M Shamsul Arefin National Credit and Commerce (NCC) Bank PLC plans to gradually convert its entire operations from conventional to Shariah-based banking within the next four years.
As part of the broader objective, the second-generation commercial bank, which started operations in 1993, continues to expand its Islamic banking footprint to meet growing demand for Shariah-compliant services.
The bank's managing director, M Shamsul Arefin, disclosed the plan in an exclusive interview with The Financial Express (FE) recently ahead of the bank's 33rd founding anniversary to be observed today (Sunday).
He said the bank has already established full-fledged Islamic banking branches in Dhaka (Gulshan), Feni, Thakurgaon and Chattogram (Muradpur), along with Islamic banking windows at 32 branches nationwide.
"Looking ahead, NCC Bank plans to gradually transition its entire operations from conventional to Shariah-compliant banking within the next four years by opening new Islamic branches, setting up Islamic windows at existing branches, shifting current customers to Islamic products, and strengthening offerings under Shariah principles across SME, trade finance, agriculture and retail banking," he said.
Sharing the bank's operational journey, Mr Arefin said NCC Bank's 33-year journey had been marked by challenges, transformation and steady advancement rather than a perfectly smooth trajectory.
The seasoned banker said the bank faced economic slowdowns, regulatory shifts, global financial crises, currency volatility and domestic market pressures over the years.
Nevertheless, through prudent guidance from the board of directors, robust governance, disciplined risk management and continuous modernisation, NCC Bank successfully overcame those challenges.
"Today, Bangladesh Bank recognises NCC Bank as one of the country's top ten sustainable banks, and it is trusted by a wide range of customers," he said.
The bank's top executive said NCC Bank has transformed both its operational and business models into a fully centralised structure backed by strong risk management and customer-centric service delivery.
Talking about growth in deposits and advances, he said the bank has achieved steady and sustainable expansion in both areas, reflecting strong customer confidence and prudent banking practices.
On the deposit side, he said the bank's continued expansion stemmed from improved service quality, growing customer trust and a diversified range of deposit products across retail, corporate and Islamic banking segments.
The rise of digital banking platforms has also played a significant role in boosting deposit mobilisation, particularly through convenient savings and transaction accounts, he added.
On the advances side, Mr Arefin said the lender follows a carefully structured lending strategy with balanced credit growth across corporate, SME, agriculture and retail sectors.
"Rather than pursuing aggressive expansion, NCC Bank ensures that loan growth remains aligned with deposit stability and effective liquidity management," he said.
Regarding profitability during the current challenging economic period, the experienced banker said maintaining a stable net interest margin (NIM) remained a major challenge for the banking sector, including NCC Bank, amid economic sluggishness.
Persistent pressures from interest-rate fluctuations, tight liquidity, inflation and subdued credit demand have kept margins under strain, he noted.
"In response, NCC Bank relies on a diversified and resilient profitability model rather than depending solely on interest income," he said.
Regarding the bank's current investment mix, Mr Arefin said the bulk of investments goes to the private sector, including corporate financing, SME and retail lending, agriculture loans and export-oriented businesses, which remain the main drivers of interest income.
At the same time, he said the bank maintains a significant holding of government securities to meet statutory liquidity requirements, manage short-term liquidity and earn stable risk-free returns.
According to him, the lender's investment strategy maintains a prudent balance between yield and safety while ensuring diversified exposure in line with regulatory requirements and market conditions.
When asked about non-performing loan (NPL) management, he said NCC Bank, like the broader banking industry, has also faced pressure from rising bad loans due to macroeconomic challenges, inflation and global uncertainties.
However, he said the bank has kept its NPLs at a manageable and controlled level through strong credit discipline.
To address NPL-related challenges, NCC Bank has implemented a comprehensive recovery strategy, including stronger credit monitoring systems, early warning mechanisms and enhanced borrower surveillance.
"The bank is also focusing on improving credit appraisal quality to prevent future NPL situations. The overall objective is to gradually reduce the NPL ratio and keep it among the lowest in the industry over the next few years," he said.
Terming digital transformation one of the bank's priority areas, Mr Arefin said virtual banking is viewed not as a replacement for traditional banking but as an evolution in which physical and digital channels work together to provide seamless customer service anytime and anywhere.
Going forward, he said the bank is committed to expanding its virtual banking ecosystem through a structured digital transformation roadmap.
The plan includes AI-driven personalised banking services to better understand customer behaviour, alongside expansion of Bangla QR payments, virtual cards and online payment gateways to strengthen cashless transactions.
In the coming years, he said NCC Bank aims to position itself as a more resilient, technology-driven and sustainably growing financial institution with balanced strength in deposits, digital transformation, network expansion, ADR and NPL management.
"The focus on deposit mobilisation will remain on stable, diversified and sticky deposit growth rather than short-term volume expansion, ensuring long-term liquidity strength and funding stability," he added.
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