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Yes.
Okay, thank you. Ladies and gentlemen, good evening and welcome to BRAC Bank's 2023 Earnings Disclosure Program, which is also going to be a discussion about the first quarter of 2024. Let me take you quickly through those initial statements. This is a live webcast in our earnings disclosure portal. This link has been shared with all relevant stakeholders through press advertisement, website posts, and also on social media. We are also live with this presentation on our Facebook page. Next we come to the usual forward-looking statements. I don't think I need to get into that. We've done this before. Let's look quickly at our contents, and we'll have an update on the economic outlook and the market update as well. We'll have a quick recap of important highlights for 2023, and then get into also the business highlights of the first quarter.
We'll, as usual, do it through three different lenses: SME, corporate, retail, and of course Treasury as well. Have a quick update from our Chief Risk Officer, and also, a little bit of a discussion on our if we have time around our branch network and alternate banking channels. Again, people initiatives, technology initiatives, sustainable finance—all this is if we have time, but the entire presentation will be uploaded, so you're welcome to go through it at your own sweet time as well. Dev, shall we move to the next slide? And we'll have an update from our Treasurer, Shaheen Iqbal, Deputy Managing Director and Head of Treasury and Financial Institutions, on the market and the overall economic update as well. Shaheen Iqbal.
Thank you, Selim Bhai. Good evening, everyone. I think, as you all know, Bangladesh economy is going through a challenging period. So after significant depreciation of local currency, we are seeing elevated level of inflation. To contain that inflation, we have to go through a restrictive monetary policy, for which we have to sacrifice some growth. So the economy is going through a slower growth period, which we expect gradually to recover in 2025 and beyond. And I think the world growth in general, positive world growth expectation, is, oh, will also support our recovery in a better growth trajectory. Next slide, please. So on the FX side, we have seen, there is significant improvement on trade balance and current account balance, which has been nullified by the negative growth in financial account.
Our reserve is still depleting, but we expect with the adjustment in exchange rate, the situation gradually will improve, and we think by the end of this year, probably we'll be moving to a positive growth trajectory as well in terms of reserve. So overall, situation is gradually improving, and we expect better recovery in 2024. That's a small brief from my side. Thank you.
Thanks very much, Shaheen. Let's look at some highlights of 2023. Digital customer numbers have been growing strongly, both in the full year January to December 2023, and that momentum has continued into the first quarter of 2024 as well. Customer numbers have grown almost 30% since year 2023. Roughly 2,000 new customers are being onboarded every day. That, I think, is an enormous positive for BRAC Bank. Overall, deposit growth is again very strong. Deposits are growing more than 3 times that of the average of the market. And, as we'll show you later on as well, the market share has increased in terms of deposits to 3.11%. Customer loans grew more than double that of market in 2023, although 2024 growth is relatively muted. We'll talk about that later as well. Overall, financial performance strong.
Very well-managed foreign exchange flows during an extremely difficult time, and that has helped in us growing trade finance very strongly, obviously in the corporate commercial business, but also in the larger SME business as well. Overall throughput of $4.4 billion in 2023 and a very good $1.3 billion already in the first quarter of 2024. Overall, net interest income and the fee base has grown so very, very well. Portfolios have been managed very, very well. Overall, portfolio quality has improved. We will show more of this when our Chief Risk Officer, Ahmed Rashid Joy, gives you an update. Capital is strong at over 14%, and international credit ratings from S&P, Moody's, and the local credit rating from CRAB, a very well-recognized local rating agency, are all very, very strong. The international ratings for BRAC Bank are easily the strongest in the market.
If you look at market share, a very important reflection of 2023 and also includes 2024, you'll see how that has continued to grow. Customer loans have grown to 3.33%, and that compares to 2.91% in 2022. Customer deposits have also grown from 2.58% - 3.11%. So our market share growth strategy that we launched in end 2021 is working out very well. We're quite happy with that, although it seems to have plateaued slightly in the first quarter of 2024. Our expectation is that by the full year, we will again grow by another 30-40 bps in this important area. Next slide. A quick look at what we call the Wheel of Astha. Astha is, means trust in Bangla, and is actually the name of our, retail banking, app. So the Wheel of Astha shows some important indicators. 25% increase in customer, numbers. Deposits have grown 34%.
Customer loans 26%. Yields have improved slightly, about 60 basis points, on customer lending. Customer deposits have gone down by 70 basis points. Overall spread is pretty much in line with 2022 as well. Revenue total revenue 19% growth. Positive jaws of 4.5% and a small improvement in cost-income ratio as well. Credit cost, we've taken a little bit of a buffer over 2022, but NPL overall has gone down from 3.7%-3.4%. Overall, I think a pretty positive result. Thank you, Dev. Next slide, please. Dev, next. Oh, sorry. Here it is. So the first quarter, sorry, let's look at the first quarter of 2024. This is again, comparing to the first quarter of 2023, and another significant improvement year-over-year. 25% growth in customer numbers. 35% growth in deposit numbers. 22% growth in customer lending.
Customer yields, a big positive, almost 1%, and a drop in both customer, sorry, cost of deposits and overall spreads, because the customer deposits, interest rates on customer deposits have grown faster than they have on customer lending. Strong growth in revenue, mainly pushed by what we call non-interest fees and investment income. Total expenses have grown over last year. Despite that, the jaws of 35% is, is very, very satisfactory indeed. And you can see the cost-income ratio for the first time ever has dropped well below 50%. At 46%, this is an all-time best that we have. We've taken, again, a little bit of a buffer in terms of credit cost, but NPL is 50 basis points better than where it was same time last year. Overall, very strong first quarter results.
