AHSAN HABIB

NCC Bank PLC is targeting diversification, digital transformation and stronger risk management to drive its next phase of growth, said Managing Director and CEO M Shamsul Arefin.

In an interview with The Daily Star on the bank’s 33rd anniversary, he outlined a roadmap centred on expanding SME and retail lending, accelerating digital banking services, strengthening asset quality, embracing artificial intelligence and increasing support for sustainable financing.

The bank began its journey as an investment company in 1985 and operated through 16 branches until 1992. It became a full-fledged private commercial bank in 1993 with a paid-up capital of Tk 39 crore. Today, that figure stands at Tk 1,154 crore. Arefin said the lender’s transformation from a merchant bank into a commercial bank, coupled with its strategic move into larger corporate clients and trade finance, has been instrumental in shaping its growth trajectory.

GROWTH PRIORITIES

“In its early years, the bank focused primarily on SME financing and mid-sized corporate clients, which helped build a loyal customer base and establish a strong customer-centric culture. However, over the last seven to eight years, NCC Bank has strategically repositioned itself by venturing into large-scale corporate clients, export-oriented industries, trade finance, and a broader range of business segments,” he said.

While maintaining its presence in corporate and export-oriented sectors, NCC Bank plans to place greater emphasis on SMEs, retail banking and agriculture to achieve more balanced growth and deepen financial inclusion, he said.

The lender also plans to expand its Islamic banking footprint as demand for shariah-compliant financial services continues to rise.

“The long-term goal is a modern, resilient, customer-focused bank built on strong governance, financial discipline, and sustainable growth,” he said.

DIGITAL TRANSFORMATION

Digitalisation remains central to the bank’s strategy.

“Going forward, NCC Bank will keep investing in digital infrastructure, cybersecurity, data analytics, automation, and customer-facing tech -- enhancing mobile banking, QR payments, virtual services, digital lending, and fintech integrations,” he said.

Artificial intelligence is expected to play a growing role in the bank’s operations.

“As part of its digital roadmap, the bank is exploring gradual integration of AI into areas like customer behaviour analysis, fraud detection, chatbots, predictive analytics, and credit risk monitoring,” he said.

“AI will also strengthen early warning systems and portfolio analysis.”

Meanwhile, the bank is also increasing its focus on green financing, with greater attention to renewable energy projects, energy-efficient industries and environmentally sustainable investments, he said.

STRENGTHENING ASSET QUALITY

Reflecting on the previous year, Arefin said broader economic pressures had affected asset quality across the banking industry.

“In 2024, NCC Bank faced asset quality pressure like the broader industry, with its NPL ratio rising to 7.32 per cent. This was driven mainly by external factors like inflation, energy crisis, forex volatility, liquidity stress, and slower business cash flows,” he said.

“By 2025, however, the bank significantly reduced its NPL to 4.12 percent through stronger recovery drives, improved monitoring, tighter credit underwriting, and better portfolio supervision.”

“The goal is not just to lower the NPL ratio but to build a healthier, more sustainable, and diversified loan portfolio over the medium to long term,” he said.

The lender’s performance remained resilient despite a challenging banking environment. Deposits rose by nearly 17 percent, advances increased by around 10 percent and operating profit grew by almost 18 percent in 2025. Net profit climbed to Tk 476 crore from Tk 437 crore a year earlier.

“Overall, NCC Bank’s 2024-2025 performance underscores strong governance, a customer-centric model, portfolio diversification, and disciplined risk management,” he said.

To keep bad loans under control, the lender is pursuing stricter credit appraisal, enhanced early warning systems, expanded recovery teams and greater use of technology and analytics.

NAVIGATING ECONOMIC HEADWINDS

He noted that many businesses remain cautious amid high inflation, rising interest rates, foreign-exchange volatility, elevated import costs and liquidity pressures.

“Many businesses remain cautious due to some ongoing pressures: high inflation, energy crisis, rising interest rates, forex volatility, import costs, liquidity stress, slower demand, and lower cash flow,” he said. “As a result, business houses are prioritising liquidity and balance sheet stability over expansion.”

Demand has shifted from long-term investment loans towards working-capital and trade-finance facilities, although export-oriented sectors continue to show relatively stable borrowing demand.

On governance, Arefin said the board maintains strategic oversight while management independently handles day-to-day operations.

“The board provides strategic oversight, while management independently handles day-to-day operations within approved risk and compliance frameworks. No undue pressure is exerted on lending or operational decisions -- all credit proposals undergo a rigorous evaluation and multi-level approval process,” he said.

Asked what differentiates NCC Bank from its peers, Arefin highlighted its governance standards, risk management and customer-focused culture.

“NCC Bank stands out for its stability, disciplined banking, customer-centric culture, and over three decades of credibility,” he said.

“It maintains strong governance, compliance, and prudent risk management -- even during sector challenges -- prioritising transparency and accountability over short-term gains.”