[Foreign language] and very good evening, ladies and gentlemen. I'm Tareq Refat Ullah Khan, Managing Director and CEO, current Chair of BRAC Bank PLC . It is my pleasure to welcome you to our 2024 Full Year Earnings Disclosure Event, where we will also share key highlights from the first quarter of 2025. This is a live webcast event. The link is shared to stakeholders through press advertisement, website post, and Facebook post. We are also live with the presentation on our Facebook page. Next slide, please. This is a general disclaimer. Could you go to the next slide, please? We'll quickly look over our market update, highlights from each business segment, distribution network, risk management, and later present financial updates from our bank, as well as our subsidiaries bKash. 1st, we'll hear from our Deputy Managing Director and Head of Treasury, Shaheen Iqbal, for market update.
Over to you, Shaheen .
Thank you, Tareq [Foreign language]. Good evening, everyone. I'll start with recent developments. Like, we are seeing some good improvements on Bangladesh's economic recovery. For this one, like Central Bank recently has adopted a market-based exchange rate. The country was having challenges in terms of exchange rate management. I think we are seeing good improvements on that line. Also, on the inflation side, as the Central Bank Governor has mentioned, like we expect to see gradual improvement on inflation, means inflation is going to come down. The expectation is below 7% by August 2025 and further downward by December 2025. There are broad-based improvements on the exchange rate and inflation. On the external balance side, like we expect to see an inflow of $3.5 billion of inflow from various multilaterals in the form of marketing support and financing support.
That, again, is going to give us a good boost in terms of FX reserve. Also, we are seeing some good improvement in terms of election. Like, election is likely to be held between December and June 2026. There will be more certainty after the declaration of the election date. Overall balance in terms of foreign currency balance, you can see from the graph, like export has improved, import growth has improved, but overall trade balance has come down. Remittance is showing very good signs, like growing more than 26% per annum. Kind account balance for which has improved. Overall balance has improved significantly, and reserve is stabilizing. Overall, there is good improvement in terms of external balance and economic recovery, in my view. Next slide, please.
You can see, like from the multilaterals, like IMF, World Bank, and IDB forecast, like even though this year's growth up to June this year is muted, next year's projection is pretty robust. Like, we are going to bounce back from July onward. We expect to see good economic recovery from July onwards. Also, as I mentioned in my previous slide presentation, like with the policy rate increase and also the decrease in the inflation, we expect to see gradual improvement on inflation in terms of inflation coming down, which gradually would give us a good position to improve in cutting down the policy rate so that the lending rate might come down at the end of this year. We are seeing good signs of recovery for the economy and good improvement of output by the end of this year.
That's a small brief from my side. Up to you, Tareq [Foreign language], again. Thank you very much.
Thank you, Shaheen [Foreign language], for your quick update. We take note, keynote, that economy is recovering and gaining momentum in all key parameters, including trade deficit, remittances, reserve, as well as the model level of GDP growth forecast. Now, let's hear from our Additional Managing Director and Head of SME on the presentation of SME Business Highlights for 2024 and Quarter 1, 2025. Kamal, over to you.
Thank you, Tareq [Foreign language]. [Foreign language] and very good day to all of you. It's a true honor for me to speak on behalf of our SME banking family, BRAC Bank, as we share our performance highlights for 2024 and the first quarter performance of 2025. As the pioneer and the market leader in SME banking in Bangladesh, 2024 was the year that tested us and inspired us. Our team stood strong against all odds in a very, very volatile economic environment. We continued to move forward with resilience, innovation, and genuine commitment to the small businesses that form the backbone of the economy. Let me share some key highlights that we have achieved together in 2024, as well as in Q1 2025. Our SME customer base grew by 23%. As of March, the customer base stands at more than 700,000, a 24% year-on-year increase.
The highlight of last year's performance, as well as this year's performance, is with SME deposits. We experienced a whopping 53% year-on-year SME deposit growth in the year 2024. The SME deposit book has now gone up to BDT 14,289 crore. We also experienced an additional 8% growth in Q1 also. In 2024, during a very difficult situation also, our SME assets grew by 16%, which now stands at BDT 30,535 crore. During Q1, the growth is a bit muted due to the lower demand by our MFI customers. However, our small business still grew by 16% year-on-year in Q1 also. The trade business experienced a remarkable 29% growth in 2024. In Q1, the trade business has doubled, experiencing a 98% growth. Our portfolio quality, as we all know, we have a very close hawk eye on our portfolio quality in all situations.