And from what figures we've seen in the media, significantly superior to that of any other financial institution in the country. I'm talking about the local financial institutions. We are not comparing our results with any of the foreign banks, which is a slightly different market. Thanks very much, Dev. Let's move into the business segments. We have SME next, and Deputy Managing Director and Head of SME, Mr. Tomal, will now give us an update on this very important part of our bank.
Thank you, Selim Bhai. Good evening, everyone. I'm delighted to share the remarkable achievements of BRAC Bank's team SME, in the year 2023. Our customer base experienced a remarkable growth of 22% in 2023. The significant increase in customer numbers speaks about the volume and the trust and confidence that there are entrepreneurs placed in our services. Furthermore, our asset growth momentum continued to soar in the year 2023, reaching an impressive 27% growth full year. The robust growth underscores our ability to capitalize on the emerging opportunities in the market. One of the most notable achievements of 2023 is the transformation of our division from a mere lender to a comprehensive banking partner for SMEs. For the first time in our history, SME deposit growth percentage surpassed our asset growth percentage. SME deposits grew by 39%.
This milestone is a testament to our success in building trust and credibility among our SME clientele, and it underscores our commitment to offering comprehensive banking solutions tailored to the need of the unique customer segment. Most importantly, our portfolio quality has also improved significantly, reflecting our unwavering commitment to prudent risk management practices. The 30-day overdue percentage reduced by 1%. It became in December 2.9% from 3.9%. NPLs decreased again by another 1%. It came down to 2.7% from 3.7%. These improvements are also a testament to our proactive approach to risk management and our relentless focus on maintaining a healthy and sustainable portfolio. In line with our commitment to innovation and digital transformation, our journey continued in 2023. We have successfully rolled out our loan origination system across the country, leading to a remarkable increase in per-staff productivity by 1.42 files.
Additionally, our efforts to bring our SME customers into the digital ecosystem have started producing results. More and more customers and our customers, meaning SME customers, have started using our banking app, Astha. The monthly transaction volume in our Astha app has crossed BDT 10,000 crore per month, and you'll be happy to know that SME customers contribute to more than 60% of this transaction volume. This significant milestone highlights our success in leveraging technology to enhance our customer experience and drive operational efficiency. In conclusion, we have reached remarkable success, but our journey is far from over. As we look ahead, let us remain committed to excellence, innovation, and sustainable growth. So this is the highlight of SME business for the year 2023. Now I will move to the SME business highlights in quarter one 2023.
The performance of SME banking in quarter one 2023 continues like the full year 2024 in the face of a challenging economic condition. Our division has not only preserved but thrived, achieving remarkable results, with the commitment to excellence and resilience. Our customer base experienced a 22% growth in the first quarter also, and our assets have also grown by an impressive 20% despite various challenges that we have faced during quarter one. This sustained growth trajectory underscores our ability to capitalize on emerging opportunities in the market and drive sustainable value for our stakeholders. One of the most notable achievements in quarter one also is the SME deposit growth. This growth was even more than the first quarter. We experienced a 47% growth in SME deposits. Moreover, I'm pleased to report that the portfolio quality among these difficult times has also been a downward trend.
The 30-day overdue percentage reduced from 3.58% year-on-year to 2.2%-2.8%, while NPLs decreased from 2.96% - 2.11%. These improvements, as I said before, is a testament to the proactive risk management approach that we apply in assessing our SME customers. Also, our trade volumes in Q1 grew by 23%. This robust trade growth in trade volume demonstrates our ability to capitalize on our opportunities in this difficult market and commitment to facilitating trade and commerce to our valued client segment. In conclusion, I would like to say that we have achieved remarkable success in the first quarter of 2024, and I'm very confident that this will continue, and we will continue to thrive in the quarters ahead. Thank you very much. Over to you, Selim Bhai.
Thanks, Tomal. Let's have a quick look at our corporate banking division. I would request Tareq Refat Ullah Khan, Deputy Managing Director and Head of Corporate Banking, to update us.
Thank you, Selim Bhai. Good evening, ladies and gentlemen. I'm pleased to share the outstanding achievements of the corporate banking division of BRAC Bank for 2023. This past year, we have not only met but exceeded the benchmarks of our success within our industry thanks to our dedication and innovative strategies. Our division excelled in managing liquidity in both local and foreign currencies, merging our wealth of resources with unmatched expertise. We have introduced a selection of tailored products and digital solutions, all designed to meet the evolving needs of our customers. These initiatives have drawn top-tier clients from various industries, establishing us as their go-to bank for corporate banking services.
If you look into the in terms of deposit, our dynamic transactional banking services and extensive networks have significantly boosted our deposit by 35% from last year, thanks to our focused engagement in key market segments and competitive product offerings. In terms of loans and advance, we have achieved a remarkable 37% year-on-year growth, reflecting our strong risk management and commitment to supporting our major industry players in tough market environments. Our ability to integrate our offshore banking capabilities and excellent relationship management has brought 74 leading industry accounts into our fold. If you go to our portfolio management side, we have made great steps in defining our portfolio management, enhancing credit standards and operational oversights. Our strategic focus on reducing risk has lowered our portfolio at risk by 42 basis points and cut the year-on-year non-performing loans by 27 basis points.
