Speaker #1: Good afternoon, everyone. A very warm welcome to Citybank PLC's earnings disclosure web event for the 3rd quarter of 2026. I'm Zain Anjum, and it is my pleasure to be your host for today's session.
Speaker #1: Thank you for taking the time to join us, and for your continued interest in Citybank. Today we have here amongst us the Honorable Managing Director and Chief Executive Officer, Mr. Mashur Ariffin, Additional Managing Director and Chief Financial Officer, Mr. Mohammad Mahbubur Rahman, Deputy Managing Director and Head of Wholesale Banking, Mr. Misbaul Asif Siddiqi, and Chief Risk Officer, Mr. Mohammad Firoz Alam.
Speaker #1: Unfortunately, due to some official engagements, Deputy Managing Director and Head of Internal Control and Compliance, Mr. Akain Saifullah Kawsar, is unable to join with us today.
Speaker #1: At Citybank, we take great pride in engaging the investment community in our endeavors. While disclosing our performances and actions, we adhere to a strict code of full transparency and responsibility.
Speaker #1: Citybank has always measured its success not only in terms of its bottom-line numbers, but also in terms of the goals it has set for itself in order to become one of the finest banks in Bangladesh.
Speaker #1: Our success is attributed to the continued growth of our business, as well as the market's evolution to satisfy the increasingly sophisticated expectations of our respected clients in the areas of liquidity, service, reliability, and mobility.
Speaker #1: We have made it this far with the help of our community, team, and stockholders by tenaciously adhering to the motto of service and trust.
Speaker #1: In light of this, we have gathered here today to discuss the bank's current financial situation and its forward-looking strategies. We will begin today's session with a presentation on the bank's financial performance, delivered by our AMD and CFO, Mr. Mohammad Mahbubur Rahman, which will be followed by remarks from our Managing Director and CEO, Mr. Mashur Ariffin, who will share his perspectives on the bank's performance and strategic priorities, and we will finally end with a Q&A session.
Speaker #1: Before we proceed, I would like to inform you that while scheduling the event, we attempted to choose the most fitting time slot so that we could accommodate most of the participants both from local and foreign vicinities, and time zones.
Speaker #1: I would also like to add that we have opened up our Q&A portal, which you can see at the bottom right corner of your screen.
Speaker #1: During our presentation, you can log in and place any relevant questions in the window. We shall try our best to address them in our Q&A session depending on the time available for the program.
Speaker #1: With that, let us begin with today's proceedings. Ladies and gentlemen, I now request our AMD and CFO, Mr. Mohammad Mahbubur Rahman, to start with the financial performance presentation.
Speaker #2: can you see my presentation?
Speaker #1: Yes, sir.
Speaker #2: Okay, thank you. good afternoon. Ladies and gentlemen, thank you for joining Citybank's 3rd quarter 2026 earnings disclosure session. it's my pleasure to welcome you all.
Speaker #3: Our valued shareholders, investors, analysts, and other stakeholders. today I'll, take you through our financial and business performance for the 9 months ended September 2026.
Speaker #3: first, I'll start with the macroeconomic and industry outlook. we all know that our, at, sorry, okay, sorry. our, we are actually, facing, some economic macroeconomic challenges.
Speaker #3: but at the same time, we are seeing, some positive, outcome at the same time. So our, projected GDP would be 4.1%, our last completed financial year, for 2025, that's growth rate was 2.3.5%.
Speaker #3: So considering the historical, high GDP growth, this is definitely, very low, GDP growth. but, but, but we, can say that, considering our, various development plan, we can also achieve higher deposit growth, our higher GDP growth again.
Speaker #3: inflation was one of the, major concern for the policymakers of the country. but it has moderated to, to 8.3%. and also, regulators and, policymakers are working, for, reduce it further, though there is a lot of supply-side challenge, globally.
Speaker #3: but the good news is that, we, we have observed, various, grow, very good picture in, foreign exchange, account. for example, export has grown, from the beginning of the new financial year, by 6.5%.
Speaker #3: Import has grown by 9%. remittance has also grown by 13.2%. foreign exchange reserve has reached 3.31.2 billion dollars, considering the IMF calculation method. Current account balance has also become positive with 0.6 billion dollars.
Speaker #3: So on foreign account, position, country is actually, observing, very positive, outcome recently. but, the private sector credit growth is, is subdued. the September, figure shows that our, credit sector growth is only 4.2%.
Speaker #3: so, this is the major concern for the industry. But again, with the, GDP growth, higher GDP growth, and, by overcoming, some macroeconomic situation, we, we are expecting to have, higher credit growth in coming days.
Speaker #3: NPL ratio for the industry, is a concern. it is around, 33%. but if you consider the pure bank NPL ratio, you'll see that, good banks are actually having very strong NPL ratio, very good within 3%.
Speaker #2: Right, sir.
Speaker #3: Okay, I've just heard that, you can see the slides, so I'm just, sharing, I'm, I'm redoing it, okay? you haven't seen the slide?
Speaker #2: Mahbub, Mahbub, I saw the slide. Very clearly.
Speaker #3: But yeah, sorry, that's it.