We maintain that portfolio quality. We have experienced a 41 basis points reduced NPL in 2024. However, due to the market conditions, there is a slight rise in our Q1 NPL due to the external stresses, but our fundamentals remain very, very solid. We also took significant steps. We have taken significant steps in digital and inclusive banking. Digital account onboarding for SME customers has gone live, making banking simpler for SME customers. Facilities like bKash repayment, 24/7 cash management, and eLab helped our customers better. Collaboration with multilaterals like Swisscontact, Water.org, helped us support the underserved communities, especially women-led businesses. These achievements are not just mere numbers. They represent people, enterprises who are growing, families who are thriving, and communities that are progressing. This is what purposeful banking means. As we look ahead, our vision remains very, very clear.
We will keep leading SME financing, pushing digital innovations, driving inclusive growth, and we will invest more in technology, deepen strategic partnership, and also continue to advocate policies that empower Bangladesh's entrepreneurs. I would like to thank our board, our senior management, our regulators, and above all, our SME customers who trust us every day. Thank you very much. Over to you, Tareq [Foreign language].
Thank you, Kamal. Our SME business has showcased outstanding results in 2024 and continued that trend in Quarter 1, 2024 as well. I will walk you through the next segment, corporate and exchange banking. In 2024, we have achieved tremendous growth in loans and advances due to the development of an enabling platform over the years, which is giving results. We have expanded our footprint in new segments as well, strengthened our footprint that we have entered into the last couple of years. In transactional banking, we have enhanced synergy among the entire departments and inter-divisions. This has yielded a positive impact on our transactional deposit with healthy CASA and TD ratio. This synergy will also help in reducing costs of deposit in the coming periods.
We want to be the leading part, trade bank, and walking on this aspiration, we have undertaken digital platform solutions for the coming period. We have expanded trade solutions in the public segment as well with overall efforts. We have also achieved $5 billion trade volume in 2024. With current momentum, we aspire to reach $7 billion trade volume in 2025 ending. Our prudent risk management culture helped us manage satisfactorily portfolio quality in 2025. Few spikes in NPL may occur due to ongoing economic issues. However, we have taken necessary measures to overcome such challenges. That is all from corporate and exchange banking. I will invite our Deputy Managing Director and Head of Retail Banking, Mahiul Islam, to go through the highlights of retail banking perspective. Mahiul, over to you.
Thank you. Good evening, everyone. In retail banking, we had excellent growth in customer deposits and assets during the full year 2024. I will highlight the key areas. Our customer deposits grew strongly by 35% year-on-year, with a net increase of nearly BDT 8,000 crore plus. Due to ongoing rise in interest rates, our customers were more inclined towards fixed deposits, which reduced our customer mix to 35%. In terms of customer subsegments, which is a key strategy of our retail banking going forward, our premium banking, which is targeted for high-net-worth customers, crossed the milestone of nearly BDT 10,000 crore deposit book. Our TARA, which is targeted for women customers, also crossed the milestone of nearly BDT 9,000 crore last year. We continued our focus on digitalization. 76% of our eligible accounts were opened digitally, and our mobile app, Astha, users crossed 800,000 plus.
We also disbursed 19,500 digital loans in 2024, with a total book of now 23,000 loans disbursed through our [Shubidha] app. We continue to be selective on lending in specific customer subsegments, such as employee banking, government sectors. Our customer assets portfolio grew by 15% year-on-year, with a net increase of nearly BDT 1,200 crore. The asset yield also improved to 9.4%. Another important business side or the portfolio in terms of portfolio monitoring and correction, our NPL decreased to 21 basis points. Compared to the industry, our retail assets portfolio remained in better position. Merchant acquiring, which is another key vertical of our retail banking, also had a very strong growth of 70% year-on-year, which reached nearly BDT 12,000 crore volume in 2024. Next slide, please.