We are confident in our ability to further improve these matches metrics in the coming years. In terms of trade, our robust handling of foreign currencies, liquidity, and enhanced trade capabilities have allowed us to support both longstanding and new customers. This year I mean, the last year, we outpaced our competitors in trade growth, and we are aiming to reach at the $5 billion mark in 2024. In the digital banking side, our ongoing innovation and customer digital services have successfully attracted over 1,000 new clients, with transactions surpassing BDT 130,000 crore in 2023, making a 52% increase from last year. Our digital platform continues to retain a solid base of regular users. Can you go to the next slide, please, Dev? So you can see in the next slide that all indicators are positive, excepting CASA mix and COD.
It is in line with the market practice, actually. So looking ahead, we are committed to maintain this growth in loans, deposit, and trade, aiming to strengthen our standing as a substantial and reliable banking partner in the industry. The results from the first quarter of 2024 already indicate that we are on track to achieve our goals. Thank you for your continued trust and partnership as we move forward together. Thank you. Selim Bhai, over to you.
Tareq, let's look at retail banking, and we will be updated by Mahiul Islam. Mahiul is Deputy Managing Director and Head of Retail Banking. Mahiul, over to you.
Thank you, Selim Bhai. I'm pleased to share the updates on our retail banking. In full year 2023, we continued our growth momentum, particularly in customer acquisition and deposits. I will cover the key areas. Our total customer number has grew by 27% year-on-year to 1.2 million mark, with more than 260,000 net inclusion. Our customer deposits portfolio also grew by 24% at the same almost at the same pace. However, due to the ongoing rise in interest rate, our customers were more inclined towards fixed deposits, which reduced our CASA to 40%, and the cost of deposit also increased to 4.2%. We continued our focus on digitalization, thereby making 80% of our eligible accounts fully open digitally, and the mobile app Astha users crossed 500,000 in 2023.
As Tomal covered, the Astha transaction volume side where SME contributes to more than 60%, resulting in the BDT 10,000 crore mark, while the retail contributes more than 60% on the total number of transactions. So that's, again, a big milestone that we have done. We, in terms of digitalization, also disbursed 8,500 digital loans with a portfolio of BDT 70 crore last year. As a result of rising inflation, we were selective on lending in specific customer segments such as employee banking, government sector, and so our customer portfolio assets portfolio was limited to 9% year-on-year growth, while our credit cards book grew consistently at 19%, and the overall asset yield improved to 8.6%.
Despite our continued strong efforts in portfolio monitoring and collection, customers struggled, particularly last year due to macroeconomic stress that resulted in PAR increase by 40 basis points to 4.8% and NPL increase by 30 basis points to 2.9%. Compared to the industry, our retail assets portfolio remained in a much better position. In terms of merchant acquiring business, we had a strong 34% year-over-year growth touching BDT 72 billion mark, and we extended our collaborations with bKash by rolling out add money and pass-through transaction features using Visa Secure platform CyberSource. Finally, as a result of our sustainable relationships with exchange houses and continued digitalization efforts, our wage and revenue business had outstanding growth of 131% year-over-year and reached the $819 million volume. That's all from the full year 2023 side. Now, Dev, if you can move on to the next slide.
So as you see that from the year-on-year highlights, the CASA mix and COD continue to remain a challenge, while the other KPIs have shown sustainable growth, starting from customer deposits, which again continued a sustainable growth of 25% year-on-year, based on the assets where we had we all also remained cautious and selective on lending. Thereby, the asset growths were similar remained at a similar level year-on-year at 8%, and the cards book grew by 20 by 15%. We expect we have taken some measures to re-regain our asset momentum, and we expect our assets disbursement to pick up in the second quarter of this year. We still we continue to face challenges in portfolio monitoring where the PAR increased to 5.5%, but due to the strong collection and recovery efforts, our NPL reduced by 11 basis points to 2.6%.
Overall, we had maintained the growth momentum, and we believe that 2024 would be another big year for retail banking. Thank you. That's all from my side. Selim Bhai.
Thanks very much, Mahiul. Let's get an update from our Treasury, our Deputy Managing Director and Head of Treasury and Financial Institutions, Shaheen Iqbal.
Thank you, Selim Bhai, again. I think in 2023, we built a liquidity buffer and capitalized on investment in government securities. We managed through efficiently, optimizing the duration of government securities, and thereby we made sure that we have sufficient return from the securities portfolio. We also optimized that through the use of derivatives, so that we can optimize return. In 2023 as well, like, we managed FX very efficiently. Our overall FX management was proper so that we can support our business growth. In this process, we grew our trade finance portfolio by 22%. We arranged long-term funding by BDT 200+ million from various sources. So overall, FX management was pretty efficient, and we could support Bank's business growth as well. On the risk management side, like, BRAC Bank efficiently managed risk through the risky.
At the same time, it ensured that it had better risk-adjusted return. By doing this, I think, we were in a better position in terms of managing risk, in a difficult market situation. Overall, like, if we see, like, from liquidity, FX management, and risk management, the 2023 and quarter one 2024 was a pretty successful period for BRAC Bank. Thank you very much.
Thanks, Shaheen Iqbal. Indeed, a very stressful 2023 in terms of foreign exchange. I think, BRAC Bank has been able to come out of that, with very, very strong results, and much of that is based on our strong foreign exchange and Taka liquidity. Thanks again, Shaheen. Let's get an update from our Chief Risk Officer, Deputy Managing Director, Ahmed Rashid Joy. He will talk about our portfolio quality. Joy.
