Bank Asia to channel more credit into SME
Monday, 26 July 2010
Mehdi Musharraf Bhuiyan
Bank Asia is looking to channel more credit into the country's small and medium enterprise sector as part of diversifying the bank's focus areas in the coming years - its Managing Director Erfanuddin Ahmed has said recently.
The third generation leading financier, whose traditional thrust areas for investment have been on corporate sector, said that it is looking to diversify its credit portfolios for better sustainability and risk mitigation.
"Throughout the years, we have channeled bulk of our credit into commercial lending and industrial sector", Irfanuddin said in an exclusive interview with The Financial Express.
"But lately, we have embarked on a strategy of widening our focal areas to credit card, consumer financing and especially SME sector as the bank feels that diversifying our portfolio would increase our immunity against risk situations", he added.
The decade old bank disbursed a total of Tk. 50,267.92 million in terms of loan and advances at the end of 2009; around 84 percent of which has been channeled to industries and commercial lending.
The Bank Asia Managing Director however said that the balance is to be shifted soon as the bank is aiming to bring its current volume of SME financing at a 'desired level' within three years time.
"To that end, we have already planned to channel Tk 3 billion in SME sector by the end of 2010/11, out of which Tk. 1.2 billion has already been disbursed", Irfanuddin said.
"Nevertheless, it does not mean that corporate financing would be ignored from our part in the coming future. Rather, we are trying to diversify our investment focus", he added.
The third generation bank has earned an operating profit of Tk. 2.62 billion in the year 2009, while the profit after tax and provision has increased by 93.27 percent to reach Tk 1.33 billion during the same time.
"In fact our aim is to double our revenue from last year as the bank is targeting an operating profit of Tk. five billion by the end of 2010", the Bank Asia MD said.
"The growth would be driven by an increase in our earning through foreign trade and commercial lending", he said, "as statistics showed that there has been a 60 percent increase in our post import finance and 80 percent growth in export handling over the last six months".
Talking about the prospects and challenges of the financial sector in Bangladesh, the Bank Asia MD put thrust on containing NPL at an acceptable level and making adequate investment in infrastructure projects while he also put emphasis on successful compliance with Basel II requirements.
The Bank Asia top boss also informed that the bank is planning to increase the flow of agriculture credit to the rural farmers and aiming to tap further the booming foreign remittance market to solidify its position in the financial scenario.
"This year, we are going to set up 10 more branches around the country; most of which will be based in traditional home to millions of remittance earners; while our own subsidiary exchange company in London would start their operation by this year", Irfanuddin said.
"At the same time, to reach more rural farmers with our agriculture loans, we are gradually tying up with large microfinance institutes with extensive network in the countryside", he added.
Bank Asia is looking to channel more credit into the country's small and medium enterprise sector as part of diversifying the bank's focus areas in the coming years - its Managing Director Erfanuddin Ahmed has said recently.
The third generation leading financier, whose traditional thrust areas for investment have been on corporate sector, said that it is looking to diversify its credit portfolios for better sustainability and risk mitigation.
"Throughout the years, we have channeled bulk of our credit into commercial lending and industrial sector", Irfanuddin said in an exclusive interview with The Financial Express.
"But lately, we have embarked on a strategy of widening our focal areas to credit card, consumer financing and especially SME sector as the bank feels that diversifying our portfolio would increase our immunity against risk situations", he added.
The decade old bank disbursed a total of Tk. 50,267.92 million in terms of loan and advances at the end of 2009; around 84 percent of which has been channeled to industries and commercial lending.
The Bank Asia Managing Director however said that the balance is to be shifted soon as the bank is aiming to bring its current volume of SME financing at a 'desired level' within three years time.
"To that end, we have already planned to channel Tk 3 billion in SME sector by the end of 2010/11, out of which Tk. 1.2 billion has already been disbursed", Irfanuddin said.
"Nevertheless, it does not mean that corporate financing would be ignored from our part in the coming future. Rather, we are trying to diversify our investment focus", he added.
The third generation bank has earned an operating profit of Tk. 2.62 billion in the year 2009, while the profit after tax and provision has increased by 93.27 percent to reach Tk 1.33 billion during the same time.
"In fact our aim is to double our revenue from last year as the bank is targeting an operating profit of Tk. five billion by the end of 2010", the Bank Asia MD said.
"The growth would be driven by an increase in our earning through foreign trade and commercial lending", he said, "as statistics showed that there has been a 60 percent increase in our post import finance and 80 percent growth in export handling over the last six months".
Talking about the prospects and challenges of the financial sector in Bangladesh, the Bank Asia MD put thrust on containing NPL at an acceptable level and making adequate investment in infrastructure projects while he also put emphasis on successful compliance with Basel II requirements.
The Bank Asia top boss also informed that the bank is planning to increase the flow of agriculture credit to the rural farmers and aiming to tap further the booming foreign remittance market to solidify its position in the financial scenario.
"This year, we are going to set up 10 more branches around the country; most of which will be based in traditional home to millions of remittance earners; while our own subsidiary exchange company in London would start their operation by this year", Irfanuddin said.
"At the same time, to reach more rural farmers with our agriculture loans, we are gradually tying up with large microfinance institutes with extensive network in the countryside", he added.