Speaker #2: But no need, no need to redo. We do not know. So just continue.
Speaker #3: Okay, okay, okay.
Speaker #2: Yeah, yeah, the slides are here.
Speaker #3: Yes. So now I move, move on to the, Citybank's performance side. so, Citybank, in 9 months, experienced 7.8% loan growth. so it is a very encouraging, performance, I would say, because considering the country's 4.7% credit growth, Citybank has achieved much higher credit growth, and, interest income has also, grown by 5.7% year on year.
Speaker #3: so it has reached 242.5 billion taka. Our, loan and advance has reached, 545.8 billion taka. Yield on advance is also remain almost same. so despite having a downward pressure on the yield, we are still maintaining good yield, in our loan portfolio.
Speaker #3: and, this slide actually shows that, we are, we have successfully diversified our portfolio. if you, few years before, our, most of the loan come from wholesale banking, their contribution was 60, 60%.
Speaker #3: We have brought down from 60% to 56%. And which has been taken, taken up by, retail, retail, small microfinance, medium segment, and car. So, this actually this is, is showing that the, diversification strategy of the Citybank is going, very well.
Speaker #3: deposit on the other hand, is one of the strength of the Citybank, and you can see that, which has, grown by 2.5%, in 9 months, and reached 700, 74.04 billion taka.
Speaker #3: And interest rate on the other hand, interest expense on the other hand actually increased only by 1.9%, because, because of the increase of our deposit and the strengthening of the liquidity, we could actually, reduce our borrowing cost drastically.
Speaker #3: So because of that, the overall interest expense has not increased. So also cost of deposit almost remain at the same level. so, rather, we are expecting that this cost of deposit will go down in coming days because the li market is enough liquidity, y, liquid, liquid, and, and depositors are parking their hard-earned money to the, reputed strong bank.
Speaker #3: So Citybank is one of them. Deposit, most of the deposit is coming from retail. You can see from the price chart, 66% is coming from retail and wholesale banking also strengthening their cash management, and their counterparty 24%.
Speaker #3: And this year also in 9 months, we have added 328,000, number of, current and current and savings account. It also, it is showing that Citybank is maintaining very strong reputation, service excellence in the market.
Speaker #3: So customer are actually opening new accounts with Citybank. in numbers. so, we are, so though actually there is pressure on the, on the, on the, yield, we are maintaining, the, spread, successfully.
Speaker #3: which is, the current one is 4.9%. It was 5% 10 basis point decline is there, but, we are expecting the de, decrease of deposit cost further.
Speaker #3: So we are very much hopeful to maintain, this level of spread in coming days. Investment, as we are, we are acquiring, huge number of deposit and also credit growth is not that much, so we are, we are actually parking our money in tragedy bill and bond.
Speaker #3: and, it has increased in, by 73% in 9 months and reached 360.1 billion taka. And, and income has increased by 8, 8.2% year on year and reached 30 billion taka.
Speaker #3: The yield on treasury bill and bond naturally, is coming down and, we are actually at this moment investing short, with short-term treasury bill, and we are still holding high yield, long-term, treasury bond.
Speaker #3: So in coming days, we are expecting to have, a good return from our long-term bond. So it is another strong area of Citybank, the foreign ex foreign exchange, position, business of the Citybank.
Speaker #3: our export is growing by 14.3% in 9 months, which, which reached 2.9 billion dollar. so countries export growth is around 6%, but, we have experienced much higher growth in our export business.
Speaker #3: Import business has increased by 57.5% and reached 4.4 billion dollar. So it is, it's also shows that, not only in retail market, in corporate market, Citybank has also, striving very strongly and, and, and supporting the countries' import requirement.
Speaker #3: And, so, and we are, we, we have actually, developed, capacity to, to book very high, value letter, let LC business. So this has also helped us to increase our commission income by 17.2% year on year, and, the income has increased from 5.2 billion taka to 6.1 billion taka.
Speaker #3: FX gain also has also increased, similarly. Credit card business is, is another, strength and, of Citybank. Citybank is, is the, is, is the, the strongest credit card, player in the market.
Speaker #3: And our credit card base has increased by 7.2% in 9 months. we are holding almost 800,000 card. And credit card bill income, has increased by 17.8%.
Speaker #3: So it has also shown the quality of our customer, that even during these, macroeconomic, difficult situation, our cardholder are, holders are expending, quite a lot.
Speaker #3: And credit card income has also increased by 30. 35 per, 35% year on year. Revenue, altogether has increased, on a solo basis and a consolidated basis as well, on solo basis it, it has increased by 14.3% year on year, which reached 40.7 billion taka.
Speaker #3: So consolidate, revenue also also increased to 40.41.6 billion taka. Operating expense has increased, significantly also, with 21.7%. Main reason of, increase of operating expense is that we are expanding our business.
Speaker #3: We are, as we are actually having huge growth in retail SME, so we are hiring new people. We are, opening new branches. number of, branches has, has crossed 250, which was below 200 even, one year before.
Speaker #3: So we have opened, many branches. We are expanding our agent network. And also, we are actually, developing the, our IT capacity. And, to actually, address or, or actually to, to start our digital banking initiative in coming days.