Thank you, Selim Bhai. Good evening, everyone. Certainly, the growth that we are all talking about is exemplary in the industry, especially during the tight situations that we witnessed in the last year. And despite all of that, we could maintain our asset quality thanks to our improved and structured approaches in credit risk, I would say. You can see on this slide that our non-performing loans in 2023 decreased by 30 basis points from 3.7% - 3.4%, with a reduction of portfolio at risk PAR, which is on a 30-day past-due basis, from 4.9% - 4.3% if compared with the last year. In the same way, our first quarter NPL in 2024 improved to 3.3%, while the PAR also improved to 4.2%.
What we want to highlight is, in 2023, our portfolio increased by more than BDT 10,000 crore in a single year alone, whereas our PAR amount increased by mere BDT 250 crore and NPL amount increased by around BDT 230 crore. Whereas, as you all know, in 2023, what we experienced was turmoil like the foreign exchange crisis, higher inflation, higher interest rates, and, you know, falling reserves. But despite all this, we could maintain our portfolio quality. And also note that since 2017, that is, in the last six years, our portfolio grew by 2.5 times, and whereas you can see our NPL ratio is hovering around 4%. So our asset quality has been very much consistent across the year in the last seven years. Next slide. As of December 2, 2023, our credit coverage stands at 115%, which we maintained historically, you know, other than 2020.
During the year, we provided BDT 301 crore as provisions, which resulted in a cost of credit of 58 basis points. In Q1 2024, credit coverage increased to 117%, while the cost of the credit also increased by 80 basis points. Essentially, we remained conservative and kept some additional buffer in Q1, as Selim Bhai already mentioned to you. Next slide. We have some highlights that on the portfolio that you can see, 96.7% of our portfolio is under regular repayment terms, while 3.3% is in NPL, as you all know. Within the regular repayment portfolio, only 0.54% is rescheduled, which is the conventional rescheduled, while the COVID-19 restructured portfolio is 2.9%. So if we add this total, these two, the total restructuring stands at 3.46%. But most of this portfolio, even the restructured portfolio, is also performing, as reflected in our 30 DPD par ratio, which is only 4.2%.
So you will understand how performing even the restructured portfolio is also performing. Ladies and gentlemen, in last year, we started developing some econometric models with the guidance of our independent director, Dr. Zahid Hussain, as you all know, who was the former lead economist of World Bank. So what we tried to do is to find out correlations of our bank's NPL with macroeconomic variables like interest rate, exchange rates, export-import, and FX reserves. And based on such models, what we are trying to do is build our capacity to forecast our NPL in these difficult times, you know, when we are having these difficult times with regards to macroeconomic variables. And all these models are currently under development, and we are continuously working on them.
Apart from this, we have also developed some models like we are working on the RAROC for the corporate clients, the credit bureau scorecards, the behavioral scorecards for SME and retail, and early warning signals for the retail loans. With all these risk models in operations, we will be more confident in managing our risk and predicting credit loss more sophisticately, I believe. That's all from me, Selim Bhai. Thank you once again.
Thanks very much, Joy. Let's move into the financial updates, and we will start off by giving you a sense of how the balance sheet has grown in terms of customer deposits and customer loans over the last three or four years. Next slide, please. You can see on the left side in purple, we have the full bank, then green is SME, blue is retail, and corporate is golden. You can see how the bank has grown 30% year-on-year, and it has grown continuously over the last four years as well, last three years, 2021 and 2022. Same for all three businesses, particularly strong growth in the corporate banking over the last year. But I'd also like to mention that the SME business, as our head of SME mentioned, is now really starting to take shape, very good traction.
The first quarter—we'll talk about that a little later—has, again, shown great momentum in SME. The next slide is the first quarter of 2024, similar to the earlier slide, consistent growth across all segments, particularly significant in SME where this quarter has been 47% higher than the last quarter the same time last year. Also for the corporate banking business where the transaction banking business is really paying dividends now, again, strong 40% growth over last year. Retail continues to grow strongly. It, of course, represents more than 50% of total customer deposits. Next, please. A sense of how the three businesses contribute to customer deposits. Today, end of 2023, 19% was SME. That's a significant improvement, also going forward, 30% plus from corporate, 48% from retail.
So a good spread that helps us diversify our business, cross-sell from one segment to another, and gives the overall portfolio a lot of stability. Next slide. We're looking at the first quarter mix, pretty similar to the full year as well. Again, 47% retail, 30%+, corporate, 20% in SME. Next slide. The CASA mix has come down from 2021, which is pretty natural in the sense that interest rates have grown significantly over 2022 and 2023, and it just doesn't make sense to hold surplus funds in a CASA account today when the interest differential can be as high as 7%-8%. So we're seeing lower CASA composition. But this is a key driver for us going forward, and our attempt will be to end 2024 with something closer to 50%. Next slide.
You can see it's come down further from 47% end of last year to 46%. But as I said, the expectation is that the raft of different initiatives that we've just put in place will give us value over the next three quarters, and we will be able to inch closer to the 50% mark. Next slide. Customer lending. So 26% growth year-on-year. And you can see the three businesses, SME and corporate, growing strongly; retail, much more subdued, very much a function of high inflation rates and also representing our more conservative risk management or risk appetite. We've very naturally had to be very careful in this area. Look at 2024, first quarter. And good growth over last year, but slightly subdued again in SME and retail as well, strong growth in corporate, again very much aligned to our risk appetite.
But we can see signs that high inflation rates are now discouraging customers from borrowing money, both in the businesses and also in consumer finance. Next slide. This is a composition of the lending mix. You can see 45% SME, 39% is corporate, 16% retail. Roughly 5% of the corporate book is actually managed by SME. That's mainly what we call microfinance institutions. But we are showing it as part of corporate, because that's the way the central bank requires the reporting. But that business is managed by SME. Next slide, please. You look at the first quarter, not very different from end of last year as well. But again, as you can see, our book, both the customer deposits and customer lending, is very well diversified. And the customer deposit book is just an is the opposite of customer lending.
