When some local banks are struggling to survive amid rising loan irregularities and deteriorating governance, City Bank stands tall with a difference, be it adoption of technology, consumer and retail banking and ensuring global standards.
Compliance and quality services have served the bank well.
The International Finance Corporation, the private sector lending arm of the World Bank Group, has bought equity shares in the bank and sits in its board, an achievement many local banks dream of.
City Bank, established 35 years ago as one of the country's first private commercial banks, now aims even higher.
“We are now dreaming to have a global presence within the next 10 years as we have already achieved a tremendous result in the local market,” said its Managing Director Sohail RK Hussain, in an interview with The Daily Star last week.
The bank, which has asset worth $3.5 billion as of February this year, has stayed ahead of many of its peers in many aspects.
It offers a well-diversified portfolio of financial services, including retail banking, commercial banking, SME banking, and internet banking.
The bank is more technologically-advanced than its peers and is the only PCI-DSS (payment card industry data security standard) certified bank in Bangladesh.
The PCI-DSS is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure standard.
The private commercial lender has financed power plants with generation capacity of about 2,000 megawatts of electricity in the last five years.
Credit and debit card was launched in the country 25 years ago and foreign banks had dominated the business for long.
The City Bank secured the No. 1 position in 2015 in the business because of its visionary programme, said Hussain, also a vice-chairman of the Association of Bankers, Bangladesh, a forum of chief executives of private banks.
The banks issued about 3.70 lakh credit cards, 7 lakh debit cards, 16,000 PoS terminals as of March this year.
The City Bank is also one of the leading banks that have segmented the banking business to cater different genres of clients.
Majority of banks did not have any IT focus 17 years ago, but City Bank took a different route as it ventured in to make the banking service convenient to the clients in 2000.
The bank is now holding one of the top positions in extending the internet banking services to clients.
City Touch, the internet banking product of the bank, has already been recognised by well reputed foreign institutions.
“Previously, people had feared to interact with banks to get service. But we have changed the attitude by introducing different segments of banking services,” Hussain said.
Most of the banks started the internet banking service through the software of the laptop, but City Bank introduced the service based on easily downloadable smartphone apps.
The bank was awarded the best digital bank award by the government and the Singapore Monitory Authority, the central bank of Singapore, for adopting IT applications in the ASEAN region.
Hussain said the start-up financing unit of the bank has also got a wonderful success by way of offering banking services to new companies.
The bank holds the pole position when it comes to extending financing to start-ups.
“Historically, the bank gave a low focus on retail banking. But, we started to provide importance to the retail banking since 2000.”
Two and a half years ago, the bank became the first lender in the country by launching a separate commercial banking service unit with a view to helping family-owned businesses thrive and cope up with changing business scenario.
Family-owned enterprises—the business volumes of many of which have touched Tk 1,000 crore—get both financing and advisory support from the bank.
The family members of the businesses may not be able to inject equity in the future which may create troubles for them to run their business, according to Hussain.
The bank is advising companies on how to get loans from foreign sources and raise capital from equity markets.
The bank will set up a subsidiary to give a boost to e-commerce transaction within next decade as customers' requirement will change significantly in the future.
The bank plans to raise its number of debit and credit cards to 30 lakh and set up 5 lakh points of sales terminals in the next 10 years to expedite e-commerce transaction, he said.
The bank has taken initiative to extend its SME banking with support from the IFC, which holds five percent shares in the bank.
The IFC and the bank are now jointly taking initiative to improve the technology-based service.
The bank is now focusing on the SME service based on technology. It will allow clients to get a loan within two to three hours after submitting their application, Hussain said.
The IFC has started restructuring its SME and retail banking business based on the experience of successful customers of other countries.
“We want to hold the number one position in the SME business within the next three years. We strongly believe that we can do it with the help from the IFC,” he said.
Eighteen officials of the IFC are now working in the bank, continuously contributing to the bank's growth.
Hussain also touched upon a number of issues confronting the banking sector.
Talking about the latest upward trend of interest rate on lending and deposit, he said a number of banks are now facing liquidity pressure because of the emergence of a deposit imbalance between the private banks and state lenders.
The government's savings tools have been offering 10.50-11 percent interest, which are encouraging people to park their deposits with the high-yielded instruments.
The state-owned enterprises have recently shifted their deposits to state-run banks from private banks.
But, the state lenders cannot invest their fund in the productive sector because of high non-performing loans and lack of corporate governances, said Hussain.
Against the backdrop, the state lenders bought a large amount of treasury bills and bonds where the depositors fund are stuck.
The liquidity pressure will ease if the government agencies park a sufficient amount of funds with private banks, according to Hussain.
He, however, said that the state-owned enterprises should park their deposits in private banks that have a good CAMELS rating.
“We have to take prompt measures to avoid further financial scam in the banking sector, as future shock will put an adverse impact on the industry.”
Hussain said Bangladesh is now a role model but it is not enough.
Areas such as doing business index, corporate governance, and cyber security should get more focus.
Four more new banks could enter the banking industry and licences could be given but fourth generation banks have suffering from governance issues.
“We should not repeat the problem as further large scale scam will hurt the confidence in the banking sector,” he said.
Hussain is very optimistic about the country.
“The country's sovereign rating is now Ba3 as per Moody's evaluation. I hope that Bangladesh will become a full-fledged middle income country in a decade when its rating will strengthen automatically.”
The bank will also achieve a Ba1 or Ba2 score similar to the domestic rating, Hussain said.
Hussain holds an MBA degree in marketing from the Institute of Business Administration under Dhaka University.
He started his career in 1990 with ANZ Grindlays Bank and also worked for Standard Chartered Grindlays Bank Bangladesh and Eastern Bank Ltd before joining City Bank in 2007.