Now I'm moving on to Quarter 1, 2025 updates, where we have continued to grow sustainably on both retail deposits and assets. Our retail deposits, year-on-year compared to last year's first quarter, grew strongly by 39%, with our customer mix remaining unchanged at 35%. However, our cost of deposits increased to 6.36% due to our customers' demand for high-cost retail deposits. We have already taken measures on savings product into our cost of deposit. Customer assets portfolio saw strong growth of 22% year-on-year, especially this quarter, and we crossed the milestone of nearly BDT 10,000 crore in retail assets, which is the largest in Bangladesh. In terms of portfolio monitoring, we faced the challenges, particularly on the NPL side, due to macroeconomic stress in PAR increased by 21 basis points, and our NPL increased to 4.02%, which was mainly due to changes in Bangladesh Bank guidelines on loan classification.
Overall, we are now well-positioned to take our retail banking business to newer heights. That's all from my side. Thank you.
Thank you, Mahiul . We have taken a comprehensive, strong strategy for driving retail asset and deposit growth in our particular segment, and which is clearly seen in our Q1 results as well. Thank you, Mahiul again. Now, I will invite our Deputy Managing Director and Head of Treasury, Shaheen Iqbal, again to go through the highlights of the treasury and FI segment. Shaheen , over to you.
Thank you, Tareq [Foreign language]. I think one of the biggest successes that the treasury had is to take the opportunity that the market is offering. We continue to get benefit out of our position through investing in government securities and effectively managing our duration of government securities portfolio. Again, another key area of success is ensuring proper flow of assets and liquidity. Our remittances grew by 96% in 2024. We have moved to rank 4th position from a lower position, like 6th. This has really enabled all the franchise to really get benefit out of this FX flow. Overall, we have been very strong in terms of both liquidity in local currency and foreign currency. We were able to capitalize on the overall liquidity in both local currency and foreign currency as well. Also, we ensured we managed our risks very effectively. We kept ourselves very liquid.
We managed our risks position very efficiently, and we have been able to take benefit out of the situation very efficiently as well. Overall, 2024 and Q1 2025 was a very successful period for BRAC Bank Treasury and the BRAC Bank as well. Let us move to the next slide. We continue to be the number one bank in terms of international rating and local rating as well. We are the only bank equivalent to sovereign by both Moody's and S&P. I think that's it from my side for the time being. Thank you very much again. Over to you, Tareq.
Thank you. Now, let me ask our Deputy Managing Director and Head of Branch Distribution Network, Sheikh Mohammad Ashfaque, to go through the highlights. Ashfaque, over to you.
Thank you, Tareq [Foreign language]. BRAC Bank's Branch Network continues to deliver strong, consistent performance. We achieved a record deposit net growth of nearly BDT 13,000 crore in FY 2024, with an impressive nearly BDT 5,000 crore in Q1 2025 alone, signaling sustained customer trust. Asset disbursement and remittance figures reflect robust engagement, with credit card issuance reaching 22,000 in FY 2024 and 2,500 cards in Q1 2025. Our strategic moves, including relocation of 13 branches, BI tools for managers, and opening of 40 new outlets, are enhancing customer access and experience. Importantly, compliance remains a cornerstone, with 0% branches needing improvement in ICC audit and 44% rated strong in AML. The momentum is very strong, yet we have room to grow in the spaces like increasing CASA mix, digitalization of more services, and freeing up our staff for more high-value customer interaction and constant focus on improving CX.
Thank you very much, Tareq [Foreign language].
Thank you, Ashfaque. Our Branch Network is bringing the highest deposit growth over the years, driving deposit growth of the organization and fulfilling our requirements, actually. Our aspiration will be growing more transactional deposits from this channel over the coming years. Now, I'll go to Deputy Managing Director and Chief Risk Officer, Ahmed Rashid Joy, to go through the highlights of our risk aspect. Joy, over to you.
Thank you, Tareq. Good evening, everyone. Ladies and gentlemen, in our 1st slide, it testifies to the asset quality, and you can see that we ended the financial year 2024 with NPL of 2.63%, lowest in our bank's history. Even in absolute number, if you look at the blue bar, the NPL amount was lower by BDT 113 crore than that of the year 2023. Here, I'd like to briefly explain to you why our bank's NPL number is lower compared with the industry. 1st is the diversified portfolio. Our loan book is well-balanced: 42% exposure in corporate, 42% in SME, and 16% retail. 2nd is the granularity. Around 60% of our book is in SME and in the retail segment. Average ticket size for retail loan is $6,500, and for small business, it is $14,000. Sanctions to a diverse group of professionals and in the various economic subsectors.