So you see strong customer deposits are mainly from retail, 45%, 50%, yet customer lending is mainly from SME. It is, one of the reasons why BRAC Bank has such a stable, revenue growth, is because of this platform, this model. I would dare say that no other bank in this country is as diversified as BRAC Bank is in terms of, corporate, SME, and retail banking businesses. Thank you, Dev. Next slide. I will now ask our Chief Financial Officer and Deputy Managing Director, Masud Rana, to take us through the, P&L and balance sheet. Masud, over to you.
Thank you, Selim Bhai. Good evening and assalamualaikum to everyone. 2023 has been a great year for the bank, followed by a very strong Q1. As you have heard from my colleagues, all across, all the business divisions, support divisions, everybody contributed. I think we must, thank you to our 10,000, 11,000 colleagues who have actually made it possible. I think of this success, the main reason is our unity, the way we work. It's a collaborative approach, and it actually really worked pretty well. Looking at looking back to 2023, it was extremely challenging, as Selim Bhai was mentioning. But at the same time, there were also opportunities. If we look at the, you know, in general, the banking sector, good banks actually reported a pretty good performance. But I think better bank, actually, does well. But at the same time, BRAC Bank, relatively, did much, much better. Why?
I would like to start with the growth strategy that we have undertaken. Last two years, our balance sheet has grown by about 62%. So that extra volume, both in terms of loans and the deposits, helped us to, you know, cash in. I think we have been very, successful in reading the market pretty early and taking that position. And we have benefited out of it. Since last July 2023, we have got into the SMART regime, and all our, new acquisitions have been priced, I would say, comparatively better, appropriately, or risk, you know, risk-priced. It also, you know, included the supervision fee because, about 61% of our book is, granular, SME and, retail, which, did have this, supervision fee. But, please note, we did manage our, you know, operation within the pretty stable, net interest margin.
We have, you know, maintained an AD Ratio of sub-80s during 2023, which has actually helped to being very liquid, both in terms of local and foreign currency, which has actually helped us to support our customers, and in particular in the foreign currency space. And also, we have seen a big growth in our new clientele in the corporate side. I think, our technology investment has started paying off, which I'll talk about it. The efficiency is evident. It's paying off clearly. While our cost-to-income ratio has been pretty high, but I must say we have been continuing and investing in our people, our infrastructure, and also in technology. And finally, the most importantly, as our CRO said, our book quality has significantly improved.
If we had not had that, you know, that legacy book of the last four years acquiring or origination, the NPL is around 2% only, or I think it's if not less. So I think many of the things already been discussed. I'll just quickly highlight. Our revenue has grown in the full year 19% year-on-year. We have 27% growth in our profit after tax. I think it's a function of our growth in our revenue, better cost management, better NII while we have buffered a bit. Our balance sheet grew by about 29%. It has reached about BDT 27,072,000. ROE improved from 10.2% to almost 12%. Return on asset now is 1.13% by the year-end 2023. EPS per share earning has gone up by almost 1 BDT. We maintained very high 115% coverage. Our cost-to-income ratio has, you know, gone down by about 2%.
We maintained a very strong, despite, you know, growing our balance sheet at the rate of around 26%-27%. It's still 14%. Our NAV is now 39%. As I said, we have maintained a 4% margin, pretty much similar to what we reported in 2022. If we look at Q1 next slide, please. The growth journey continues, except for the loan side, which is, yes, of course, the market was, you know, it's a function of the overall market and all. So in the loan side, annualized 4% growth. I think we will definitely see a traction in the coming quarters. Our revenue from, you know, it has grown by about 47% year-on-year. I'll come to the, you know, detail. We have reported a PAT on a solo basis of BDT 272, which is around 101% more than last year.
Balance sheet has grown in the first quarter about by 5,000 crore, and regulatory capital accordingly. While reported ROE is 16%, but on underlying basis, it is slightly above 14%. ROA reported is 1.45%. On underlying basis, it would be around 1.25%. EPS, by the way, it's not restated because our stock record date is a bit later, when we published this data. It's comparable to the last year. So on that base, it's BDT 169 per share. We maintained very high NPL coverage. And during the Q1, we have actually buffered much more than about 80 basis points credit cost. The most significant one is 46% cost-to-income ratio. However, because of the, you know, our promotion and other expense cycle, it on an underlying basis, we are looking at about around 50%.
We hope by the year end, we can share with you a very strong CIR by the year end. Our capital adequacy also improved because of the, you know, first quarter numbers, bottom line. Our NAV also improved to 41, 3.93%, a bit, you know, subdued spread because, you know, interest cost has moved. Okay, if we if we look at the consolidated piece, I think more or less similar story. When I will, you know, detail about our subsidiary share of this consolidated performance, I think I I would like to touch upon the, you know, overall group performance of BDT 828 profit after tax, mainly contributed by bKash. bKash, bKash did report about BDT 70-75 crore PAT last year. So overall, I think, we had a very great year in 2023.
But if we look at quarter one, more or less similar, like, what has been the solo side, a bit, we have to take into consideration the ROE. The underlying basis would be roughly 14%, and the ROA would be on a consolidated group basis would be around 118%. I think we are on the right track. The cost-to-income ratio, capital adequacy, everything looks pretty well. But yes, we are moving into a different, you know, rate regime and, etc. So, we have to be careful. But we believe, and I'm quite confident that these most of will hold. If we look at the next slide, please. Balance sheet, in terms of proportion of the balance sheet, it remained as is, with the continuing growth, as I said, 62% over last two years. And from last year, it's 29%.