Speaker #3: And AI related activities are also going on. So because of that, actually, the, we are investing quite a lot. So this has increased operating expense because of the depreciation, higher depreciation, higher maintenance fee as well.
Speaker #3: So after, after deducting, operating expense from revenue, we get the operating profit, which has increased by 8.9%. and, year on year, and the operating profit reached 22.7 billion taka.
Speaker #3: on a, consolidated basis. Then from operating profit, we deduct, debt charge. So debt charge has decreased from last year, compared to last year. by 14.2%, and we charge 7.5 or 7.6 billion taka in 9 months.
Speaker #3: NPL ratio here actually showing 4.1%. And, we have actually mentioned that the PR bank NPL is 3%. So you may ask that why our NPL ratio is, is above 3%.
Speaker #3: Actually, we have strategically, downgraded some portfolio to, to actually, address the problem, before the end of the year. And we are actually basically expecting to, to, to recover, from this, portfolio at the same time, we have to take a full preparation full provision for write-off, as required amount of, bad debt.
Speaker #3: So, so if we could write off, actually, because of the, time constant, we couldn't actually write off some of the portfolio. So if we could write off, our targeted, portfolio, this would have been below 3%.
Speaker #3: So we are targeting to have, be below 3% NPL ratio before, end of the year. And provision coverage ratio will also improve, to around 120% at the end of the year.
Speaker #3: These are the actually summary result of our four subsidiaries. so with, here actually nothing, important to mention. All are actually earning profit, and there is no, actually, major risk related to this, subsidiaries.
Speaker #3: So considering, their, contribution, our profit after tax EAT has increased by 20.1%, year on year, in 9 months. And reached 8.6 billion taka from 7.2 billion taka.
Speaker #3: So, so our profit bottom line actually has actually improved significantly. And we are actually continuously giving higher return, for last few years. So return on equity, which is, which reached 17, on a consolidated basis, 17.2% on a solo basis, 18.47%.
Speaker #3: Because of increase of our, capital gain, or reserve, actually our equity has increased and also the, because of the increase of the return earning, the equity portion has increased actually.
Speaker #3: That's why ROE is showing little bit lower compared to last year, but we hope that before the end of the year, we'll be able to, maintain the high level, return on equity like before.
Speaker #3: And return on asset, here you can say, it's also remain very strong with 1.23%. Earning per share is, 6, on a consolidated basis, 6.6 and a solo basis, 6.3.
Speaker #3: In 9 months, book value has also increased, to 38.09 on a solo basis, 41.5 on a consolidated basis. Capital execution ratio, which is actually, which has reached 16.4% on a solo basis.
Speaker #3: And consolidated basis is, is 16.1%, which is highest ever in the Citibank history, which shows that Citibank has the ability to grow much faster in coming days.
Speaker #3: We have built a very strong capital, because we have completed, the 1,200 crore taka subordinate bond, this year. so this has actually increased our capacity to expand our balance sheet further in coming days.
Speaker #3: This is the actual rating of our bank, Citibank is rated AAA by the, the leading, lead, rating company in Bangladesh, CRAB. And, and, Moody's rated, has rated Citibank as a B2, which is capped by the country's credit rating.
Speaker #3: all credit rating, agencies actually has highlighted the strong capital base, strong profitability, strong liquidity, our strong, retail profile. so only concern is the, is the, is the end current, interested NPL, NPL, non-performing loan.
Speaker #3: And for which also we have actually developed, additional provision and for, and also capital. So the, here actually I, I like to highlight some of the major, actually, business event that our business success that we have experienced this year.
Speaker #3: retail book, we are, we are maintaining leading position in the, in, in, retail business in the industry. And it, this book has reached 103 billion.
Speaker #3: So it's a kind of milestone for the bank. But. We have started bank assurance last year already. We have, we are holding 40% of the market share.
Speaker #3: So, and, and also the trade business, in 9 month, last year, in full year, we have actually achieved 8 billion dollar of trade business.
Speaker #3: This year, in 9 months, we have achieved almost 8 billion dollar. So you can see that, the growth in trade business is going on very strong.
Speaker #3: And this will, this has already become very strong, pillar for the bank. And in coming days, it will actually give more, more return, definitely.
Speaker #3: Then nano lending, which also actually, preeminent success for the bank. Already we have opened 44.3 million account. in last, four, three, four years. And we have, disbursed 100, 200, 129 billion, taka.
Speaker #3: So in terms of taka is not that big, but as a ticket size is only 2,800 taka. So this has actually, actually given us a confidence that, our upcoming digital initiative should actually give much better result in coming days.
Speaker #3: So, here you can see that we are, out of this total, customer acquisition, 62% is coming from rural. 23% is coming from female, bank female.
Speaker #3: So it has actually given us, very good, platform, to expand our digital business, in future. this time actually we are not giving details of our ESG, performance, but, we have actually recently published our, our fi our ESG report, fast comprehensive ESG report.
Speaker #3: So you can, you here actually you will get all the detail. And, when actually we'll give, our, annual, performance, then we'll actually, give a detailed ESG activities.
