In Bangladesh's saturated banking market, rural customers are often overlooked. Citizens Bank PLC, a new entrant to the troubled sector, aims to tap into this underserved segment to grow its customer base, with a focus on strong and independent governance.

"Although there are many banks in the country, they have failed to reach a large portion of the population. Citizens Bank's goal is to serve those who remain unbanked," said Chowdhury Mohammed Hanif Shoeb, chairman of the bank, in an interview with The Daily Star marking its third anniversary.

The bank is expanding its branches, sub-branches, and digital presence in villages to that end, he stated.

Launched in July 2022, Citizens Bank has spread its presence across the country through its 20 branches — 10 in cities and 10 in rural areas — and three sub-branches so far.

"We have a target to open around 100 branches in the country. Once we reach that number, our main focus will be reaching rural people through sub-branches and digital channels," said Chowdhury.

"We want to launch branches in rural areas so that people gain confidence in us. That way, we can attract deposits from them and remittances from abroad. We aim to see our deposits grow based on core deposits from individual savers, which can help boost the bank's sustainable deposit base," he noted.

The banker also pointed out that deposits from concentrated groups may create risks. "Our goal is to keep our loan ticket size small so that the default of any single loan cannot significantly harm the bank."

Initially, Citizens Bank plans to grow by catering to small and medium enterprises instead of large borrowers. "Once the bank grows, we will target large corporations."

The bank's chairman further noted that catering to SMEs is costly, but the bank aims "not only to make a profit but to serve the nation".

Citizens Bank was incorporated as a public limited company in December 2020. But due to a number of domestic and global challenges, including the aftermath of the Covid-19 pandemic, the Russian invasion of Ukraine, and a lack of confidence among depositors, its launch was delayed by two years.

"While several banks faced difficulties in returning depositors' money, Citizens Bank did not face any such problem as its advance-to-deposit ratio is very healthy and its investments are also very prudent," its chairman stated.

The bank also did not face any challenges during the period when the central bank fixed the interest rate in the banking sector, as it was not aggressive in collecting deposits during its initial phase.

'No loan on board influence'

Chowdhury believes that customers will choose his bank among a myriad of others as it provides "better services, prioritises strong corporate governance, and has a deep connection with people".

"We are not here merely to make profits but to provide better services to the people — profits will come naturally," he said.

"From the beginning, the sponsors of this organisation had a firm commitment to transforming it into the most acceptable and trustworthy financial institution, and all our efforts have been directed toward that goal since inception," he further stated.

After three years of operation, Citizens Bank's total asset base stands at Tk 1,910 crore. It has 274 employees working across its branches and sub-branches. During this time, it has attracted a total of 16,176 depositors.

The bank has set up 16 ATM and CRM points. It also allows card transactions across all ATMs under the NPSB, Q-Cash, and Visa networks, said Chowdhury, who is also the CEO and managing director of Salma Group.

As of December 31, 2024, the bank's paid-up capital stood at Tk 400 crore, and its capital-to-risk-weighted-assets ratio was 46 percent — far above the required rate of 12.5 percent.

Its total deposits amounted to Tk 1,429 crore, and the disbursed loan amount stood at Tk 827 crore. Its net profit was Tk 3.95 crore, translating to earnings per share of Tk 0.11.

Although it was required to go public within three years, the board now plans to enlist the bank on the stock exchanges in 2027.

Chowdhury noted that he is aware of how a lack of governance has ruined many banks.

"We do not interfere in management decisions. We only monitor whether the management is running the bank properly," he said regarding governance in the bank.

"We have created a mindset that no loan will be sanctioned based on connections or board members' requests. We have realised that the banking sector faces difficulties mainly due to such practices."

"When corporate governance breaks down in a bank, it can be severely harmed. That's why we are giving management the independence to operate," he said.

Outlining the bank's next two-year target, the chairman said the deposit size is planned to be raised to Tk 5,000 crore while maintaining an advance-to-deposit ratio of 70 percent.