If we look at the quarter one next slide. It's about 7% from the last December, while year-on-year, it's 34%. I mean, if we look at one thing it's actually highlighted is that we have launched a subordinated bond, and the subscription is going on. We have already onboarded about BDT 85 crore, and with the timeline, we believe we will be able to onboard the rest of the amount. And it will help our applicable capital adequacy to even further stronger. If we go to the next slide, please. Overall, the numbers say so, and it actually continues. Let's go to the subsidiary shares. I think I'd like to highlight that. I'll come back to the P&L. If we look at, I mean, of this, you know, on the overall basis, we have got four subsidiaries.
bKash has contributed BDT 107 crore in the full year, while our two capital subsidiaries contributed about 3 crores. Our exchange house, which was actually restarted its business from last year, January actually reported a loss, understandably, after you know closure, it has opened. If we look at quarter one, all the subsidiaries actually suffered. The capital market subsidiary, it's predominantly from the mark-to-market losses during the you know from February and March, but particularly. I think the stock or the holding that we have should be reversed by the year end. Most importantly, bKash has reported good bottom line, which has helped to report us about BDT 318 crore consolidated profit.
I think, fundamentally, you know, our income in terms of overall NIM, which is a bit soft, but we have compensated by through our, you know, early positioning in our investment book, which is actually is much more than what we, you know, overall, if we include that investment income to that, it's much about 4%. Although at the same time, from the, you know, the growth, all our lending fees and also contributed commission fee, plus the trade fees. And since our FX flow has been very good, we also benefited out of that. I think we'd like to hear from bKash CFO. Moin Bhai, are you there? So I'd like to. Thank you.
Yeah, Masud Bhai, thank you. Thank you. Good evening, everyone. I will, like Masud Bhai, I'll also just try and quickly give you a performance update on bKash for 2023 and also for the first quarter of this year. So I'll begin with 2023 on the left-hand side. So we finished the year with 74.1 million customers, which was up by 8.8 million customers over prior year. In terms of active customers, we were at 39.3, which translates to an active customer ratio of about 53%. In terms of market share, we finished off with 64.7%. Merchants, we finished with 793,600 merchants that accepted bKash as payment.
I've always mentioned to you in previous occasions that merchant payment was one of the is continues to be one of the key focus areas for bKash because this is where the future of the wallet lies. So, if you compare this with the end of 2022, the same number was around 506. So we acquired about sorry, the same number was 287, and we acquired about 506,000 merchants over the course of 2023. This has been the highest ever acquisition for us, in terms of merchant payments outlets. Coming to average monthly transactions volume, BDT 723.6 billion translates to a daily average of about BDT 2 billion 1.98 billion, on a daily basis. This was up by 22% over last year. In terms of agents, we finished the year with 364,000 agents being enrolled in the bKash platform.
This was up by 23,000 more agents compared to same time last year. And as I mentioned to you before, this number, although you can find a bKash agent in every village in Bangladesh, but there's a gradual increase of 20-21,000 agents being added to the network every year. Moving on to the performance in the first quarter of 2024. So 75.2 million customers, we added 1.1 million customers more in the first three months of 2024. Of the 75.2, 40.4 which translates to about 53% were active clients. Market share, we had a loss of market share, and we finished, this is the numbers as at January 62.7%. There were certain government disbursement that was done, which bKash was not involved. So that's why the market share went down. In terms of merchants, 855,000.
So you can see a further increase from 793,000 in December to 855,000. We added about 62,000 merchants in the first three months of the year. So merchants continue to be a big focus area for us. In terms of average monthly transaction volumes, 841.5. That translates to BDT 2.3 billion worth of transactions being done every day on the platform. Agents slightly went up from 364 in December 2023 to 378.9 in March 2024. So that was the summary of the key health parameters of bKash. If I could start off with the financials. So in terms of financials, just give you a brief summary. So bKash started to make a profit in 2014 and 2015. And then 2014 to 2018, we started to make profit. And then, sorry, 2014 to 2017, we started to make a profit.
Then 2018 to 2021, we poured a lot of investments into technology, into our apps, so on and so forth. And hence, we were not making profits. However, from 2022 onwards, we went into the positive territory. And we've been increasing our bottom line ever since 2022. In terms of if you look at the top line, we've been growing steadily at about 20%-22%. And we've always over the past five, six years, we've been in the early 20% growth areas. So I'll just dwell on the performance 2023. Gross revenue grew by 22%. And so this growth, this revenue is in line with the volumes growth. And this gross revenue of 22% is being primarily driven by three factors. One is the increase in cash out, which increased by 18% year-on-year.
Our peer-to-peer transfer has also increased by 17%. The other component of revenue increase is the interest on trust settlement account. That increase because of our interest rates increasing. The interest bKash invests about 80% of our customer balance in government bills and bonds. And the yield, as we all know, was high at the back end of 2023. So we took advantage of that. Moving on to the net revenue, an increase of 24%. Cost of services really means the commission that we pay to our agents and our distributors. And if you notice that our revenue increased by 22%, our net revenue increased by 22%. However, our cost of services increased by 18%. So, while we progress ahead with our volumes increase, we're also trying to optimize our costs.
and we're trying to focus more on the more value-adding services like merchant payments, so on and so forth. And as a result, our cost of services increase is lower than our net revenue increase, which is really one of the biggest drivers of our increases in profitability. Gross profit, as a result, increased by 34%. Operating and administering expenses, this is really the drivers of increase is three. To be the big drivers are three. One is our headcount increased. So over the course of 2023, our headcount addition was 120. That's one factor. Depreciation increased. This is the impact of investments in all the capital expenditures and technology that we have done. And the other big increase was the increase due to the exchange loss. We this is the cost of importing software and hardware.
