SIBL to open 14 more branches this yr
Mehdi Musharraf Bhuiyan
Social Investment Bank Limited (SIBL), a private Islamic bank has embarked on its second consecutive year of massive expansion as the second generation private commercial bank is set to open 14 more branches countrywide in 2009.
In addition, the bank is also looking to set up five more SME Centers all around the country during the same time frame, the bank authority informed.
“We have obtained approval for the opening of 14 new branches along with five more SME centers earlier at the beginning of this year and hoping to complete this expansion by the end of 2009,” Abu Sadek Md. Sohel, Additional Managing Director of SIBL told The FE recently.
This sounds rather an ambitious turnaround for the Islamic bank after it was listed as a problem bank in October 2005 against the backdrop of signing Memorandum of Undertaking (MOU) with Bangladesh Bank and its subsequent failure to make good the adjusted capital shortfall, provisional shortfall as well as downsizing the higher percentage of classified investment.
Since then however, it has bounced back significantly by adopting various strategic planning while obtaining approval for issuance of 1:1 rights share offer from Securities and Exchange Commission (SEC) in the mid-2007.
Consequently, the Bank came out of the problem bank list by the end of that year and the succeeding annum of 2008 saw the opening of 4 new branches along with 5 SME centers following three consecutive years of stagnation when no expansion took place.
The upcoming expansion would increase the Bank’s number of branches by one and half times to 42. Currently, it works through 28 branches countrywide, 18 of which is situated in Dhaka metropolis.
“This expansion would begin with the opening of our 29th branch at Mohammadpur in the city by the turn of the next month (May), followed by another addition at the Lohagora of Chittagong at around the same time,” Abu Sadek said.
“Initially, we are opting to establish five to six branches by the end of this June and hopefully all the 14 branches would be operational by September,” Abu Sadek said, adding, “while the five SME centers would take time till November to kick off”.
“Eight of these 14 branches would be situated in the rural areas while three of them would be set up in district towns,” Sadek said. “Out of the remaining three, two of them will be based in Dhaka metropolis and one at the port city of Chittagong,” he added.
“Dhaka, Chittagong, Cox’Bazar, Comilla, Chandpur, Narayanganj and Sattkhira are the districts where these 14 branches will be situated,” he informed.
“However, no decision has been made yet about the possible location of the five new SME centers,” he added.
The expansion came against the backdrop of reviving year for SIBL in 2008 when the bank downsized its Classified Investment to 4.38 percent compared to 4.93 percent in 2007.
The bank made an operating profit of Tk.787.4 million in 2008, a whopping rise of 63.77 percent from the previous year.
Meanwhile, deposit of the bank, listed in the country’s bourses since 2000 grew by 22.65 percent and stood at Tk. 2409.98 million. Investment increased similarly at a rate of 21.35 percent from the previous year to Tk. 19951.30 million.
Paid up capital of SIBL in 2008 rose to Tk 1.30 billion from Tk 1.119 billion in 2007.