While more than a dozen banks in Bangladesh are struggling to stay afloat, Pubali Bank, which has emerged as one of the leading private commercial lenders, stands as a glowing example of how to traverse difficult times.

The lender had gone through ups and downs in the 64 years since it was founded before finally coming out on top through its performance, growth and innovation.

The bank has been able to maintain a low non-performing loan (NPL) to outstanding loan ratio and secured staggering profits over the last couple of years.

The bank's NPL to outstanding loan ratio was over 35 percent in 2000. But it was brought down to 6.25 percent in 2014 and then to 2.86 percent in 2023.

Last year the bank secured substantial year-on-year growths in profit (35.42 percent), deposits (19 percent), loans and advances (20 percent), remittance collections (42 percent) and import and export business (8 percent).

Moreover, every segment has continued to grow.

According to Managing Director and CEO Mohammad Ali, the secret lies in maintaining good governance under experienced management, strictly abiding by rules and regulations, undertaking timely initiatives, tackling political interference and focusing on financial inclusion and digital inclusion.

After Bangladesh gained independence, Pubali Bank was nationalised and subsequently corporate governance was destroyed and defaulted loans increased to 54 percent, Ali told The Daily Star in a recent interview.

The bank had started its operation in East Pakistan as Eastern Mercantile Bank in 1959. In 1984, the lender turned into an ailing institution and was denationalised and renamed Pubali Bank.

After denationalisation, the first responsibility of the board was to cover up its financial, managerial and operational weaknesses and establish a mindset that focused on ensuring corporate governance, Ali said.

The board needed 21 years, meaning till 2005, to fix those issues and the ups and downs during that period helped investors of the bank gain experience, he said.

Bangladesh Bank assigned an observer to monitor its activities in 2005 and withdrew the official in 2007, he added.

Now, Pubali Bank is the largest private commercial bank with 504 branches, 195 sub-branches, 21 Islamic banking window branches and the largest real-time centralised online banking network.

Till last year, deposits at the bank stood at Tk 60,629.64 crore and advances stood at Tk 55,449.55 crore.

The bank does not lend money to anonymous or paper-based companies, Ali said, nor does it compromise or bow down to political pressure, he said, adding that they have been able to create a quality asset base.

"Pubali Bank is now in the number one position in terms of the regulator's confidence and customer confidence," he said.

It also boasts the lowest amount of classified loans in the banking sector, said Ali, adding that they were able to maintain bad loans at less than 3 percent of all loans.

The bank is continuously progressing in offering digital banking services and has different products for different segments of the population, even senior citizens, he said.

It also always tries to ensure customer comfort through financial inclusion and digital inclusion.

The board of directors of Pubali Bank adopted policy measures that are helpful for maintaining the corporate governance at the bank.

The commitment of the board of directors is the main issue here, explained Ali.

When discussing digital inclusion, Ali said it would ensure the survival of the banking sector in the future.

"Now banks must focus on digital inclusion," he said.

A CEO of a bank will have to spend 50 percent of his or her time on digital inclusion and will have to take the right decision at the right time, he added.

Digital inclusion helped to expand the portfolio, Ali pointed out.

"Every employee of a bank must adapt to a digital environment. Banks must focus on business, digital inclusion and financial inclusion. Now there is no option to survive without digital inclusion," he said.

"When I joined Pubali Bank, its loans and advances stood at Tk 6,500 crore 16 years back. But now loans and advances at our principal branch stand at Tk 8,500 crore," Ali said.

The bank is maintaining balance in export and import, which will help mitigate the forex crisis. All of the bank's segments are growing, he said.

AK Khan, OR Nizam, MR Siddiqui, Khan Bahadur Mujibur Rahman, Mirza Mohammad Ali Ispahani, Habibur Rahman and Dr Naimur Rahman were some of the notable sponsors of the bank.