So those are three big reasons why our expenses increased. That led to an operating profit of BDT 31 crore, which is up by 140% over last year. Net finance income is the interest earnings from our own capital. That increased by 34%. This is, again, at the backdrop of interest income interest rates increasing both in fixed deposits and in government securities. That leads us to a profit before Workers' Profit Participation Fund. And this profit before tax is BDT 183 crore. Income tax obviously increased for two reasons. One is at the backdrop of higher income. And the other one is we've incorporated the effect of the Finance Act 2023. As a result, our profit after tax is BDT 104 crore, up from BDT 17 crore at the same time last year. If you can move to the next slide. Okay, so. Quarter one performance.
Again, quarter one performance same compared to the same time last year, we grew by 24%. So as I mentioned to you before, we're continuously growing. Our top lines are growing at the rate of early 20s. This time is 24%. And our cost of services increased by 15%. And we made another few optimization initiatives at the distributor and agent level, which resulted in a cost of services increase of only 15% at the backdrop of a net revenue increase of 24%, thus resulting in a gross profit increase of 46%. Our operating expenses increased. We've had the Eid festival this year, which there was a fair bit of advertising expenses, communication expenses, during the festive season, leading to an operating profit increase of BDT 76 crore as opposed to BDT 13 crore same time last year.
Over there was a marginal increase of net finance income of BDT 4 crore or rather 10%. This because we are making money. We're generating cash. That's why you see this marginal increase. That leads us to a profit of profit before tax of BDT 116 crore. And taking into account income tax, the bottom line is BDT 70 crores as opposed to same time last year profit of BDT 36 crores. Yeah. That really is from bKash.
Thank you, Moin Bhai. Selim Bhai, over to you.
Thanks. Thanks, Moin. Thank you, Masud. We have a few minutes talking about the outlook over the remainder of 2024. But before we do that, let's look at any questions that our viewers may have sent us. Dev, have we received anything?
Yes. We have received a couple of questions. So should I start with the bKash first?
Yes, please. Let's let Moin leave after he finishes with the questions for bKash.
Okay, sir. So, we have received a couple of questions regarding bKash performance. Then, if we accumulate all those and there are questions that come that, bKash is doing great in 2023, and that is continued in 2024 as well. So the question is that is this profit sustainable over the period, Moin Bhai?
Yeah. Thanks, Dev. So as I mentioned to you earlier, we were in the negative territory, and we are now edging towards. We've consistently made profits for the past two years. And yes, the short answer to your question is yes. But the growth of profit should not be interpreted because we still are in the investment phase.
There's a lot that needs to be like we have laid out the cash-in-cash-out network, a lot needs to be done in terms of laying out the merchant network. So significant investments will go into the merchant network. And so yes, we will be in the black, but the growth in profits will not be in the same rate. Please bear in mind that we are moving away from a negative territory to a positive territory. So relativity is something that we must keep in mind.
Thank you, Moin Bhai. The last question is on bKash. Please comment on the present competition landscape of MFS industry. Has it become less intense nowadays?
No. As the numbers you see, our market share, we were at 60%-65%. We lost about 2%. So no, competition has not, is no less intense as it was.
Thank you, Moin Bhai. That's all from the bKash part. Back to Selim Bhai, sir.
Thank you. Questions on BRAC Bank, Dev?
Yes, sir. We have received a couple of questions. I'm just starting with the first one. That, given inflation is still high, presently over 9.5%, where do you think bank lending rate might go from present level?
So the highest lending rate until recently under the SMART interest rate restrictions was about 13.55, something like that, 13.55. We do not expect that the rates will increase beyond 14 over the next few months. It's a question of both banks trying their best to maintain spreads, but also not passing on such interest rates to their lending customers, which would result in delinquencies.
So it's a balance between maintaining a good portfolio, a balanced portfolio, growing customer numbers, balance sheet, and also managing a reasonable spread. I sense that going forward, spreads may come down across the banking sector. Currently, they are roughly around 4%. That is likely to come down.
Thank you, sir. Subsequently, the second question is that can you make comment on the potential NIM impact of the new Bangladesh Bank regulation for banks to price loan at market rate?
As I just suggested, because of the overall subdued macroeconomic environment, as you heard, Shaheen Iqbal also start off with his update, I think overall lending growth will be muted, and it will be difficult for the banking sector to maintain spreads comparable to 2023 or certainly comparable to, say, the first quarter of 2024 as well.
So finding an appropriate balance for growth, for growing customer numbers, balance sheet, and also maintaining a reasonable spread and reasonable return on equity, all this will require a lot of fine-tuning over the next few months. As we move into an era of a free market interest rate regime, all these banks will have to analyze their business, their projections, much better than they have done so in the past because all the gloves are off now. So interest rates can spike. They can go down. And banks will have to set their own targets themselves. It will be an exciting time, I think.
Thank you. The next question on our financial performance Q4 2024. Though our CFO has highlighted this, but the question is, what is the reason for the fall in spread in Q1/2024?
