While a new generation of banks is struggling to build a strong customer base, Meghna Bank is trying to stand out among the crowd.
The bank has set a new milestone to reach one lakh new customers, within two years, through adopting new initiatives – offering low cost in customer support and rapid expansion of digital services.
Meghna Bank Managing Director Sohail RK Hussain shared his business plan in an exclusive interview with The Business Standard, recently.
"We are planning to go for an international credit rating for the first time in our eight years of journey to gain customer confidence and a good reputation in foreign markets," said Sohail.
In order to expand digital services, the bank set a target to invest Tk60 crore for the purpose and will provide many new services for customers at low cost, plus expand ATM booths rapidly.
Meghna Bank customers will be able to access 2,600 ATM booths – the highest ever amount in the country – in the next two months, free of cost, as the bank is going to collaborate with other banks to this end.
"We are doing digital banking with our 47 branches, which is tremendous progress for us, while agent bank and opening sub-branches in 1,000 square-feet space are in the pipeline," said the managing director.
Sohail, who took the helm of the bank last year, intends to take the bank to a new height, applying his previous expertise of transforming the troubled bank into a strong financial institute.
Recognised for his instrumental role in successful transformation, the seasoned banker turned two private commercial banks – Eastern Bank Ltd and The City Bank – into a business matrix from a branch-centric model.
The banker served The City Bank as a managing director and also as a Chief Executive Officer from November 2013 to January 2019.
Under his helmsmanship, the bank established strong relations with major multilateral organisations such as: the International Finance Corporation, the Asian Development Bank, the German Investment Corporation, Oesterreichische Entwicklungsbank AG, Norfund, FMO, IDB, and many other ECA finance agencies.
In his new assignment with Meghna Bank, Sohail wants to bring foreign investment into the bank, apart from raising fresh funds of Tk200 crore to strengthen its capital base through issuing bonds.
Moreover, the bank board will inject Tk200 crore into the bank which will increase the bank's lending capacity, he said.
This year will be very tough for the bank's top executives as they have to balance shareholders' expectations and the dividend policy. Moreover credit growth is likely to remain slow and profit margin from lending will be very marginal, he observed.
"Last year we set aside some extra probation that will also be done for this year as a safety buffer. All good banks do this," added the managing director.
"Our portfolio is not very big, but we are in a strong position and have been witnessing a lot of improvements since 2019," he continued.
Non-performing loans of the bank came down to 6.4% last year from 7.5% and the bank has set the target to bring it down to 5% next year.
The initial years are very important for any new bank and so are for Meghna that has handled a series of challenges at the initial stage fairly well.
The bank had no major problem or no scam while its board is honest and vibrant, and fairly up to the mark, said Sohail.
"We are in a good position to take it forward now," he added.
Before the pandemic, the banking industry got technology which facilitated establishing a new digital channel to keep up banking; however, that does not mean that the years-long old channel has been discarded immediately – for which the bank has to foot a bill that is a burden as well, according to the banker.
He said the advantage of Meghna Bank is that it is not a new bank anymore as eight years have passed since it was established and now is the time for competition in the market.
To talk about disadvantages, the banker focused on the physical infrastructure of the bank that has not reached the optimum level yet.
"We are talking about fixed assets. Even people are assets. If a bank is 30 years old, it has a lot of manpower and its top level becomes heavy. This is a problem for first tier banks, because if you look at their salaries, it is a huge problem for them and even many banks cut their employees' pay during the pandemic," he observed.
To talk about performance, Sohail said performance does not refer to just setting the target, fulfilling or increasing it, which really does not work for the management in true sense.
"I see some big banks exercise a culture of downsizing. In this case, they are thinking short term," he added.
Some rationalisations may be required but that should not be in fixing the range of manpower, he said, adding that Meghna Bank has two advantages to this end – one is that its staff is relatively young and secondly, that its top will not be allowed to get heavy.
"Our middle will be strengthened. If a bank wants to grow, management of its middle section is very important," he continued.
In 2020, the number of loss-making branches increased considerably, and in response to this, some banks adopted pay cut measures but Meghna Bank faced much less of this problem.
Sohail said, "We will increase the number of branches to 80-100, but that will take a long time, like 10 years or so. Now we have 48 branches. We do not open more than two or three branches every year."
The banker termed the first seven years of their journey Phase 1. Now the bank is in eighth year, which he prefers to call Phase 2, which has got a lot of new initiatives.
"We want to inform our customers that we are standing out as a variety of customer service providers," vowed the banker.
Being a member of a banker family, Sohail said he enjoys banking while his three other siblings are also involved in the profession.
In his eyes, his elder brother Selim RF Hussain, who is leading Brac Bank, one of the largest banks in the country, is an ideal banker.