Moreover, our risk acceptance criteria in corporate banking have been formulated after a thorough understanding of the corporate banking market risk. These are the fundamentals that why our asset quality is better, which I thought to share with you. However, in Q1 2025, you will notice that our NPL increased to 3.13%, and that is because of the change in the definition of past due on term loans by Bangladesh Bank, which came into effect in this period. Next slide, Dev. On the top left corner, we are presenting our weak loan ratio comprising of NPL, COVID restructuring, and rescheduling. In 2021, that is just after the COVID, the ratio was 8.20%, and it declined to 3.13% in 2024. You will notice that the gray-colored portion of the bar representing pandemic-related restructuring disappeared in 2024.
However, the stress portfolio increased to 3.64% in Q1 because of the increased NPL, as I mentioned earlier. On the bottom left corner, we are presenting the vintage of our loan in the last seven years. The gray portion of the bar represents the total amount disbursed during that year, and the red portion represents current NPL amount originated in that particular year. Let's take the example of 2022, where we disbursed BDT 40,617 crore, of which presently NPL amount is BDT 421 crore, which is 0.71% of the total disbursement in that year. In the last seven years, we disbursed total loans for BDT 2.49 trillion, from which only BDT 17.66 billion is now in NPL, and that is also 0.70% of the total disbursement. This is all about vintage, which clarifies loan origination in a better way.
Our NPL coverage ratio on the bottom right, I mean top right, ratio in the financial year 2024 was 134%. We have kept a buffer in the year end, considering the regulatory changes on the definition of NPL that were forthcoming. You may notice that the coverage dropped to 116% in Q1 because of the rise in NPL. Ladies and gentlemen, for the 1st time, we have rolled out all sorts of statistical scorecards, like application behavior and collection scorecards in our retail lending. Soon, we will roll out behavioral scorecards in our small business lending. Only then we will price risk accordingly. That's all for me. Tareq, over to you.
Thank you, Devin. We have grown our business in many forms in the last couple of years. At the same time, we currently manage our portfolio quality. A big appreciation goes to our relationship team, sales team, our underwriting team, incubator, and overall risk management process and procedures. Thanks goes to all. Now, let me introduce our Deputy Managing Director and Chief Financial Officer, Mr. Masud, to go through the financial performance highlights. Masud [Foreign language], over to you.
Thank you, Tareq. [Foreign language] and good evening to all. 2024 has been a remarkable year for BRAC Bank, and it continues in the quarter 1, 2025. If you can notice, the strong results have been delivered by the bank. It's a strong set of results. Predominantly, the driver of this business has always been our customer. In the year 2024, our customer base grew by about 14%. The breakdown is here. Roughly about every day, we have included 2,000 new customers. In Q1, it has actually grown by about 50%. Our balance sheet momentum continues in 2024, which also spans into 2025. Deposit, if we look at our franchise, our bank has produced, delivered about 4.6 times growth compared to the market. It was 34%, whereas the market was growing about by 7%. In terms of loan, we have grown about 2.8 times on the market, 20% versus 7% again.
As a result, we have in both the spaces, both in deposit and loan, we have gained market share. Fundamentally, our performance has been categorized by improving in our new. If we look at in the last 15 months, we have grown our net interest margin both from our lending and investment work. That has helped to achieve our operational efficiency in terms of the way we have reported our cost-to-income ratio. That has dropped down to 47% with a clear positive show of 22%, which means the percentage of our investment, our cost has grown. The revenue is growing faster with a clear difference of 22%. I would like to also mention this. The bank has been continually investing in people, which is our major capital, infrastructure, technology, and other aspects.
