Obayed Ullah Al Masud, 
Chairman, Islami Bank Bangladesh

The Daily Star (TDS): Your bank has recently achieved an annual operating profit surpassing Tk 2,000 crore. What does this milestone signify for your organization ?

Obayed Ullah Al Masud (OUAM): In 2024, Islami Bank Bangladesh PLC continued its strong performance, achieving an operating profit that surpassed Tk 2,000 crore, maintaining the trend of previous years. This achievement is particularly significant considering the challenging environment the banking sector has been navigating, shaped by factors such as an unusual liquidity crunch, a volatile foreign exchange market, soaring inflation, and rising non-performing loans (NPLs). It not only reflects our financial strength but also highlights our capacity to adapt to and thrive in difficult times.

This success is also a reflection of the bank's strong board of directors, whose prudent decisions have guided the bank through these turbulent times. The board was formed in response to the national call to protect depositors' funds. It reformed the management, set up independent audit firms, motivated employees, and worked diligently to restore good governance. Within just five months, the board succeeded in adding fresh Tk. 8,500 crore in deposits. This strong fund mobilization, along with the operating profit exceeding Tk 2,000 crore, underscores the effectiveness of the board's strategies in safeguarding depositors' funds.

TDS: What key factors have contributed to reaching this milestone despite the current challenges in the banking sector?

OUAM: Our operations are guided by adherence to Shari'ah principles, complemented by effective funds and risk management strategies. Islami Bank strategically deploys funds across sectors like SMEs and microfinance, holding the largest market share in the import-export business. The bank also collects around one-third of the country's remittances, significantly contributing to our revenue. In 2024, our total investments surpassed Tk 1,57,600 crore, with profits rising due to increased investment returns. The use of cost-free and low-cost deposits further boosted profitability. Total deposits reached Tk 1,61,000 crore, with cost-free deposits accounting for 13%. We also saw strong performance in Offshore Banking Units and Shari'ah-compliant securities.

TDS: Looking ahead, what strategies do you have in place to ensure continued growth and adaptability?

OUAM: By embedding Shari'ah values in our business, we aim to strengthen our ethical foundation and ensure all operations align with these principles. Our focus is on balanced growth, efficient resource use, and cost-effective, accountable Strategic Business Units (SBUs). We will build resilience through a sustainable financial ecosystem that adapts to market dynamics. Enhanced connectivity, customized services, and advanced digital banking will boost customer satisfaction and trust, while good governance and professional ethics will be prioritized across all operations.

TDS: In your view, what are the most critical areas for reform in the banking sector, and how should they be addressed to ensure long-term stability and development?

OUAM: Tycoons linked to the former administration have siphoned off $17 billion from the banking sector, highlighting the need for reform. Strengthening the regulatory framework is crucial to addressing scams, embezzlements, and misappropriations, with strong initiatives needed to recover these funds. Regulators must adopt Basel III standards, enforce anti-money laundering and terrorism financing regulations, and conduct regular stress tests. Corporate governance must also be reformed, with clear accountability for board members, independent audits, and stronger whistleblower protection. Addressing non-performing loans (NPLs) requires effective credit risk management, asset reconstruction, and quicker insolvency resolution, while integrating ESG factors into decisions.