated board members and sound corporate practices - which would help achieve the landmark within the projected timeframe.

Most of its board members are businessman having a legacy of good business. They are committed to contribute to the socio-economic development of the country, he said.

"It's not that we have to take money from the bank for our daily living. We want to see the bank on the top in all indicators by practicing the best corporate culture."

Sharing another strong part of the bank, its chairman said usually they do not hire any executive from outside.

"We groom up executives from our own. Our current managing director (MD) joined the bank in 1997. So, we've created a culture where anyone can join and end his/her career by becoming the MD."

Terming NPL (non-performing loan) a major challenge for the banking system, he said before granting loan to someone they cross-check many things, like the client's social status, behaviour, financial position, successors, etc.

Despite strict screening during the loan approval process, some of the clients might become defaulters, and the government should further intensify its monitoring of judicial system for ensuring faster disposal of the (loan-related) cases, Mr. Sarkar suggested.

About digital transformation, he said it requires huge investment to create digital infrastructure, and the bank is investing in it to make its services suitable for tech-savvy young generation.

"Gradually, we're changing ourselves from traditional banking to digital services. Without such transformation, none can survive in this highly digital era. This is a must," he added.

Dhaka Bank Limited serves a large customer base - comprising individuals and institutions - through a network of 113 branches and 25 sub-branches across the country.

Until 2022, the bank's deposit portfolio stood at Tk 243.43 billion, while the volume of its loans and advances was Tk 239.69 billion.

It bagged export proceeds amounting to Tk 168.67 billion and paid import bills equivalent to Tk 206.32 billion. It also received inward remittance amounting to Tk 43.91 billion in 2022.

The bank earned net profit amounting to Tk 1.66 billion in the year.

[email protected]