Banks heading for robust growth

Christof Gabriel Maetze

The banking sector will grow in a big way in the next five to 10 years, due to the rapid economic growth, a top international banker said.
“Higher GDP growth and low bankerisation are sources of growth for the banking sector,” said Christof Gabriel Maetze, Frankfurt-based Commerzbank's global head of financial institutions.
Bankerisation, the ratio of total banking transactions to GDP, happens to be 52 percent in Bangladesh, but is close to 200 percent in Germany.
"In Bangladesh, you will have at least five to 10 years of relatively rapid banking growth because of these two factors."
Maetze, also a member of Commerzbank's board of management, was in Dhaka last week to inaugurate the bank's representative office.
“Bangladesh has a very interesting financial aspect as it has continued to grow steadily for a long period. It makes total sense to participate in the growth."
The second largest bank in Germany, Commerzbank is now looks to increase its presence in the growth markets, specifically South Asia.
"We are convinced that we will be able to significantly increase our market share in the import and export business with Bangladesh through our presence here," Maetze said.
Asked if the bank would be opening a full-fledged operation, he said: "We have learnt from over 140 years of our existence that it is always good to start slow. We are starting a representative office now; let's see how it works out."
"But I am very serious about not growing too fast," he added.
During his two-day stay, Maetze also met with Bangladesh Bank Governor Atiur Rahman and spoke at lengths on financial inclusion.
"We would like to make Bangladesh more visible to the rest of the world -- it is our form of financial inclusion."
Maetze reserved particular word of praise for the private banks, deeming their growth to be “prosperous” for the country.
“But it will be very challenging for the state-owned banks in future as they are carrying a burden on their backs. It has to be seen how this is dealt with, as the answer is partially political -- and not economic.”
Regarding the high interest rates in Bangladesh, he said the situation is the same around the world.
"It would be very important for the entrepreneurs to develop an active capital market so they have more than one choice to borrow from in the future. If the only source of lending is the banks, it becomes more difficult."
"Opening the financial sector more will make it more competitive and will most probably lead to a reduction in rates," he added.
Maetze said the collapse of Lehman Brothers has changed the way big banks operate.
"One thing I have learnt from the Lehman Brothers collapse is that you can run a large bank, but it should not be too large."
"Another lesson is you should always try not to overgrow. If you try to grow too fast, your system, team and people may not be able to support the growth."
About profit-mongering among many financial institutions, he said: "In markets where there is fair competition you can not charge as you wish."
He, however, supports the idea of profit maximisation.
"I believe when banks are profitable and healthy, they contribute to the economy by providing jobs, paying taxes and usually exercising certain corporate social responsibilities in various ways."
Commerzbank boasts nearly 15 million private customers, as well as 1 million business and corporate clients.

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