Rising non-performing loans will continue to be the biggest challenge for the banking sector in the next one to two years, said Rahel Ahmed, managing director of Prime Bank Ltd, yesterday.
“Expansion of money loan courts is needed to avert the crisis,” he said while addressing a press conference organised to mark the 24th founding anniversary of the private commercial lender at the Dhaka Club in the city.
He said the government was taking various measures to reduce the NPLs but all stakeholders would have to work together to address the issue.
Prime Bank's NPL stood at 6.45 percent of total loans at the end of December last year against the industry average of 10.30 percent, according to Bangladesh Bank data. The bank has embarked on massive transformation in terms of adopting digitalisation, Ahmed said.
“The transformation is already bearing fruit.”
The bank declared 12.5 percent cash dividend for 2018 that reflects the bank's good health, he added.
The top executive says banking business faced difficulties last year amid liquidity crisis, which eased slightly this year. “But bringing down the lending rate to single-digit is a big challenge.”
“Efficient money management kept the bank out of the liquidity shortage last year,” said Mohammad Habibur Rahman Chowdhury, a deputy managing director of Prime Bank. He said the bank retained its advanced deposit ratio within the authorised limit of 85 percent throughout the year despite the liquidity pressure in the market.
The total deposit of the bank stood at Tk 19,832 crore in 2018 and its investment totalled Tk 20,581 crore, according to a statement of the bank. Its assets were valued at Tk 29,390 crore last year.
“The bank is now focusing on sustainable growth and compliance instead of joining the race of being among the top banks in the market,” Ahmed added.