Golam Hafiz Ahmed

Customer satisfaction, financial inclusion and management excellence will be at the heart of NCC Bank's efforts as it aspires to become one of the most beloved commercial banks in four years, its chief executive officer said.

“The environment within the branches will be more customer-friendly in paper work, delivery and care, so they feel comfortable banking with us,” said Golam Hafiz Ahmed.

To make the bank pro-customers, he said, NCC Bank is focusing on building positivity in the attitudes of the frontline workforce.
“If we can satisfy our customers, it will ultimately bring in more clients for the bank.”

To accomplish this goal, NCC Bank has recruited young, talented officers under a new pay scale, which was adopted last year to keep benefits on par with the industry, Ahmed told The Daily Star in an interview last week.

The bank is mapping out a five-year strategy with expansion of the balance sheet and operations, financial inclusion and excellence in total management topping the list of goals, the CEO said.

“We will bring qualitative changes in everything we do. It will eventually increase customer benefit, experience and satisfaction, employees' satisfaction and shareholders' value.”

As a first step, the bank is working on upgrading the system that is needed for large scale operations, he said. It is also working on workforce realignment, he added. “Our plan is to become a top financial institution by 2019.”

Currently, the journey of the bank, now a well-positioned financial institution, to reach a sound position was not smooth at all. Its predecessor was an investment company, riddled with problems. When it became a bank in 1993, it still carried its past ailments. 
Owing to dedication from the board, it was able to shed all its past problems in seven years.

“We did not improve overnight. We are still trying to bring in more quality in services and management,” said Ahmed.

The bank's deposits and loans and advancements are growing gradually. In 2014, it had a deposit base of Tk 10,570 crore, up 7.61 percent from 2013 when it was Tk 9,822 crore. Its loans grew to Tk 9,092 crore from Tk 8,816 crore in the same time.

Its non-performing loans went up in the last three years following very low levels of NPLs in 2010 and 2011, when it was 2.27 percent and 2.68 percent respectively.

As of last year, it had NPLs of Tk 673 crore, which was 7.49 percent of total loans. Last year, the bank recorded a profit of Tk 150 crore, which was Tk 113 crore a year ago.

Ahmed pointed at default loans as the biggest hurdle for old banks in the country. “Because of this constraint, we struggle to bring down the lending rates.”

The NPLs for NCC Bank went up a bit this year from last year because of the overall troubled business scenario in the country, which has hit almost all banks, said Ahmed.

He, however, said the bank would reach a comfortable level within two years in terms of NPL, as the bank has an annual target in either recovery or rescheduling worth Tk 300 crore. 

With greater focus on tightening risk management, recovering old loans and regularising old accounts, it could not pay attention to propelling the business for higher growth, said the CEO.

“Still, the bank has forayed into new areas for business. And the quality of operational performance and total management has improved, which will be reflected in the financial results at the end of this year.”

Customers are borrowing from other sources as well as external sources at much lower interest rates, he said. “We have to bring down lending rates for the good customers. Of course, we have been doing so all along, providing very competitive rates to good companies.”

The bank has reduced the interest rate for short-term financing and branding itself anew with new products.

With an eye on small and medium enterprises, Ahmed said, “We did not earn very much from our large clients, but our growth in the SME sector is very encouraging. We have exceeded our lending targets for the sector.”

The bank is also involved in agriculture lending and green banking in line with instructions from the central bank, he said. “We are also doing direct lending in the agriculture sector in many districts. Our experience in direct agriculture lending is also good. We have a good base of farmer-borrowers.”

The bank has approved a number of projects under its green banking initiative, as it believes in responsible lending, keeping in mind the environmental impacts and social benefits of lending.

On channelling remittance into the country, it helped migrant workers send Tk 1,870 crore to the country last year.

The bank now has 104 branches employing 2,277 people, and has received permission from the central bank to open another six branches this year.

He said NCC Bank has not gone for the relaxed loan rescheduling facility offered by the central bank; as a lesson from financial felonies in a number of state-run banks in recent years, it has solidified its risk management system. 

Ahmed, who is in banking for 31 years now, welcomed the government's decision to reduce the interest rates on its savings instruments; the banks were unable to woo depositors because of the gap in rates between the bank deposit rates and government's savings certificates. 

“The new decision will ensure a level playing field.”

Ahmed, who studied economics at Dhaka University, began his career as a senior officer with Pubali Bank in 1983. With just six months, he joined France's Banque Indosuez's Dhaka office where he worked for 13 years. He also worked for Dhaka Bank until he moved to NCC Bank in January 2008 as its deputy managing director. He was appointed as its CEO in February last year.