Mutual Trust Bank (MTB) is expanding its digital services to cater to Generation Z while diversifying its loan portfolio to reduce its concentration in wholesale lending.

"We are prioritising digital banking because the future belongs to digitalisation and Generation Z," said Syed Mahbubur Rahman, managing director and chief executive officer (CEO) of MTB, in an interview with The Daily Star.

"If we don't adapt to the digital landscape, we will fail to reach modern customers who want banking on their terms," he said.

To mark its 25th anniversary, MTB has introduced a new logo reflecting the dynamism of youth. "Young people are leading in various fields, and we wanted a brand identity that resonates with them," Rahman said.

MTB's Smart Banking app is considered one of the best in the market, allowing customers to conduct banking transactions from anywhere. "Our customers consistently praise the app, which was developed in-house," he added.

MTB is shifting away from its previous dependence on wholesale loans – typically lending to large corporate clients.

Rahman said when he joined the bank, about 90 percent of their loans were in the wholesale category. "We've brought that down to 80 percent, with 20 percent now allocated to SMEs [small and medium enterprises] and retail clients."

"Our goal is to further reduce wholesale loans to 60-70 percent in the next three to five years," said the CEO.

Moving on, the top banker emphasised MTB's governance structure, which he said is supported by a capable board of directors and a skilled workforce.

"MTB has one of the best-governed boards in the country. If anyone talks about good governance, our bank comes first," he asserted.

Norfund, the world's largest sovereign fund, holds a 5 percent share in MTB, making it the single largest shareholding entity.

"We continuously train our workforce because, at the end of the day, banking is about selling services," Rahman said.

MTB's operating profit in 2024 stood at Tk 1,106 crore, registering a 38.5 percent growth from the previous year. As of December 2024, total deposits reached Tk 33,187 crore, while loans and advances stood at Tk 30,105 crore.

"We raised a record Tk 5,000 crore in deposits last year, driven by our aggressive deposit mobilisation efforts," added the banker.

The private commercial lender is also improving its loan quality. "We are working on resolving legacy non-performing loans [NPLs] that became problematic in 2015. We hope to clean up these issues in the next few years," he added.

The banking industry faces growing NPLs and liquidity constraints, but Rahman believes MTB's governance has helped it remain stable. "Despite sluggish trade and business, our loan and advance portfolio grew last year," he said.

According to the CEO, while many banks struggled with foreign currency shortages, MTB remained resilient. "We maintained a strong focus on liquidity, both in foreign and local currencies," he said.

As of last year, MTB had 120 branches, 51 sub-branches, and 341 ATMs (automated teller machines) nationwide.

Rahman acknowledged the challenges following last year's political changeover. "Many factories shut down, workers came up with different demands, and the business climate was difficult. However, things are now improving," he said.

However, credit growth still remains slow at 7.6 percent, raising concerns. "Stagnant investment is harmful to the economy," he said, adding, "Without new investments, economic activity and employment generation will suffer."

To attract foreign direct investments (FDIs), he advocated legal reforms and a better investment climate.

"Bangladesh is lagging behind in attracting FDI, and much work is needed to improve the situation," he said.

For the country's economy, Rahman believes stability should take precedence over growth. "Liquidity management, law enforcement improvements, and economic stability are more critical than high growth at this moment," he commented.