2024 was all about the SMART interest rate regime where customer lending or customer deposits were free, but customer lending was restricted to a margin given by the central bank plus the weighted average of the last six months' treasury bill. So that was a benchmark. And the latest rate was about 13.55%. But overall, what has happened since SMART was launched about nine months ago is that customer deposit rates were free from day one, and therefore interest rates were able to rise very quickly, as a result of which a bank's deposit portfolio was repriced very quickly, whereas the asset portfolio was repriced at a much slower rate. That resulted in overall NIMs for the industry going down.
Thank you, sir. We have received a couple of questions on the foreign exchange part. So the first question is that, has the transaction in the interbank FX market resumed following last week's depreciation?
Yes, it has. But I'll ask our treasurer to respond to that. It's only been a couple of days, really. Shaheen Iqbal?
Yeah, yeah. I think we are seeing good momentum in the interbank market. We are seeing good transaction volume as well. I think these are early days. Like, after resumption, there are a lot of transaction, a lot of demand, supply. So gradually, it will stabilize. But activity is really encouraging.
Yes. We think this is a big positive for the entire industry. And as Shaheen said, while there may be a certain amount of volatility the first few weeks, our expectation is that this will stabilize very quickly, within a month or so.
Thank you. Shaheen Bhai, thank you. The next question is that, do you have any clarity on how the central bank derived the midpoint of 117 per dollar and how frequently they will revise this midpoint?
A couple of things. This was obviously the result of a lot of analysis that the central bank's own economic economists have done and their engagement with the IMF team as well. We, honestly speaking, expected something closer to 116 taka, and the central bank surprised us with 117. I think their expectation is that the 117 is put forward to accommodate movements over the next few months. Exactly how and when they will make changes remains to be seen, but it will be derived from the same analysis that generates the benchmark.
So this is, I believe, a comparison of interest rates, inflation rates, and exchange rates between Bangladesh and 15 or 18 different major trading partners. So that kind of analysis will be done from time to time. We don't know exactly when, but I'm sure the central bank will monitor exchange rates very, very carefully and will step in as and when needed.
Thank you, sir. The next question is that, with the rising cost of fund and an increased loan base, can BRAC Bank maintain a sustainable spread and profitability, and how might this affect the interest rate or fees for customers in coming days?
We've just moved into this free interest rate environment, so we'll have to wait and see how rates stabilize. Our plan is our aspiration is to continue to manage our spreads around this 4% rate.
If we can increase that, we will. But our expectation is that the strategy to generate better NIMs will be focused on increasing CASA, using our transaction banking capabilities in the corporate bank and the commercial banking businesses, rather than simply increasing customer lending rates. In an environment where inflation rates are high, overall economy is subdued, we do not want to charge the customer with very high rates and, thereby, generate instability amongst our customers in turn and who knows, generate more portfolio at risk or NPLs. So we need to be careful there as well. But if we can go beyond 4%, obviously, we'll do it. But the strategy to do that, as I said earlier, is to reduce our cost of funds. That will be our biggest strategy. Let's wait and see how that works out over the next three or four months.
Thank you, sir. The next question is on asset quality. So, do you anticipate that NPL will increase proportionately as the lending book grows, and how might this impact the bank's ability to offer loans or other services to our customers?
Well, firstly, portfolio quality is a key objective for us. Our efforts will be focused on ensuring that we remain where we are or we continue to improve our 30-day delinquencies and our overall NPLs. So that's first. We are not going to grow at any cost. You will already have seen that we have significantly become significantly conservative in the consumer finance area for close to a year now.
If necessary, we will become more conservative both in wholesale, corporate commercial banking and also in SME assets if we see signs of any major stress in those customer segments as well. Growth is based on us being able to continue to improve the portfolio. We are not going to grow at a cost to the portfolio.
Thank you, sir. We come down to our last question, and this is regarding our sustainability part. One of our investors congratulating for publishing the rich sustainability report that we published recently. The question is that do you have any net-zero target? And if yes, then is there any baseline year?
We've just started on this journey on reporting our sustainability capacity and our results. This was the first time. Hopefully, you will see 2023 results reported in the next few months.
We don't have a net-zero target immediately right now because it needs a much more analysis than we have actually put in place at the moment. But last year, we did analyze our GHG emissions on a portfolio level, and I believe that is also reported in our sustainability report, which is also endorsed by PCAF. This year, we're planning to improve the overall disclosure, but at the same time, I think I have to emphasize that our decarbonization plans may not be entirely in line with what many stakeholders require in the Western world. Bangladesh is a developing country. We have large energy needs. And for us to move completely away from fossil fuel to renewables is not possible at the moment. Therefore, we will have more of a hybrid plan going forward.
The end game, of course, destination model for us is, renewables complete 100%. That is going to take time in a country like Bangladesh. There are many needs of the economy and the people. This is a large population of 170-odd million people, located on a very small piece of land. So we that those needs, those economic and social needs have to be taken care of first.
Thank you, sir. That's all from my side. Thank you.
Ladies and gentlemen, thank you for joining us today. We tried our best to finish in an hour, taking about 10-15 minutes longer. You will have noticed that, the first year 2023 results are quite strong, and 2024 results are very, very strong. It remains to be seen if we can continue this kind of strong financial performance across the remaining three quarters of 2024. We're quite confident.
One of the strengths of BRAC Bank is its ability to respond to the different challenges and stresses of our market and come out with better results than earlier. I say that because I'm sure there will be many challenges going forward, but we are confident in being continually agile and being able to respond to those challenges and still grow customer acquisition and overall balance sheet. I look forward to meeting you again in three months' time when we have the half-yearly declaration. Thank you very much for joining us, ladies and gentlemen. [Foreign language] and good night.