City Bank Ltd
- Region: Asia & Pacific
- Country: Bangladesh
- Sector: Financial institutions
- Year: 2017
- Domicile: Bangladesh
- Instrument: Loan
- Commitment (MNOK) as of 22.12.2017: 80.9
- Original Commitment (MNOK): 80.9
Norfund has signed a USD 10 mill loan agreement with City Bank in Bangladesh to contribute to increased access to USD financing for local export/import companies. Export industries are a growth driver of Bangladesh’s economic development.
City Bank Ltd is among the larger private banks in Bangladesh. It has presence throughout Bangladesh with 120 branches serving more than 748,000 customers. The bank has one of the largest distribution networks in terms of ATMs, POS, branches, cards service centers and call centers and is the sole provider of American Express. In 2014, City Bank was awarded the best bank in Bangladesh by Euromoney.
High need for financial services
The need for professional and accessible financial services is high in Bangladesh. The country is defined as a least developed country, it has a large (163 million) and young population and the financial sector penetration is low.
Bangladesh experiences positive economic growth with an average GDP growth of 6% the previous ten years. Export industries are increasingly becoming a growth driver of Bangladesh’s economic development, and the Bangladesh garment industry is now the second largest in the world.
The banking sector in Bangladesh is still dominated by state-owned banks. However, they suffer from poor asset quality and their market shares are steadily declining. There is thereby an ample room for growth for dynamic private banks, especially those that target the SME segment.
Bangladesh is a priority country for Norfund, and we are happy to contribute to strengthening the banking sector and local export and import companies.
Norfund CEO Kjell Roland
Support local export/ import companies
City Bank is one of six banks in Bangladesh that offer foreign currency loan via an Offshore Banking Unit. This is a unit that has received a license from the Central Bank of Bangladesh to provide foreign currency financing. Norfund’s loan is earmarked to this Offshore Banking Unit and will be sub-lent to local export/import companies.
Norfund will thereby contribute to increasing the access to USD financing for local export/import companies and to help them mitigate their foreign currency mismatching risk. The loan will also contribute to improving the balance sheet structure of City Bank and in general to promote employment in the country.
City Bank aims to help local companies to make their factories more efficient, and move from exporting raw materials to processing and to become more competitive.
City Bank’s MD and CEO Sohail RK Hussain