NCC Bank boss says

Banks are failing to bring down the lending rates to a single digit because of high default loans, NCC Bank Managing Director Golam Hafiz Ahmed said yesterday.
The high default loans are preventing them from turning a big amount of interest into income, Ahmed said at a press briefing at the bank's headquarters in Dhaka on the occasion of its 31st anniversary.
The banks charge more interest rates on credit to increase their profitability, Ahmed said as he presented the future plans of the bank.
NCC Bank made an operating profit of Tk 82.3 crore in the first quarter and its annual profit was Tk 379.63 crore last year.
The economy came to a near shutdown last year due to unprecedented political turmoil, obstructing all business activities at a point of no return, he said.
Ahmed said a huge fall in credit demand compelled them to release some corporate deposits to keep the spread at a tolerable level and ensure an optimum profit at the end of the year. The bank has cooperated with the clients in the past so that they can start their business afresh overcoming losses, and will continue to do so in future, Ahmed said.
In the preceding years, NCC Bank launched crash programmes, which reduced default loans, he said, adding that such steps would continue.
The bank that has 101 branches across the country plans to reach out to more areas.
The bank is financing the most in power generation, water treatment plant, roads and highways, Ahmed said. It bankrolled the Tk 350 crore Nababganj Power Plant jointly with the World Bank.
The banks and the central bank have been working together to bring the lending rates down to a single digit, NCC Bank Chairman Nurun Newaz Salim said.

The state-owned Rupali Bank Limited has been able to maintain a steady progress in its business during last four years as most of the key indicators shown upward trend.

The bank kept its development pace during the period by reducing the number of loss-making branches, disbursing more loans, opening new branches, channeling increased funds from expatriate Bangladeshis, introducing online banking and launching a number of ATM booths across the country.

With all these initiatives, the bank has been regaining its image day-by-day, bank sources claimed. It was learnt that the bank’s total deposit in 2010 was Tk 9,112.38 crore, which rose to Tk 10,723.40 crore in 2011, Tk 13,659.88 crore in 2012 and Tk 17,795 crore in 2013. The growth rate in deposit was 30.27 percent.

The amount of total loan and advance of the bank was Tk 6,604.90 crore in 2010 while it was Tk 7,652.49 crore in 2011. The amount of classified loan was Tk 790.27 crore in 2010 while it fell to Tk 310.78 crore in 2011. The bank brought Tk 2,114 crore remittance in 2011, which increased to Tk 2476 crore in 2012, sources said. In 2010, the total profit of the bank was Tk 244.69 crore while it was Tk 360.36 in 2011, Tk 370.46 crore in 2012. The bank did not open any branch before 2011. Since 2011, about 40 new branches were opened in different districts across the country. Now the bank has been operating 38 ATM boots and 131 branches.

News:Daily Sun/18-May-2014

It was also contributed by the maturity of a good number of treasury bills, compelling the government to pay back

Bangladesh Bank has introduced an innovative scheme of Tk 200 crore, where loans will be extended to the poor and banks will enjoy incentives against recovered loans, in addition to interest.
For the first time, the central bank has introduced the 'revolving refinance fund' to give low interest loans to low-income professionals, small and marginal businessmen and farmers.
On Wednesday, the central bank sent a guideline in this regard to the chief executives of all the commercial banks.
Bangladesh Bank said low-income groups will get loans from the refinance scheme to make the rural economy more vibrant through financial inclusion.
Under the scheme, a maximum of Tk 50,000 can be given as loans to an individual with no collateral.
However, each loan applicant will have to provide a personal guarantee from an adult Bangladeshi citizen from the area.
Banks can give the loans directly or through micro-credit institutions approved by the micro-credit regulatory authority.
Banks will give loans to borrowers at a maximum interest rate of 12 percent and the micro credit institutions will take a maximum of 19 percent.
The banks will take a refinancing facility from the central bank at 5 percent. The micro-credit institutes will take funds from the banks at a rate of 7 percent.
The borrower will repay the loan plus interest by a maximum of one year. However, if any borrower fails to pay back the loan, the refinance facility will be cancelled and a market based interest rate will be applicable.
However, no borrower will have to pay twice the amount of the original loan amount.
After returning the refinancing facility, banks will get a subsidy at a rate of 3.5 percent.
In the guideline, BB said farmers who possess a maximum of 2.47 acres of land and businessmen who run very small businesses would come under the purview of this scheme by opening bank accounts by initially depositing Tk 10.
Around 50 types of small and micro entrepreneurs and professionals based in para, mahalla and village like grocers, stationery shop owners, barbers, tailors, mobile top-up service providers, floating food vendors, newspaper hawkers, tea vendors, rickshaw and van drivers will fall under the scheme.

One of the most prestigious business magazines in the world, ‘Global Finance’ has recently published their list of awardees of the Best Banks in Asia Pacific for the year 2014. This list includes names of 30 banks from the Asia Pacific Region. The names of the banks have been selected through a strict survey. They have been announced based on their performances, and their services provided to their customers.
United Commercial Bank Limited, of Bangladesh has been selected as one of the Best Emerging Market Banks by Global Finance, in the Asia Pacific Region.
Over the past five years UCB has shown a gradual and impressive progress in almost all the sectors. According to the data provided by the bank the Cost-Income Ratio has increased from 39.81 in 2009 to 50.24 till 31st March the current year; the credit deposit ratio has also seen a noticeable increase from 79.37 in 2009 to 85.33 till 2014 March. Other sectors too have included improvements compared to that of the previous year.
The bank has also projected improve in the foreign trade department and capital measures. Moreover the loans and advances show the increase in provision of loan which clearly indicates improvement in the business sector of the country. The bank increased their provision for loan in Agriculture, Transport, House building, Import, Industrial and several others.
In 2012 renowned personality Muhammed Ali has been appointed as the Managing Director of the United Commercial Bank. His experience, guidance and intelligence has steered into such achievements.
On the accords of receiving this award the Managing Director of United Commercial Bank, Muhammed Ali said, ‘It is undoubtedly a privilege Since the past few years our bank has shown noticeable improvements. The main reason for this improvement is our aim to manage the balance sheet. Rather than providing huge sums of loans, we focus of providing the loans in the right sector and we keep a track of the amount lend. We intend on doing business, we move forward focusing on this. And if we continue to do so we can expect to reach a better level in the near future.’
When asked about the influence on the employees on receiving the award Mr. Muhammed Ali said, ‘The employees will not only be influence but they will also be a part of such achievements.’
He included that they hopes to improve the structure in order to have a role in strengthening the financial structure of the country.
Concluding the conversation he included, ‘keeping the political issues and other distractions apart, the people of Bangladesh are very good, and laborious. They can, if they intend to improve the condition of the nation with a little effort.’
To be included the Global Finance’s Sixteenth Annual World’s Bank Awards Ceremony 2014 will be presented to the announced winners on 11th October, 2014 at the National Press Club in Washington DC.