A public bank for the private sector

Interview with Dr. Zaid Bakht, Chairman — Agrani Bank Limited



How is Agrani Bank Limited (ABL) helping to build the economy?

Foreign investors are attracted by countries with strong domestic investment and certain prerequisites, such as infrastructure, in place. In Bangladesh, financial entities are playing a critical role in promoting indigenous investment and backing infrastructure projects. As a case in point, ABL participated in the financing of the Mayor Mohammad Hanif Flyover, the country’s first public-private-partnership project. Although investors are not receiving the expected returns from this, public entities like ABL have decided to stand by them, because it is a strategic project for Bangladesh. So, public banks are not only providing funds, but also taking the additional risk that big infrastructure projects entail.

On the one hand, public banks provide financing to highly strategic projects. On the other, public banks have their social agenda. ABL is a commercial bank and we try to be profit oriented, but at the same time, we have very important social commitments. In addition, the Bangladeshi government has over 40 safety-net programmes, which give scholarships to students and allowances to widows, among other things. At ABL, we distribute these resources without charging the government. This means we are not only helping thousands of Bangladeshi families, but also integrating them into the banking system.

What are ABL’s competitive advantages?

One of our advantages is our size and the size of our network: we have 943 branches throughout the country. In addition, our branches are interconnected, so our depositories can withdraw money from any of them. As a result, large private corporations have decided to work with us, rather than a private bank, because they know that we have an extensive, quick and reliable branch system. Also, the fact that we are a public bank is a strategic advantage, because people know that the government has our back.

“In just a year, we have increased our operating profit by 50%, from $72 million to $108 million.”

How has Agrani Bank performed recently?

Banks have gone through difficult times, but I believe the worst is over. At ABL, we have improved our management, streamlined operations and put in place new governance practices, such as an independent internal credit control and compliance department, which reports to the board and audit committee. In just a year, we have increased our operating profit by 50%, from $72 million to $108 million.

What is the economic potential of Bangladesh?

Bangladesh is a case of seriously unrealised potential. Firstly, its people are highly adaptable, quick learners and good workers. Secondly, ours is a homogeneous society with no social conflicts. Bangladesh has achieved remarkable things since independence. Then we had only one cement factory, now there are over 50 — the list could go on and on. If we provide the right policies and infrastructure support, and if we convince international investors to bring their technology to Bangladesh, the sky is the limit.