If we look at our trade with finance business, our trade with throughput has completed in 2024 was $5.6 billion. In the first quarter, we have achieved $1.8 billion. Overall, our interest income and NFI base has grown to 11. You'll be happy to know as we speak, our balance sheet has exceeded BDT 1 trillion. As a result, the base of this revenue is now quite significant. Another aspect of our business has been focusing on the foreign exchange. We are kind of re-energizing and focusing on this remittance business. We have secured 4th position in terms of the remittance gainers, which was 6th position in 2023. I think our CRO has mentioned we have been continually improving our asset quality. In 2024, it was 2.6%. However, in Quarter 1, it has slightly increased because of the transitioning into the new regulation.
I would like to convey our heartfelt thanks to our underwriting team, collection team, who has been continuing a fantastic job in the collection space. When it comes to capital, there's no doubt BRAC Bank continues to hold a very strong capital position. In the total capital position, about 85% is the core capital, tier one capital. If we move forward, I was mentioning the market share. We have delivered a very strong result, and as you can see, our strategy of gaining market share is making end loans. In the end of 2024, the market position in terms of deposit was 3.88%, whereas lending was 3.72%. As a franchise, we have been very strongly growing in the deposit side, which can be seen in the Bangladesh Bank data. Now we are capturing about 4.5% of the deposit market. Moving on, we call it the wheel of Astha.
Astha is our retail app, and we'd like to give you a quick glimpse of the element customer deposit loans, our lending yield, our cost of deposit, total revenue, total expenses, and regulated capital. I have already covered this. My colleagues have covered this. The interesting part is that the bank delivered about 66% year-on-year growth on the profit after tax. Therefore, we have proposed a 25% dividend for our shareholders, and we will be holding our AGM on the 19th of June when the shareholders will decide on this. Moving on, Q1 also shows a good number in terms of the profit after tax. It is a year-on-year 34%. If you look at customer deposit loans, most of them showing a green light with a very strong number. Moving on, customer deposit as a franchise, as a bank organization, we have grown year-on-year 36%.
As we can see, all our customer segments actually growing very strongly. SME grew about 53%, retail 35%, and corporate was no less, 27%. In Q1, on a year-on-year basis, that continues 36%, SME 46%, 39%, and corporate and institutional 24%. Moving on, this has been one of our core strengths, the diversification. As you can see, our deposits are also quite diverse and distributed among the client segments. Noticeably, SME is picking up and growing very, very fast. Looking at Q1, this has also grown to 22%, 30% from the corporate side, and retail continues to support us with a very strong funding. Moving on, I think this is our CASA and TD mix, which remains more than 40%. Last year was 42% in Q1. It has slightly gone down by 41%. I think when we look at the loans and advance, the bank grew about 22%.
It's been muted, as you can hear from my business colleagues. This is a kind of a function and reflection of the market. BRAC Bank is continuing to focus on the right kind of strategy, and we believe in the coming quarters, we can see this growing even faster. Moving ahead, I think this is Q1. I have covered it. Go to the scorecard. Yes, this is 2024, our diversified balance sheet, corporate and institute 42%, SME 42%, and retail 16%, kind of just opposite of the deposit. Q1 remains more or less similar composition. I think we have highlighted most of it. I would just like to highlight that earning per share in last year for last full year was 6.86, a significant growth. Our ROE, return on asset, is 1.46%. I believe there is a room for us to even command a higher position.
ROE is 17.4%, and NAV has improved by around BDT 6 per share and with a very strong capital position. In Q1, the profitability and all other metrics are improving, as you can see. I think we can move with this. We can have a go to the yes, yes. Subsidiaries, full year subsidiary share. Yeah. Thank you. Thank you. This is our overall group performance, bank plus our all four subsidiaries, two capital market subsidiaries, and an exchange house, and of course, bKash. However, because of the market condition and environment, our capital market subsidiary is in the negative space. While as soon as the market gets into a right track, we believe these two NGCs have the potential to come back immediately and fire their all engines. BRAC's trajectory is coming back to in the business, and regaining its footing in the market.
We are hoping to see better results in 2026. I think 2025 Q1 reflects more or less similar, and bKash has been producing a very, very good number. While, as I can see, the other subsidiaries also put up better results. As a result, our Q1 number is also showing a good growth year-on-year. I think if Mahiul has joined us, I'd like to invite him to let us, if we can hear from him about bKash regarding full year and first quarter.