Speaker #3: so here actually I like to actually mention some of the accolades that we have achieved this year. this year, for, this year we have actually awarded as the best bank in Bangladesh.
Speaker #3: so, by finance Asia. so this is, one of the, very prestigious award in the banking industry. Citibank, Citibank, internet banking, City Touch has been awarded one of the most innovative solutions, by, by, by, by, by, fintech, platform.
Speaker #3: So Citi, City Touch, presence, strong presence in the market is very, very much appreciated, by the, by the, by the concern sector. also, in ESG, we have got, four major recognition, actually, from UN, global compact network of Bangladesh.
Speaker #3: So this also prove has proven that, our e our initiative in ESG is, is also going on very strongly. So these are the few awards, I'm not actually going into detail.
Speaker #3: So with this, actually, I like to conclude, my presentation before, before, finishing my presentation, I like to say that, despite having, def, challenging and macroeconomic situation, Citibank is, is, giving continuous, better performance, better return every time.
Speaker #3: And we are not just, giving the only the better return. We are also, developing our capacity, to, capture the untapped, opportunities from the untapped market in Bangladesh.
Speaker #3: So with that, I'd like to end my presentation. Thank you.
Speaker #1: Thank you so much, sir, for such a comprehensive presentation and detailed overview of the bank's financial performance. Ladies and gentlemen, it is my great pleasure to invite the managing director and CEO of Citibank PLC, Mr. Mashru Arifin, to speak about the views and forward-looking strategies of the bank.
Speaker #1: Over to you, sir.
Speaker #2: Thank you, Zareen. thank you, Mahbub. You have been very crisp and, to the point. And, honorable, investors and, others, ladies and gentlemen, thank you for joining us at our, earning disclosure for quarter three.
Speaker #2: after, whatever has been said by the chief financial officer, Mahbubur Rahman, there is hardly, you know, anything there for me to add. But I would like to still mention just a few things.
Speaker #2: That, we are a bank, it's a challenging time, he said. Of course, it's challenging time for us because you know, credit growth is very slow.
Speaker #2: Investment climate is little depressed. But you know, when the credit growth is at around 4.5%, you have seen that, you know, Citibank's loan book grew by 8%.
Speaker #2: And they are also, I can add, a few things that, you know, our retail book, which gives us a small ticket loans, you know, has grown by 17%, in this time.
Speaker #2: While the reflection of the country's overall credit growth is very much there in the growth of the corporate lending book, which has grew by 4.3%, which is quite similar to the country's credit growth.
Speaker #2: So, at the same time, you know, so and, and, and our card business has grown by 9%. So, we are and, well, while card and retail 17 and 9%, you look at the number of small business of Citibank, it has grown by 8%.
Speaker #2: So that, basically tells you the strategic direction of the bank, that, in this kind of climate, when corporate bank, they w-whichever way you push them, since, you know, there is a slowdown in economic activity due to war and due to the energy and fuel crisis, they will not be able to, to, to, to achieve that kind of a growth.
Speaker #2: So central bank has given us a lot of new incentives and policy packages. We are trying our best also to bring some growth in that area.
Speaker #2: But that is tied to the macro-level growth of the economy and also, you know, cooling down of the global, in, in the temperature, not in that temperature sense, but in the temperature that's prevailing due to the war and other few, you know, global, issues, which you understand what I mean.
Speaker #2: The US election results and all will ultimately, you know, for a country like Bangladesh, it will all turn out to be good thing for us.
Speaker #2: We can only hope. So, until that time, I would like to say that till that time, the corporate and medium business grows, again, satisfactorily.
Speaker #2: Citibank has built the capacity in retail, cards, and SME, small business. So, that is very much reflected in the growth number, 17, 9, and 8%.
Speaker #2: So this is a strategic move that we took long ago. And, plus also another move is that, you know, digital loan area, digital nano loan is still, we are the only bank giving it right now.
Speaker #2: Since inception, we have given 12.9 billion US dollar equivalent BDT. A-as loan. And this year, you know, in that area, growth has been 110%.
Speaker #2: It was only 6.7 billion taka, on January 1st of this year. And right now, today, as I'm talking, the outstanding book is, you know, 14.10 billion taka.
Speaker #2: So it has, it has, it has achieved good growth. And that also gives us, kind of a signpost for the future, what is future going to be looking like after, you know, having various strong presence in the digital market with our City Touch app and the Blink app that is coming, you know, banking in a blink, loan in a blink, deposit in a blink from Citibank that is also coming.
Speaker #2: Another app is coming for, for specially, you know, to capture the market with QR codes, to, to, to, to, to get into the business of dealing with the, you know, cash sell and, you know, cash buy.
Speaker #2: Add the shops. So we have big plan there. This much on the growth side. And, another thing is, our trust. Industry is, industry is, you know, customer deposit growth is 11%.
Speaker #2: Cities is double of that. 22% in nine months time. So that shows, you know, how much customers like us, like us, and also like few other banks handful of banks only.
Speaker #2: And then actually, it is, it is the only word is, is used as an emphasis, you know, to, to, to tell you that, truly we are, we are loved by our customers.
