Commercial Bank finalising growth plans in Bangladesh

The Commercial Bank, the first bank from Sri Lanka to start operations in Bangladesh over two decades ago, has ambitious plans to expand horizontally and vertically.

“Within our core business, we still have room to grow within our small and medium enterprise and retail businesses. With the help of digitalisation, we are planning to grow in both these sectors,” Najith Meewanage, CEO Commercial Bank, Bangladesh told the Business Times in Dhaka recently. The bank is also looking for opportunities in capital markets and custodian services.

Without disclosing too many plans, Mr. Meewanage said that the growth agenda is on the cards, starting next year for the only bank from Sri Lanka in Bangladesh.

The bank showed stellar performances despite the challenges last year, he said noting that the bank managed to keep the growth momentum which jumped substantially from the previous year with the balance sheet hovering above Rs. 1 billion.

The capital adequacy ratio of Commercial Bank Bangladesh is well above industry standards at 40 per cent, he added. “This shows our stability in our sector.”

The major challenge in the banking industry in Bangladesh is the non-performing loans. The industry standard is about 10 per cent but Commercial Bank Bangladesh has NPL's around 1 per cent, which shows the asset quality, Mr. Meewanage said.

Having acquired Credit Agricole Indosuez in 2003, the Commercial Bank entered Bangladesh with four branches. Now it has expanded to 20 branches becoming the largest regional bank in the country.

The banking industry in Bangladesh is very competitive, with more than 60 banks in the country, Mr. Meewanage said. All these banks have more than 10,000 branches in the country.

However, Mr. Meewanage said that with proper strategies, one can be successful in Bangladesh as the country poses immense potential. He attributes Commercial Bank’s success to prudent fiscal management, strategic investment, robust revenue generation strategies, and forecasting situations accurately.

The banking sector in the country is very much regulated, he said, noting that the directions for each bank have been laid out clearly and precisely by the regulator.

Mr. Meewanage noted that the challenges Bangladesh is going through currently, is a temporary setback. “There is a bit of stress on dollar liquidity. The country is still growing in exports, and with strong dollar remittances, the country's aim to be in the US $ 1 trillion economy in the next decade can be achieved.”