Yeah. Thank you, Masud [Foreign language]. And very good evening to all the viewers. As always, I'll take you through the six basic health parameters of bKash. The 1st one is our biggest asset, which is customers. We added 300,000 customers in the 1st three months of the year, which averages around 23,000 customers a day. Our customer base increased by 0.4%. However, our active customer base increased by 3%, which goes to say that more and more customers are using bKash for other use cases. We added 1.2% to the market share in these market conditions. In terms of merchant base, it remained more or less stable, about 7,000 more merchants were added into the ecosystem. Our transaction volumes, BDT 1.1 billion in a month, which translates to about BDT 38 billion being transacted every day on average.
In terms of agent point, we finished off March with 362,000 agents spread across the country, which is about a 4.5% increase over the end of December last. The next slide, please. Yeah. Moving on to the P&L. This is a full year P&L. In 2024, we clocked a revenue of BDT 5,729 crore, which is a 20% increase over prior year. The revenues have basically come in from volumes, which increased by 20%. Why have volumes increased? Because of increased customer base and increased average transaction value per customer has also increased. Those are the two big drivers of volumes. If you look at it on a product-wise basis, it is essentially cash out and B2B that has driven these revenues. BDT 5,729 crore was the top-line revenue.
If you take off that, we come to net revenue, which is BDT 5,058 crore, which is again about a 21% increase over prior year. The cost of services was BDT 3,270 crore, which is a 12% increase. Now, if you notice that our net revenue increased by 21%, however, our cost of services increased by 12%. That is because of two reasons. One is customers are transacting more of the value-added products like payments, bill pay, etc. The other reason is that we rationalize some of our commissions that we pay in the supply chain, which are agents and distributors. Our gross profit has increased from 30% to 35% in 2024. That leads to a gross profit of BDT 1,788 crore, which is a 42% increase over the same period last year. In terms of expenses, increased by 20%, more or less in line with the top-line gross revenue.
Operating expenses, the primary drivers of expenses are technology costs and human resources costs. Commercial expenses represent a 12% increase, and that's really the increase in our marketing expenses and our distribution expenses. That leads to an operating profit of BDT 342 crore, which was only BDT 31 crore at the same time last year. Profit and net finance income is the income that we derive from our own working capital, which also increased by 17%. Profit before contribution to the Workers' Profit Participation Fund was BDT 531 crore. You take off WPPF, profit before tax was BDT 505 crore, which is a 176% increase over the same time last year. After income tax, the bottom line comes to a profit of BDT 316 crore, which is a 220% increase over the same time last year.
Yes, this will be the 3rd year that bKash is making profits, and we made the ever-highest profit of BDT 316 crore. A quick snapshot of how we are doing in the 1st three months of the year. Our performance for the 1st three months compared to the last three months of 2024. We have grown by 35%. Our volumes have also grown by that much. The primary driver of these revenues is volumes. Our cash out revenue is really driving this, and our P2P revenues are driving this gross revenue. BDT 1,859 crore is what our top-line revenue was. After that, it is BDT 1,637 crore. Cost of services has the increase of cost of services is the same as the revenue growth. We have not touched or we have not done anything to optimize the channel cost because we did make a change in 2024.
We did not make any changes so far in 2025. Operating and administrative expenses, basically the primary driver again is technology and people costs. Commercial expenses is BDT 125 crore. Please, this was the Eid was in the month of March. All Eid expenses has been is a part of the expenses. Also, the revenue is a part of, so on the two festive months, our revenues go up. The 1st Eid, the expenses are included here, and so are the revenues. That comes to an operating profit of BDT 139 crore, which is an 83% increase over prior year. Net finance income increased by 31%. Profit before tax is BDT 189 crore, which is a 63% increase over prior year. After tax, it's BDT 132 crore, which Masud mentioned in his slide.
Yeah, at the end of the first quarter, BRAC Bank's bottom line was BDT 132 crore, which has been the ever-highest so far. That's it from my end.
Thank you, Mahiul , for your excellent quick update on bKash financials. We are at the end of the end-to-end discovery event. Now I would like to request Dave to initiate the question-answer session. I hope you have received questions from our very rigorous MAGITAN. Dave?
Yes, Tareq [Foreign language]i. I would like to 1st ask Mahiul [Foreign language] a few questions about the bKash. Mahiul , the 1st question comes at what's the percentage contribution from cash out and merchant business in bKash's revenue?