Speaker #2: We are growing at a 22% in deposit side. And, we need to manage this fund. And by managing this fund, smartly, in a depressed credit growth climate, we have given you 20% growth in profit after tax.
Speaker #2: That's all I wanted to say. And you will see, you will see that government securities related income has really increased. But we have, we have planned it accordingly with, between the held for trading and held for, held till maturity.
Speaker #2: There are both kinds of investment. We have planned the maturity in such a manner that when the credit growth starts, we can liquidate the held for trading book.
Speaker #2: And, we can fund the new loan disbursement that we may expect from corporate and medium business soon after this, you know, depression cycle gets over.
Speaker #2: And which will be over. Government is trying is very best. It's a new government. People have trust on it. And the banking sector related, you know, mismanagement, those days are also over.
Speaker #2: overall, you know, the way things are going, I am only hopeful that, you know, this downturn is only temporary. Now, now another phenomenal thing is that, you know, so another phenomenal thing is that, I'm sorry, I was talking about, you know, held for trading book.
Speaker #2: They are also we are, we are maintaining right amount of, you know, reserve. So that, you know, when the, when the interest rate, if it goes higher, which right now there is, I do not see much of a possibility, you know, so that still we can absorb the shock up to 4% of increase in, in interest rate bill bond rate.
Speaker #2: So we are smartly trying to manage our, you know, the deposits that customers are giving us. And, good thing is that, you know, loan yield, return is above 10%, 10.36%.
Speaker #2: Cost of deposit of Citibank is still, you know, by intention, we pushed it up. It was around 4%. Now it's 5.5. We needed more deposits because, you know, the, the climate was favorable on the government securities investment side.
Speaker #2: So it was a, a very much, what you call it, planned step that we took. So after that, if I may add something, I must talk about the trade business.
Speaker #2: The same corporate bank, they have contributed 97% of the Citibank's becoming number one in trade business in nine months time. Nine months, in nine months, as Mahbubur Rahman said, last year in 12 months, we achieved 8.01 billion dollar trade business.
Speaker #2: And in nine months, we have done 7.9, meaning 8 billion dollars. So almost same, same. And that's the reason you will see 22% growth in commission and exchange gain.
Speaker #2: And Mahbub mentioned that already. So I will not get into that. But I, I, I fully praise, you know, corporate bank in a market like this, when they're going for non-funded business, because trade as, as he has shown, you know, export, import, both are growing.
Speaker #2: On a. Curve, you know, dollar side of Citibank is very much stable with, you know, right amount of, you know, NOP and within net open position, there is almost, you know, not almost, there is never any breach by Citibank.
Speaker #2: We are managing it nice. We have very good remittance flow and Asif, our head of wholesale banking, who is here, has very good export book as well, along with Azum, our head of medium business.
Speaker #2: So, in, in October, also, no, sorry, just to give you a snapshot, in October, only in one month, we have done 1.109 billion dollar of trade.
Speaker #2: And that is not only in October, that has happened consecutively for two months. So, corporate bank focusing on the right thing where there is, you know, little lack of demand for, you know, big expansions and all, and the factories and others, they are focusing on trade.
Speaker #2: And, trade team and other teams and banks, FI team, they have done a tremendously good job there. Now I would just, you know, mention about, the about something that media continuously asks me.
Speaker #2: I think this should be cleared. This should be cleared that you're interest income is much less than your investment income. See, honorable investors and others, you know, the thing is that, you know, after we earn, interest income, which was 42 billion 42.55, billion BDT in, in nine months time, out of that, you know, 39.31 billion was interest expense.
Speaker #2: So net interest income net profit from that is, you know, 30, 3 point, you know, 2, 3 billion BDT. So whereas investment income is showing 30 billion BDT income.
Speaker #2: And this has creating confusion because of the format. That your interest income is 3.23 billion taka in nine months and your investment income is 30.01 billion taka in nine months.
Speaker #2: Of course, prima facie, if you look at this, that way, it, it, it, it gives you that kind of a feeling. But to be honest, you know, out of the interest, expense that we have taken 39.31 billion, 19.13 billion should be should be deducted from investment income.
Speaker #2: That much of a deposit and repo cost we took for the investment income. What is happening is total interest income from, loan book after that you are deducting total interest expense from that earning, 42.55 minus 30.3, 39.31.
Speaker #2: So you are saying 3.23 billion income. Actually, what you have done is 19.13 billion dollar 19.13 billion taka should be deducted from, 30.01 billion taka investment income showed in the bank's profit and loss account.
Speaker #2: I, I don't know if you have confused you or not. Further, if I'm sorry, if I have, I mean to say that investment income shown on a gross basis without deducting the interest expense.
Speaker #2: And interest expense, total input under just below the interest earning or interest and profit from loan book. So that book is getting hugely deducted.
Speaker #2: 19.13 billion. So to be honest, you know, if you, if you, if you do this, in a way that, you know, how much of an interest expense you have done against your loan book and how much of an interest expense you have done against your investment income, from treasury bill bond, then the figure will reflect.
Speaker #2: I, I would conclude it here by saying that 19.13 billion investment income related interest expense got added to the loan related interest expense. In another way, this is how I wanted to tell you.
