Built on trust, backed by governance: How BRAC Bank became Bangladesh's safest bank

Trust, good governance and financial stability have become more important than ever in Bangladesh's banking sector. While the industry has battled a series of headwinds in recent years, a few institutions have distinguished themselves through robust risk management, exemplary corporate governance, and unwavering customer confidence. A prime example of this resilience is BRAC Bank, which on Saturday completed a quarter-century of operations in Bangladesh.

In an interview with The Business Standard's ASM Saad, BRAC Bank Managing Director and CEO Tareq Refat Ullah Khan reflects on the bank's quarter-century journey, its position as one of the country's safest banks, its strategy for maintaining asset quality, and its ongoing efforts to fortify digital security.

What are BRAC Bank's key achievements in its 25-year journey?

Sir Fazle Hasan Abed established BRAC Bank with a clear purpose: to address the financing gap faced by the "missing middle" – the country's small and medium enterprise (SME) sector.

Twenty-five years on, we have financed more than two million SME entrepreneurs. That financing has contributed directly to the creation of more than 10 million jobs across the country. Those figures show that BRAC Bank has done far more than provide banking services. It has played a meaningful role in building Bangladesh's economy.

Our network now extends to more than 2,300 locations across the country, meaning distance is no longer a barrier to accessing banking services. Through our Astha app, digital banking has become a reality for millions, with nearly Tk25,000 crore in transactions processed every month. Thanks to our customers' unwavering confidence, BRAC Bank's retail portfolio has now exceeded Tk52,000 crore.

In addition, our subsidiary mobile financial services provider, bKash, now serves 80 million people across Bangladesh. In other words, we have been able to bring a large share of the country's population into the formal financial system.

We have also become one of Bangladesh's leading corporate banks. Our corporate internet banking platform, CorpNet, now processes transactions worth more than Tk23,000 crore on average every month for our corporate clients.

Over the past 25 years, BRAC Bank's market capitalisation has surpassed the one-billion-dollar mark. We have built a strong capital base and a robust foreign exchange portfolio. Recently, we provided $96 million in standalone financing for an Aframax oil tanker, which remains the largest single-bank financing deal in Bangladesh's shipping industry.

Today, BRAC Bank has established itself as one of the country's best-governed and most trusted banks. Our goal is straightforward: to bring financial freedom to every individual in Bangladesh through services that are relevant, accessible and designed around real needs. Looking ahead, we aim to become the country's most impactful bank.

At the same time, we are aligning our operations, mindset and business practices with international standards so that we can become the first Bangladeshi multinational bank to operate full-scale banking services overseas.

Our achievements over the past quarter of a century reflect that ambition. BRAC Bank now has a market capitalisation of more than US$1 billion and a capital base exceeding Tk10,000 crore. Foreign investors hold 35.89% of the bank, while BRAC owns a 46.16% institutional stake.

Our retail assets stand at Tk12,563 crore, and we have built our reputation on collateral-free CMSME lending. Our offshore banking assets have reached US$1.3 billion, while bKash provides mobile financial services to around 80 million users. We have maintained a non-performing loan ratio of just 2.27%, earned international credit ratings of 'B+' from S&P Global Ratings and 'B2' from Moody's, and achieved a Bloomberg ESG rating of 3.8.

In your view, what are the most important factors in becoming a safe bank in Bangladesh's banking sector?

To answer that, we first need to look at the recent developments in Bangladesh's banking sector.

For decades, people generally believed that keeping money in a bank automatically meant it was safe. However, the situations that have emerged in several banks in recent years have changed that perception. As a result, depositors have become much more careful and selective about where they keep their hard-earned savings.

In this environment, trust has become the most valuable asset in Bangladesh's banking industry. That trust cannot be built through eye-catching branding or aggressive marketing alone. It is earned through strong corporate governance, financial stability, compliance with laws and regulations, and consistent performance over a long period.

The first thing people should look at when assessing how safe a bank is is the quality of its sponsors and its corporate governance structure. Banks with strong governance are far better equipped to withstand economic and market challenges than those without it.

A significant share of BRAC Bank's sponsorship comes from BRAC, one of the world's largest non-governmental development organisations. At the same time, most members of our Board of Directors are independent or non-shareholding directors with expertise in the financial sector.

This allows BRAC Bank to uphold the highest standards of governance, free from individual or corporate interests.

Secondly, people should consider international credit ratings and independent assessments by reputable institutions. These provide an objective picture of a bank's financial strength, risk management capabilities and ability to meet its obligations. BRAC Bank is the only bank in Bangladesh to have received international credit ratings from globally recognised agencies such as S&P Global and Moody's Ratings.

Thirdly, the quality of a bank's assets is equally important. A high ratio of non-performing loans indicates weaknesses in credit risk management. While the banking sector's overall non-performing loan ratio stood at more than 30% at the end of 2025, BRAC Bank reduced its ratio to just 2.27%, setting a rare benchmark in Bangladesh's banking industry.

Other key financial indicators also matter, including liquidity, capital adequacy, profitability and the overall strength of the balance sheet. These indicators show how well a bank can withstand economic stress while continuing to serve customers without disruption.

BRAC Bank performs strongly across all these indicators. For example, we have reduced our Advance-to-Deposit Ratio to just 63%, one of the key measures of liquidity.

This means we have the capacity to repay customers' deposits immediately, even during adverse conditions. Our capital base has now exceeded Tk10,000 crore, reflecting the strength of our financial foundation.