Cash out is about 76%, and merchant is about 7%.
Thank you, Mahiul [Foreign language]i. Same question is that the float money of bKash's growth significantly just in a quarter. So what are the catalysts?
One is the volumes have increased, and one is effective interest rates have increased because primarily the yields on government securities have increased, and that's been the driver of the floating component.
Okay. Thank you. The 3rd question is that what will be the competitive landscape if foreign players like Google Pay come into play?
As I showed in my 1st slide, bKash has a market share of about 66.5% at the end of March. We continue to hold this, and bKash continues to be the dominant player. As the market expands, it is quite natural for operators to be attracted to this market. bKash is confident of holding on to this share because of the sheer presence on the ground.
Thank you, Mahiul . The last question on bKash is that we have seen that bKash has added feature on automated cash management. So what would be the impact of this particular feature on your financial performance?
The automated cash management really benefits the agents who can transfer or deposit money to increase either their e-money inventory, or if they need cash, they can withdraw cash. This is almost like a 24x7 exercise. They do not depend—in normal circumstances, they would have to depend on the distributor's staff coming and servicing the agents. Now it is almost like a self-service. They can go to an ATM and withdraw cash, or if they need e-money, they can go and transfer money to bKash's account and automatically get e-money. It is a round-the-clock service for agents with small quantum of working capital. They can repeatedly convert their cash into e-money and vice versa. Their return on capital employed increases dramatically with 24x7.
Thank you, Mahiul . That's all that we question received for the bKash. Now I will come back to Tareq [Foreign language]. Tareq [Foreign language], we have received a few questions on BRAC Bank performance. So I'd like to ask a few questions on that. The 1st question is that how BRAC Bank forces the loan growth and market landscape going forward?
Okay. If you look back our past trajectory for the last couple of years, you'll see huge growth we have achieved over the years. Because it's not achieved in a day. We have been working to create the enable platform for the last couple of years, and we keep actually giving the results. Our midterm strategy was to focus on doubling our portfolio within a defined time frame. That milestone we have already achieved. Our longer-term vision and objective remains unwavering. That is to become the largest and most impactful bank in the industry. We'll not stop over there. Our aspiration is much larger than what we have actually achieved so far. Thank you.
Thank you, Tareq [Foreign language]. The next question is about our asset quality. So I would ask the question to Joy [Foreign language] directly.
Yes, here we go.
To Joy [Foreign language] , with the new loan classification and provisioning requirements, which is in effect from 1 April 2025, how will the new regulation affect BRAC Bank's NPL and provisioning strength? Given SML Lending, which is one of our core strengths, and we used to enjoy lower provision over there, is a huge part of BRAC Bank's lending portfolio going to be impacted for that?
Yeah. The 1st part is on what will be the impact of NPL. We have done this exercise, stress testing, I mean, from the end of last year a couple of times just to see what will be our impact given the new regulation. We found on average like 30-40 basis points will increase in our NPL ratio. It is an increase of 0.3%-0.4%. This is one. The greater impact, what we see, is on the provision side. In what sense is that? The new circular also suggests that the general provision will be increased for SME lending from 0.25% to 1%. The others will have benefit like retail and the corporate. Now, since our SME book is very big, we will have higher requirement for the general provisions.
That will come into effect from April 1, and that we are planning to book it on a monthly basis till June 30, I mean, in the middle of the year. That will be done. Bottom line is that the general provision will increase for SME. On the NPL impact, it's like 30-40 basis points only. Thank you.
Thank you, Joy [Foreign language]. Thank you. Coming back to Tareq [Foreign language], so you have already explained, but again, I'm repeating the question. The question is that BRAC Bank's medium-term strategy comes to an end, and what will be its plan for the day's end?
I would like to reiterate again that our objective is to become the largest and most impactful bank in the industry. It is a broad objective that we are actually pursuing to achieve. This is our objective. Until and unless we have achieved this new objective or refined objective, our persuasion or our effort will be there.
Thank you. Thank you, Tareq [Foreign language]. Coming to the next question, could you please share the key factors that influence interest income in 2024?