Speaker #2: This is one. And, you can also see that, you know, cost to income ratio showing is 45%. But interestingly, you know, operating income in nine months time is showing that it has grown by 14.3%, whereas expense has grown 21.7%.
Speaker #2: Mahbub already mentioned Citibank has a strategic intent. We are only this kind of a thing is, is, is, is temporary. Wait till the year end, you will again see that, you know, Citibank's these PAT of 8 point, you know, 6, 7 billion, which is 20% growth from last year's first nine months, you know, it will surpass definitely annualized annual basis will do much better than last year's last year's 132, billion, sorry, 13 point 2 billion taka, PAT that we have done last year, 13.26 billion.
Speaker #2: This will be a better year and that time these jaw, which is now showing negative, it will show right kind of jaw hopefully, inshallah.
Speaker #2: I'm, I'm quite sure that our third quarter is going to be much better than historicals. If you look at Citibank, interesting case that is first quarter is second quarter goes quite slow.
Speaker #2: Third quarter picks up. That's the reason 20.1% PAT growth. And in the last quarter, you will see that from straight from 8.67 billion, we will go we, we hope, we hope we hope, to, to post a profit, you know, much higher than last year's 13.26 billion.
Speaker #2: I, I cannot tell you the number, though there is a projected number in our heads. So again, ROE will be good. On the provisioning side, you know, this year we have kept, you know, there is another question regularly comes on the provision that in the nine months loan provision expense of this year, is, is, you know, is, is, is, is a smaller loan provision expense of, last year, last year's it was, it was, 800, 8.72 billion this year we have.
Speaker #2: 7.26 billion. To be very honest with you, I think Mahbub also high little bit, you know, he touched upon this. This 7.26 billion also was actually not needed.
Speaker #2: There, out of that 4.51 billion is kept under general provision. As cushion for future, you know, loan provisioning requirement that we will need. We'll do certain write off.
Speaker #2: We'll absorb all this with the, you know, because of the economic slowdown and all. We needed to keep this cushion. I mean to say that if you, if you say 8.72 has become 7.26, why Citibank has not kept enough provision?
Speaker #2: I would like to answer that out of the 7.26, 4.51 is actually additional provision we're keeping. We are, we are keeping in the general provisioning bucket.
Speaker #2: Just to, just to build a stronger balance sheet, which ultimately when the year, is over, which is only, you know, two months, little more less than two months, I think, you know, all will make sense.
Speaker #2: We will post another good profit in this year too. with, I can only hope that, right now the slowdown in the economy, I think, you know, it soon should be over.
Speaker #2: It should be over. Business people, will again take, you know, large, facilities for BMRE and all the other expansions. In the meantime, City will keep on focusing managing on retail loan and cards and small business.
Speaker #2: And corporate bank and medium will keep on focusing on non-funded income exchange gain earning from trade, et cetera. So overall, if you ask me that, you know, I personally feel that, all is good.
Speaker #2: There are good competition going on in the market among three banks. And, good competition is always welcome. You see, this year also we would like to keep the crown, the feather that is in our hat as the top sustainable bank.
Speaker #2: We are trying our best. Our, you know, ECL is coming, expected credit loss. And that's the reason, you know, against the financial assets of the bank, we are, we are building provision.
Speaker #2: We are building provision, which I already, highlighted on. So focus is on digital. Focus right now, given this current trade, focus is on managing the investment portfolio.
Speaker #2: Of us, the risk that is there in, in, in especially in the, you know, held for trade book as which I have already told you that 4% of, you know, interest, rate if it goes up, still we are, we can absorb that shock.
Speaker #2: So that is very significant amount of cushion. So we have, I also must thank finance team of the bank for successfully, you know, managing to, to, to find investors for, 12 billion taka, tier two bond.
Speaker #2: We have been, we are oversubscribed. And, that has helped in pushing up the capital adequacy ratio to a very solid 16.4% right now. So this will be there because, as every year happens with Citibank, first nine month in Citibank is never a reflection of Citibank's total 12 months.
Speaker #2: I can firmly say this is not going to be an year of exception. We'll again do that, you know, you will be able to, you know, able to cheer us up, with our this kind of profit of this nine months as I already mentioned, you know, profit will show, very good growth by the year end.
Speaker #2: Well, I can say subsidy is also doing well. our, our, NPL percentage, there is a little bit of increase, but I will not repeat because Mahbub has already mentioned.
Speaker #2: And I think I also mentioned about the extra provision that we are keeping and, this is also balance sheet management part. And, also, the write off plans that we have.
Speaker #2: And recovery that we will achieve. Our, our special asset management team has already achieved their annual budget already. So overall, all good. this is where I will end.
Speaker #2: wish us luck on our digital journey, which is ongoing, which is ongoing, blink will be launched by the year end or the start of the next year.
Speaker #2: I think, you know, QR code is going to be a game changer and digital loan is going to be a game changer or retail bank is, I already said, you know, growing at a 70% loan book and deposit as Mahbub also mentioned, you know, they carry 66% of the bank's deposit and that is also growing at 22% rate.