At the same time, in 2025 BRAC Bank recorded the highest net profit after tax – Tk2,251 crore – among both state-owned and private commercial banks in Bangladesh, reflecting the consistency of our performance.

Finally, deposit growth is another important measure. During periods of macroeconomic uncertainty, depositors naturally move their savings to banks they consider the safest and most reliable. While deposit growth across the banking sector stood at just 11.51% at the end of December 2025, BRAC Bank recorded growth of nearly 27.5%.

In 2025 alone, we attracted more than Tk21,000 crore in new deposits.

The key point is that no single indicator can fully assess the condition of a bank. Rather, it is the combination of trust, good governance, financial strength and regulatory compliance that determines whether a bank will be regarded as a safe haven during times of uncertainty.

What is the single most important factor in building a safe bank that can earn public trust and sustain long-term growth?

If I had to answer in one phrase, it would be corporate governance. It is the solid foundation on which trust, growth and long-term stability are built.

A bank that upholds good governance is far better placed to manage risks effectively, protect depositors' interests and create sustainable value. If that foundation is compromised, no amount of capital, advanced technology or attractive marketing can ensure an institution's long-term survival.

In many developed countries, this is not even a subject of debate because good governance is taken for granted in the banking sector. Bangladesh's context is different. Our banks must work continuously to ensure strong corporate governance. That requires a strong board of directors, effective oversight, disciplined risk management, regulatory compliance, transparency and ethical leadership.

The relationship between these elements is straightforward. Good governance builds trust. Trust attracts customers, investors and other stakeholders. That consistent trust, in turn, drives sustainable growth. Only those institutions that successfully combine public trust with financial discipline are able to withstand economic downturns and periods of market disruption.

How are you ensuring that rapid deposit growth does not translate into weaker lending decisions and future asset quality issues?

Safeguarding depositors' money is the foremost responsibility of any bank. Deposit growth only becomes meaningful when lending decisions are prudent, risk management is robust and asset quality is preserved.

One of the most effective ways to manage risk is through portfolio diversification rather than concentrating lending in a single sector. Many banks in Bangladesh still depend heavily on a relatively small number of large corporate and commercial borrowers.

The problem with that model is that when a substantial share of lending is tied to a few borrowers or sectors, even a minor negative development can have a significant impact on the bank's balance sheet.

A diversified portfolio provides much greater resilience. By serving corporate, commercial, SME, retail and agricultural customers across different regions of the country, risks can be spread much more effectively.

Achieving that level of diversification requires long-term investment. Building a strong nationwide distribution network, maintaining a robust field presence in remote areas and developing deep relationships with entrepreneurs across the country are not easy tasks. However, in the long run, this is the most sustainable path to becoming a safe bank.

At the same time, growth must be supported by disciplined risk management. Every lending decision should follow a clearly defined framework, rigorous assessment and strong underwriting standards. Continuous portfolio monitoring also enables emerging risks to be identified early so that corrective action can be taken before problems escalate.

At BRAC Bank, we do not see deposit growth and asset quality as competing objectives. Rather, we see them as complementary and remain extremely careful in how we deploy customer deposits.

Strong corporate governance, disciplined lending and a diversified portfolio have enabled our deposit growth to strengthen both the quality of our assets and the resilience of our balance sheet.

With sector-wide non-performing loans exceeding Tk5.5 lakh crore, how has your bank maintained asset quality?

One of the main reasons is that we never compromise on our core principles, regardless of market conditions. Since its inception, BRAC Bank has remained firmly committed to good governance, international standards and full transparency. These have been the foundations of our strong asset quality, and we have remained steadfast in upholding them under all circumstances.

The market occasionally presents opportunities that may appear attractive. However, if they conflict with our policies or principles, we choose not to pursue them. That may reduce our profits in the short term, but over the long term it has helped protect the quality of our assets.

At the same time, a bank should also be judged by the contribution it makes beyond conventional banking services to society and the country's development. That is how BRAC Bank has established itself as one of the safest banks in Bangladesh.

How critical are digital and cyber security in becoming a safe bank? How is BRAC Bank ensuring this digital security?

A significant part of a bank's overall safety depends on the security of its digital infrastructure. Customer account information, transaction records and personal identity data are now stored digitally. As a result, cyber security has become one of a bank's core responsibilities.

BRAC Bank takes this responsibility very seriously. We use internationally recognised security practices to protect customer information by implementing multi-factor authentication across our systems, preventing unauthorised access. We also maintain data encryption and data loss prevention systems.

For real-time monitoring, we use Security Operations Centre (SOC), Security Information and Event Management (SIEM) and Security Orchestration, Automation and Response (SOAR) technologies, enabling us to detect suspicious activities immediately. At the same time, we ensure full compliance with all regulatory requirements set by Bangladesh Bank.

We also conduct regular awareness programmes to educate customers about cyber threats and fraudulent activities. Technology alone is not enough; customer awareness is equally important.

Our efforts do not stop there. Looking ahead, we plan to establish a threat intelligence sharing platform, expand the use of artificial intelligence and machine learning-based analytics, strengthen our incident response capabilities and further enhance our vulnerability assessment, penetration testing and risk assessment programmes.

We are also fully prepared to respond to cyber incidents. Our dedicated Cyber Incident Response Team has the capability to respond quickly to threats such as phishing attacks, malware and data breaches.

We have also established robust business continuity management and disaster recovery capabilities.

Overall, we regard digital security as an integral part of BRAC Bank's overall safety framework.