Dhaka Bank eyes top-tier status through digital, AI push

Dhaka Bank has set out a broad strategy to join the top tier of Bangladesh’s private banks by strengthening digital banking, expanding green finance, improving profitability, and adopting artificial intelligence.

In an interview with The Daily Star, Dhaka Bank’s Managing Director and CEO Osman Ershad Faiz said, “My objective is straightforward. I want Dhaka Bank to be measured against the best private banks in the country on all key indicators -- return on equity, asset quality, capital efficiency, customer experience, and digital capability -- and I expect us to lead in most of them.”

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As the bank marks its 31st anniversary, Faiz said his goals go beyond short-term gains.

“By the end of my tenure, I want to leave behind an institution that is stronger in every way -- financial performance, asset quality, digital strength, talent, and public trust -- than when I took charge.”

DIGITAL BANKING AND AI-LED TRANSFORMATION

Faiz said Dhaka Bank’s digital push is not limited to apps or online platforms.

“Anyone can launch an app and call it transformation. The real test is whether a customer can manage their entire banking needs without ever visiting a branch -- that is the standard I am setting,” he said.

A key example is e-Rin, a live product that enables instant loan approval and disbursement with minimal human involvement. The bank is now expanding this model to more retail and SME lending products.

It is also building a stronger technology workforce.

“A digital bank is built by engineers, data scientists, and product managers -- not just relationship bankers using new software,” Faiz said, adding that recruitment in these roles is underway.

Artificial intelligence and machine learning will play a central role in future operations. AI-based credit scoring is a priority, especially in the absence of a fully developed credit information system for small businesses and self-employed borrowers.

The bank plans to use alternative data such as mobile financial service transactions, payment records and mobile usage patterns to identify creditworthy customers.

AI will also be used for real-time fraud detection and customer analytics, allowing the bank to offer relevant products proactively instead of waiting for customer requests.

SME GROWTH, WOMEN ENTREPRENEURS AND GREEN FINANCE PUSH

The managing director said digital lending has significantly improved the economics of SME financing by reducing the cost of monitoring small loans.

He also highlighted women-led enterprises as a major untapped opportunity. “We are designing dedicated products and alternative credit assessment models for women entrepreneurs -- not because it looks good, but because the commercial opportunity is significant,” he said.

Green finance is being treated as a core business priority rather than a niche area. Faiz said future growth will depend heavily on financing renewable energy, climate-resilient agriculture, and sustainable manufacturing.

“The banks that build this expertise early will finance the country’s next generation of productive investments,” he added.

In 2025, Dhaka Bank disbursed Tk 580 crore in green finance, bringing its total green portfolio to Tk 660 crore, with plans for further expansion.

STRONG RESULTS, TARGETS AND BROADER ECONOMIC OUTLOOK

Despite a challenging sector environment, Dhaka Bank posted a record performance in 2025. Net profit rose 117 percent to Tk 279 crore, while return on equity more than doubled to 11.62 percent from 5.71 percent a year earlier.

“Doing this in one of the toughest years for the sector shows what this franchise can achieve with discipline,” Faiz said. “That is now the floor, not the ceiling.”

However, he acknowledged the bank still trails the country’s top performers and aims to close the gap over the next five years.

Targets include maintaining return on equity above 15 percent, keeping the non-performing loan ratio below 5 percent through the credit cycle, and ensuring most customer services can be completed digitally without branch visits.

Faiz, whose career includes roles at American Express, Standard Chartered across Asia, and AMTD Digital, said his outlook has been shaped by international experience.

“Having built businesses across several Asian markets, I have seen what separates fast-growing economies: a strong focus on skills, stable and consistent policies, and openness to global talent. Bangladesh has all the ingredients. What it lacks is not capability -- it is resolve,” he added.

Beyond banking, he pointed to pharmaceuticals as Bangladesh’s strongest long-term industrial opportunity, noting that it already meets 98 percent of domestic demand, grows at around 12 percent annually, and includes globally approved manufacturers, making it resilient as the country graduates from least-developed status.

Faiz also highlighted strong potential in IT services, driven by skilled labour rather than infrastructure, while calling renewable energy an economic necessity. The ready-made garment sector, he said, must move towards technical textiles, sustainability and higher-value production instead of volume expansion alone.

He added that remittance inflows should be channelled more into productive uses such as MSME financing and housing, rather than mainly into consumption.

On financial sector reforms, Faiz called for faster implementation of IFRS 9 -- the international accounting standard -- for earlier credit loss recognition, greater operational independence for Bangladesh Bank, full interoperability of mobile financial services under the National Payment Switch Bangladesh (NPSB), and the development of a strong corporate bond market.

“A functioning bond market would diversify funding sources, create new investment opportunities for institutional investors, and reduce concentration risk in the banking sector,” he said.