Speaker #2: Overall, thank you so much for trusting on Citibank. Thank you so much for putting your trust and faith on Citibank. We all are very confident about achieving a phenomenally good, you know, year closing within the next two months time.
Speaker #2: Thank you so much. Thank you.
Speaker #1: Thank you, sir, for your insightful remarks and for sharing your perspective on the bank's strategic direction and the opportunities and challenges that lie ahead.
Speaker #1: Ladies and gentlemen, we will now proceed to our Q&A session. With the questions that we received through the Q&A portal. Let's begin with our first question.
Speaker #1: So the first question is with private sector credit growth at historic lows with specific sectors or subsectors are you targeting for safe credit expansion for the next 12 to 24 months?
Speaker #2: Bolid Mahbub.
Speaker #3: Okay. first, if you look at our, portfolio growth, you'll, you'll see that our port, our retail growth is, is very strong. So that will continue.
Speaker #3: And, and for that, actually, we have, taken the strategy a long time before. So now, is giving us the benefit by, having very strong retail distribution channel and, and other credit monitoring system.
Speaker #3: so and also the next, sector is, is the, micro and small, small segment. And where, also in last six months, actually, we have been observing very high credit growth also.
Speaker #3: Then this will continue. the thing is that the only, slow growth that we experience is the corporate segment. And whereas also we have, quite good, opportunity.
Speaker #3: Our head of wholesale banking can also give us more detail that how actually he will improve, the wholesale banking credit growth. Because, because of the, just, new government has actually taken, taken up their, position in few, just, just more than few months, six months.
Speaker #3: Less than one year. And, and just, also because of the two year interim government and the political changes, there is impact on the, corporate segment.
Speaker #3: But, there is also scope of, of, of high growth in corporate segment. So I'd like to actually on top of, of our retail and, SME sector, actually how actually.
Speaker #3: Our wholesale bank, wholesale banking and corporate segment will, will actually perform in coming there. I'd like to request Asif to add, a few words.
Speaker #4: Yeah, thank you. Thank you, Mr. Mahbub. Basically, as I said, the retail growth, will continue. Beside the corporate and the wholesale banking side, we have grown, well in, the RNG sectors and some other manufacturing sector, agri and agri products.
Speaker #4: that will continue. We see that government and the, and the agreements that we are showing with the some countries like, China, Japan, and other countries, there are a lot of infrastructure project is coming up.
Speaker #4: with, the port and the airport, the, the dams, the barrages, and the highways, expressways, all those projects are coming up, which will, have a positive impact on the manufac sorry, construction products like steel, cement, and other, other areas where the, the growth in these areas are very, very low for the last two years.
Speaker #4: I think this, these areas will be revamped. Besides the central bank has taken some scheme to, introduce the close factory. and the semi-close factory under some scheme that the Citibank is working on those.
Speaker #4: I think this will also give us momentum. so FDI is, likely to come and besides, the wholesale banking had a phenomenal growth in the import-export and the bank guarantee business.
Speaker #4: That will also continue, the growth. That area is 22, percent. If we consider up to October, it goes to 25%. So the, at, at as of September, the outstanding in trade volume as a out the in one side is volume, another side is out, outstanding is above 33, 2,000, 32,000 crore taka outstanding was there.
Speaker #4: Besides the, the asset, these non-funded is not shown in the asset, is off balance sheet and is a non-funded from. So this way we can compensate the low growth in other one areas and compensate in, in, in a different segments.
Speaker #4: Because Citibank has a very robust and very quality portfolio in the wholesale side. And in the future, we can, excel when the economy is likely to excel as well.
Speaker #4: Thank you.
Speaker #3: So yeah, just, just to add few words on top of Asif, because of the political situation, we have observed slowdown in infrastructure project. run by the government.
Speaker #3: So momentus, momentum has, has started and, ACNEC is approving last project. So you'll soon, soon see the impact of, this infrastructure development and Asif has said that for investors are coming, growth in RNG is still going on.
Speaker #3: You, you have seen that 6%, export growth has already happened in first three months of the new financial year. Okay. Thank you.
Speaker #4: Thank you.
Speaker #1: Thank you so much, Mahbub sir and Asif sir for your detailed explanation. I believe that would provide valuable clarity on the matter. the next question is, how are you leveraging digital banking infrastructure MFS partnerships agent banking to lower your physical carbon footprint and expand financial inclusion safely in rural areas?
Speaker #3: We are doing that, you know, by expanding our agent banking network, carefully and also by opening sub-branches. And as I said, that we have a QR code strategy, which ultimately will give us a lot of new accounts.
Speaker #3: We are fully, you know, getting ready, to, to, to launch the QR code program. And, in the rural areas, we already have certain presence, but ultimately when the Blink app is coming, you know, that will be focused there will be focusing on, on outside the metro areas, in order to capture the acquiring business.
Speaker #3: Through QR, through QR. So we have a full plan there. so far, you know, as a retail retail bank focus institution, meaning in the sense that, you know, on the deposit side, our whole aim is to actually get access to the mattress money to get the deposits under the mattress, which is outside the bank.
