Brac Bank
Last year was a tough one for Bangladesh’s banks. Political instability took a toll in an otherwise strong economy, and many lenders experienced a dip in profits and an increase in bad loans. But one lender sailed serenely through the storm in 2018, staying above the fray.
Under Selim Hussain, the straight-talking chief executive who joined in November 2015, Brac Bank has been transformed into the country’s best and most-innovative financial institution. Its market capitalization as of February 2019 was about $1 billion, putting it well ahead of rivals Eastern Bank and The City Bank. Brac Bank generated net interest income of Tk11.5 billion ($137 million) in the first nine months of 2018, up 24% year on year, and it reported pre-tax profit of Tk4.09 billion, up 3.1% from the same period a year ago.
Its status as the country’s best full-service lender is buttressed by the strength of its small and medium- sized enterprise business. Smaller firms accounted for 40% of Brac’s total loan portfolio at the end of 2017, and Hussain says he wants lending to SMEs to make up more than half the bank’s book by 2020.
But it is the roaring success of mobile payments service bKash that continues to catch the eye. Founded in 2011 and still managed as a subsidiary of Brac Bank, bKash has also attracted a number of heavyweight equity investors, including China’s Ant Financial Services, the IFC, and the Bill & Melinda Gates Foundation. The number of merchants using bKash now tops 30,000, while an estimated 24 million citizens use the service regularly.
Brac Bank has done many smart things over the years but none, surely, was as far-sighted as its decision to found and then sink its valuable time and money into developing the country’s largest mobile financial service provider.