Written by The Banking Post
Pubali Bank PLC has sharply reduced its non-performing loan (NPL) ratio to 2.05 per cent and is now stepping up efforts to build a strong foothold in artificial intelligence-driven digital banking, marking a major turnaround for the lender.
The bank’s NPL ratio stood at 5.40 per cent at the end of September last year. However, sustained recovery efforts, along with regulatory support and partial write-off facilities, helped bring the figure down significantly by December 2025.
Managing Director and Chief Executive Officer Mohammad Ali said the bank shifted its strategy in response to changes in the classified loan-counting method that intensified NPL pressure in 2024. Instead of business conferences, Pubali Bank began holding monthly recovery conferences nationwide and maintained regular engagement with defaulted clients.
“We worked as a team. Our approach was gentle, and we helped borrowers understand the revised classification rules. That made a big difference,” he said, adding that motivating clients to regularise overdue instalments played a key role.
He said the current NPL level is likely the lowest in the industry and stressed the need to maintain momentum.
Once considered a problem lender, Pubali Bank has undergone sweeping reforms guided by short-, medium-, and long-term plans. “Across key performance indicators, our ranking now stands between first and third,” Ali said.
Despite weak private-sector credit demand last year, the bank maintained a balanced investment strategy, channeling half of its deposit growth into private-sector lending and the rest into government securities. This approach helped it post an operating profit of Tk 30.30 billion in 2025, one of the highest among private commercial banks.
Looking ahead, Ali said digital transformation is central to the bank’s sustainability strategy. Pubali Bank aims to lead in AI, big-data analytics, data mining, paperless banking, digital currencies, and blockchain-enabled services to enhance efficiency and customer experience.
“We have to achieve supremacy in AI and big-data analytics in the coming days,” he said, noting that global bank investment in artificial intelligence surged from about $250 billion in 2024 to $1.5 trillion in 2025.
He also warned that non-compliance has become a major risk in the current banking environment, stressing that executives who ignore regulatory standards face serious consequences.
“With increased scrutiny, any compromise on compliance would be extremely unfortunate,” he said.
