AB Bank eyes rebound on loan recovery, digital push

Following a significant reduction in the volume of classified loans, AB Bank PLC now eyes a strong rebound, riding on robust cash recovery and intensifying its digital transformation process.
Apart from that, the country's oldest first-generation commercial bank has stepped up its deposit mobilisation efforts and rebalanced its investment portfolio, reducing dependency on corporate banking while focusing on CMSMEs (cottage, micro, small, and medium enterprises) and retail banking.
Acting Managing Director and CEO Reazul Islam shared the bank's current and future plans in an exclusive interview with The Financial Express (FE) recently, ahead of the commercial lender's 44th founding anniversary to be celebrated today (Sunday).
He said there were instances of the bank making rebounds from crises on a few occasions in its past. The bank is now struggling like some others.
"But we are confident that the bank will strongly rebound this time," he said.
Sharing data, the bank's top executive said the ratio of classified loans dropped to 49 per cent by the end of 2025 from more than 80 per cent recorded three months ago.
"Now the bank plans to cut it down to close to 25 per cent by the end of this year," he said.
About the remarkable achievement in reducing NPL (non-performing loan) buildup, he said they, as part of their turnaround roadmap, intensified their cash recovery drives with regular communication with struggling borrowers, while the Bangladesh Bank-instructed facilities under its policy support mechanism played a significant role in this regard.
Apart from that, the seasoned banker said, the management of the bank is paying serious attention to building employees' confidence so that they believe in the rebound. The bank now tries to ensure 100 per cent of employees' benefits, as far as promotion and salary are concerned, with a transparent and proper policy.

"Alhamdulillah, they are very motivated now. As a result, fresh deposits are coming and deposits that flowed out are returning," he said, adding that the top 20 borrowers roughly hold 80 per cent of the loans.
"If we can settle one borrower, a substantial amount of money will come back. So, it is doable," the acting managing director-cum-CEO said.
The bank has also worked to rebuild public trust by ensuring customers' liquidity needs are met promptly -- whether through branch services, ATM booths, or cheque clearing.
These efforts, he noted, have played a key role in restoring client confidence.
"Customer sentiment was once negative. But by ensuring that every legitimate need is addressed quickly and reliably, we have transformed that into a positive mindset," he said.
After cash recovery, Mr Islam said, digital transformation is the bank's second priority strategy, and it is investing in bringing in cutting-edge technologies for the rapidly growing tech-savvy population.
He said the bank's digital banking app, AB Direct, is the second banking app in the country's banking history, which was probably launched in 2010.
"The app is quite rich. We are planning to transform it into a complete digital banking platform in the second phase, in line with the concept of embedded banking. Our board is very positive because this is the way we have to go to become sustainable in the coming days," he said.
Highlighting the corresponding bank's strengths, Mr Islam noted its overseas branch in Mumbai, which provides trade finance support to around 50 local banks.
He said they have recently received regulatory permission to open another overseas branch in Kolkata, India, and the management is making serious efforts to make it operational as quickly as possible because the bank handles around 80 per cent of Bangladesh's trade with India.
The bank's top executive said they believe the volume to be handled by the Kolkata branch will be much higher than that of the Mumbai branch, as bilateral relations between Bangladesh and India have been improving in recent days.
"It will be another strength for the bank in the coming days," he said.
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