Islami Bank eyes securing position among top 100 banks in the world

Islami bank, the largest commercial bank in Bangladesh, has been the top remittance earner since 2007, thanks to its extensive network. Now the bank wants to secure its position in the list of first 100 banks in the world. 

Mohammed Monirul Moula, managing director of Islami Bank, shared his future plans for the bank in an interview with The Business Standard. 

Tell us about the financial performance of Islami Bank amid this global economic crisis.

Islami Bank Bangladesh Limited (IBBL) has achieved an impressive growth in recent years amid the post-pandemic global crisis, further aggregated by the Russia-Ukraine war. Islami Bank's deposit base increased by Tk46,100 crore in the last three years and stood at Tk141,000 crore by December 2022. The investment portfolio of the bank stood at Tk144,100 crore at the end of 2022. 

The bank generated operating profit of Tk2,124.7 crore with 28.4% growth over the previous year. Total assets of the bank grew to Tk183,800 crore marking a 12.4% growth over previous year. 

The volume of the import business of the bank was Tk36,964 crore and export business was Tk75,404 crore in 2022. The success has been possible due to the trust and faith that customers have in Islami Bank and strong public demand for interest-free financial transactions.

Islamic banking is growing fast in Bangladesh. What challenges and prospects do you see for Islamic banking business in the near future?

The growth of Islamic banking in Bangladesh has been significant, with a market share of around 30% of the total banking industry's assets in the country. Shariah banking has become an integral part of the banking sector in Bangladesh and is expected to continue to grow in the coming years driven by the increasing demand for Shariah-compliant financial products and services. 

On the other hand, lack of skilled manpower in the field, absence of adequate research and development framework in the country, and lack of Islamic banking literacy in the society are the major challenges of Islamic banking. This banking is currently being governed by Islamic Banking Guideline 2009 by the central bank which is not in line with the latest development. Uniformity of Islamic banking practices among the participating banks is also required.

As you lead a largest private commercial bank in the country, what challenges do you see in the banking sector in terms of retaining customer confidence?

Islami Bank is the largest commercial bank in the country contributing in maximising welfare and national development through reducing discrimination and poverty. In general, default investment is a major challenge for the banking industry and it is essential to address it with special care. Minimising the high default investment, recovery of bad investment, and maintaining profitability is a big challenge for the banking industry. Need-based customer service may support retaining customer confidence.

How did Islami bank become top remittance earner?

In the arena of foreign remittance, the story of Islami Bank's success has been unique. The bank, since 1995, has been deploying officials in Saudi Arabia and other NRB concentrated countries who worked to motivate expatriates for remitting through the banking channel in place of hundi. 

This, coupled with cordial services at home and an extensive global network, has resulted in high remittance yield. The bank attained top position among the commercial banks in remittance mobilisation since 2007. It currently holds around 25% market share of the country's remittance and received $4.65 billion in 2022. It fetched $1.14 billion during the first quarter of 2023. 

Islami Bank has agreements with 147 remittance service providers in different countries of the world. Expatriates can send their hard-earned money through these institutions quickly and safely at low cost. The bank has a strong central remittance processing system and extensive network of 6000 plus operating units across the country. Islami Bank has achieved firm trust and faith of the expatriates for NRB services.

How did the digital banking landscape change in Bangladesh after the pandemic? What measures did your bank take to stay competitive in the digital space?

The adoption of digital technology has transformed Bangladesh's financial sector in the last one-and-a-half decades, bringing millions under banking services. Mobile Financial Service (MFS) and fintech played a vital role in adopting technology in the country's banking system. 

We are moving towards digital transformation for attracting unbanked people to the banking channel and to reduce carbon emissions. The technology-based banking services increased significantly during the pandemic. People conducted their banking activities from home using various alternate delivery channels. 

During this period, we introduced a number of ADC products including omni-channel banking app CellFin, a dedicated app for our internet banking, and mCash services, cash recycling machine (CRM), cash-by-code technology for local remittance, and dual currency prepaid cards. Our emphasis in digital banking was reflected with a slogan 'Sustainable growth through fintech solutions'.

What is the vision of Islami Bank in the next five years?

Our vision is to maximise welfare through maintaining our position as a healthier and stronger bank at the top of the banking sector and continue to maintain stable positions in ratings, based on the volume of quality assets. 

We have been ranked among the world's top 1,000 banks for the last 12 consecutive years. We want our position to be upgraded among the first 100 banks in the list, gradually, during the coming years. Our priority is on maximising financial inclusion, especially in the rural areas. 

We want our microfinance program to cover every single village of the country. We want our ADC products to reach maximum members of the youth community and offer them quality banking services for freelancing and entrepreneurship.