I would like to refer this question to our CFO, Masud [Foreign language].
Over to you, Masud .
Thank you, Dave. Yes, as we were discussing, our balance sheet has grown significantly in the last year. Our balance sheet has grown about 28%. As you can see, our lending book grew about 20%. The investment book grew about 30%. Altogether, the volume has also played a key role. As I was mentioning, our NIM has also improved. If you can recall last year when we closed 2023, our NIM was close to 4%, 3.94% or 3.96%. When we exited 2024, the NIM was 4.1%. That is a clear 15-20 basis point year-on-year movement. If you look at the 2nd half of 2024, the NIM was improving because the SMART was abolished, and we could price our asset as per the supply and demand.
Since we are playing in the three different business segments, particularly in the SME and corporate, this was quite 1st in pricing our asset, while retail is comparatively long-range product and lending book. Therefore, with this diversification, overall, in the last six to eight months, we could see a great improvement in our NIM, which has helped in growing our interest income.
Thank you, Masud [Foreign language]. The next question is also related to the interest-earning assets. I would ask the question directly to you. The question is that what are the expected key drivers or factors that will impact the interest-earning asset and funding cost in 2025?
I think Shaheen mentioned that we're actually in a good spot in a sense. We foresee this opportunity and took an early position in terms of our investment book. We have repositioned in terms of maturity of our investment book. We have got around, as we speak, BDT 25,000 crore-BDT 30,000 crore book, which is kind of in different buckets. On average, it's over two years maturity. The yield, when we locked it, was pretty decent, which is close to 12%. On the other hand, as we have a short-tenor book, in our overall local currency, yield is now reaching about 12%. Net-net, I can see this growth in the net interest income will continue going forward. However, we have been driving our deposits very, very strongly. I would say at a very competitive price.
The next, when we grow, the strategy is to focus on the CASA, particularly on the transactional flow, which we can see a great improvement in the last two-three quarters, both from SME and also corporate, as usual. Also, a renewed focus from the retail side to go after the particularly savings space. Yes, our cost of deposit may have been a bit on the high compared to our peers in terms of overall market. I think overall, with this strategy, the cost of deposit and cost of funding will go down. As a result, higher yield and lower cost of fund would give us even stronger net interest margin going forward.
Thank you, Masud [Foreign language] . Back to Tareq [Foreign language]. The question is that has there been any changes in the bank's liquidity profile or funding mix, and is the bank focusing more on corporates right now?
Absolutely not. Actually, what we have projected and our asset mix is you have seen that our asset mix is blended with 50% SME, 35-40% is corporate, and 10% is around retail. Since our book is growing, our pile will be much bigger, but the ratio will be more or less the same. Strategy will be actually the same. The way we have been leading this bank for the last couple of years, and the way we have already been successful in some areas. We do not want to change the strategy unless any disruption comes, actually. Sometimes market disruptions, sometimes we have to tweak our strategy a bit, but we do not shift away from our objective at all. Thank you.
Thank you, Tareq [Foreign language]. We are just about to in our last question. The question is that how does BRAC Bank plan to balance continuity with potential shifts in the strategic priorities with the resignation of MD and CEO Salim Ahmed Hussain? What would be the future strategies or directions in this context?
Yes, actually, partly, I have already answered the question because our objective will remain same. Our strategy will be on the basis of the market condition. Nothing will change. Mr. Salim Ahmed Hussain has already submitted his resignation on personal ground, and our board has accepted his resignation. I think nothing will change, actually. It is the objective and the strategy that we have already played. We have laid the foundation to grow our assets and deposits in many forms, and that will be continued. Masud [audio distortion], would you like to join in this conversation?
Yeah, I think thank you, Tareq. You rightly say, nothing changes. In fact, we thank Salim [Foreign language] to steer us to here. He has made the foundation. We'll go on this foundation and excel even higher. To my mind, there is nothing has changed. In fact, we will be working on his path and build this franchise and bank to even newer heights.
Thank you. Thank you, Masud [Foreign language] and Tareq [Foreign language]. That's all from my side.
Thank you, dear audience, respected stakeholders, for joining with us in this live earning disclosure event. We look forward to seeing you again with our H1 results in the next event. Until then, [Foreign language], goodbye, and thank you.