Speaker #3: So this kind of an ambition we have and that is already being translated in the retail deposit book growth of ours, where SME banking and small business, sorry, small business, now looks up to the agent banking, we give loans also, not only digitally, but small business units as well.
Speaker #3: So we are doing both sides of financial inclusion, deposit side and also lending side. Our responsibility is there always as an ethical banker for, you know, to, to help the economy grow in that, you know, area.
Speaker #3: So financial inclusion for Citibank is always a serious matter. Otherwise, we wouldn't have given 13.9 billion taka 13.9 billion US dollar equivalent taka as digital than a loan if we had not believed in financial inclusion.
Speaker #4: in this side on the carbon footprint, sir, may I add one thing? In the, in the trade side, we have also gone to digital.
Speaker #4: So huge volume of trade is now we are executing the transactions from end to end from client to our back office, all are doing digital.
Speaker #4: That also helping us, to, to be more digital, which also help us to. Smooth, smooth growth in trade. Thank you.
Speaker #3: I just add one point, one another point that through the digital lending, you know, that we already dispersed can you hear me?
Speaker #2: Yes.
Speaker #1: Yes.
Speaker #3: Yeah. Through the digital lending, we already dispersed the 130 billion. last year we calculate that the through the digital lending, we, already reduced the carbon emission almost 74,000 metric ton of the per year.
Speaker #3: That means there is a no need for the, physical, physical place no need for the, electricity. Then users reduce the paper work and also the is the operational expenses.
Speaker #3: That's the reduces, the it's the real impact on the carbon footprint expert by the digital lending.
Speaker #1: Thank you, sir, for the insights. moving on to the next question. how do you see Bangladesh banks policy rate and T-bill yields moving over the next 12 months?
Speaker #3: Mahbub.
Speaker #2: okay. first, there though actually there is a, inflationary pressure, and because it is happening because of the, actually, Middle East crisis and, increase of the fuel price.
Speaker #2: Fuel import price actually. So that's why actually countries still, cannot, managing the inflation successfully. But other other than that, at the same time, we are experiencing very low carried growth.
Speaker #2: So so considering this, cost push inflation and slow carried growth, we are not expecting any increase of, interest rate and and and if inflation we are not also expecting that inflation will actually shoot up further.
Speaker #2: there might be some minor, upward, trend in inflation if, the international fuel price, doesn't come down further. So if the situation is like, like situation is going on like this, so interest rate of policy interest rate will not increase.
Speaker #2: Rather, actually we are expecting to decrease it further in next, six month to nine month. So that's our projection. And, and also that's why also.
Speaker #2: In the interbank market, also the deposit market, we can see that the interest rate pressure is coming down. So that's why we we are successfully reducing cost of deposit every month.
Speaker #2: And we are getting deposit as per our target. Thank you.
Speaker #1: Thank you, sir, for your insights. we'll be moving on to the next question. what steps Citibank is taking to reduce the cost to income ratio below 40%?
Speaker #3: No, we are always on a growth mode. We do not necessarily want to reduce it below for 30%. We are a bank which believes in investment into people's development, investment into infrastructure, investment into technology.
Speaker #3: Now you know the AI wave is going on. We may need to invest further. So we do not look at any any particular percentage as the expected or the, you know, what you call it, our, favorite cost income ratio.
Speaker #3: No, we do not have anything like that. We we will keep on investing on people, technology, processes, and also our physical infrastructure which is needed for financial inclusion.
Speaker #3: And this QR code thing I mentioned, it doesn't come cheap. If you want to put, you know, half a million QR codes across the country, it is a huge cost involved.
Speaker #3: So our ATMs numbers have crossed 600 now. So there is cost. Cost is okay as long as income is solid as long as return on equity is solid as long as your profit shows growth as long as your credit quality of your book is not showing any kind of negative you know, bite.
Speaker #3: In the balance sheet. So that's how I look at not on the cost income ratio per se. Thank you.
Speaker #1: Thank you, sir, for this important perspective. And I'm sure it provides further insight into the bank's priorities. moving on to the next question. government securities have risen by 146 billion this year, and are now 32% of assets.
Speaker #1: Are you comfortable with such high percentage or do you want to reduce?
Speaker #2: That is actually yeah, it's it will actually there's a kind of natural movement, upward movement that happened because of the high liquidity, and low carried growth.
Speaker #2: And, and it will remain at this level and if you look at the, this investment position of other good banks, you'll see that similar kind of even or even higher, position in investment treasury position in treasury bill and bond.
Speaker #2: So our position is compared to industry is not that much high. So it's it's a moderate, position we consider it. And as actually interest rate is coming down, there is more prospect for credit growth.
Speaker #2: So naturally, it will not actually grow at this level.
Speaker #1: Thank you, sir, for the explanation. We have reached the end of today's earnings disclosure event. Thank you all for your participation and patience. Before concluding, let me let me inform you that the recorded version of this entire event will be made available in the same web link as for the live program very shortly.
Speaker #1: Those of you who missed the live event or want to skim through it at a later time, will find the whole event documented there.
Speaker #1: The financial presentation will also be made available in Citibank's website under the investor relations section. We appreciate your participation and patience. Thank you again for your interest in Citibank PLC.
