City Bank PLC. (CITYBANK) Earnings Call Transcript & Summary

Hello and good afternoon, everyone. Welcome to City Bank PLC's earnings disclosure web event of the fourth quarter of 2024. I am Syeda Saima Hossain, your host for the event, welcoming you today. Thank you all very much for joining us. Today, we have here amongst us the honorable Managing Director and Chief Executive Officer of City Bank PLC, Mr. Mashrur Arefin; Additional Managing Director and Chief Financial Officer, Mr. Mohammad Mahbubur Rahman; Deputy Managing Director and Head of Wholesale Banking, Mr. Mesbaul Asif Siddiqui; Chief Risk Officer, Mohammad Firoz Alam; and Deputy Managing Director and Head of Internal Control and Compliance, Mr. A.K.M. Saif Ullah Kowchar. At City Bank, we take great pride in engaging the investment community in our endeavors. While disclosing our performance and actions, we adhere to strict code of full transparency and responsibilities. City Bank has always measured its success, not only in terms of its bottom-line numbers, but also in terms of the goals it has set for itself in order to become the finest Bank in Bangladesh. Our success is attributed to the continued growth of our business as well as the market's evolution to satisfy the increasingly sophisticated expectations of our respected clients in the areas of liquidity, service, reliability, and mobility. We have made it this far with the help of our community, team and stockholders by tenaciously adhering to the motto of service and trust. In light of this, we have gathered here today to discuss the Bank's current financial situation and its forward-looking strategies. We shall start with our AMD and CFO, Mr. Mohammad Mahbubur Rahman, presenting the financial performance, followed by our Managing Director and CEO, Mr. Mashrur Arefin, addressing all of you, and finally, end with a question-and-answer session. Before we proceed, I'd like to inform you all that while scheduling the event, we attempted to choose the most fitting time slots so that we could accommodate most of the participants, both from local and foreign vicinities and time zones. I'd also like to add that we have opened our Q&A portal, which you can see at the bottom right corner of your screen. During our presentations, you can log in and place any relevant question in the window. We shall try our best to address them in our Q&A session depending on the time available for the program. Ladies and gentlemen, I now request our AMD and CFO, Mr. Mohammad Mahbubur Rahman, to start with the financial performance presentation. Over to you, sir.

Thank you, Saima. Good afternoon from Dhaka. It's a great pleasure for us to present the financial statements of 2024. 2024 was one of the best year in City Bank history. So that's why it's a great honor for me to present this result to you all. So we'll start some overview about the macroeconomic situation. We are -- first, we are showing you the GDP. We are projecting to end the financial year of 2024 with 5.3% GDP growth, though multilateral development organization are projecting lower GDP growth. But on the other hand, they are also projecting higher GDP growth around 5% to 6% by 2026. So we have faced several headwinds in 2024 and also -- especially 2024. And we are hopeful that we will be able to overcome all these challenges and we'll start again -- we'll have the higher growth trajectory again. And inflation was one of the concern for the economy. And you can see that the double-digit inflation has come down to single digit, and Central Bank is projecting to bring down the inflation to 7% to 8% by the end of -- by the middle of the 2025. And here, you can see that the export, import and remittance and foreign reserve position. The foreign reserve portion is around $20 billion to $21 billion. And the good thing is that the government has actually settled all overdues -- most of the overdues. So whatever the FX position -- foreign reserve position you're seeing here, that will continue, and expected to grow further as remittance is growing very satisfactorily in this year, around 23%. And by the middle of the year, it will reach around $27 billion, which will be the highest ever remittance in the country's history. Export is growing at a rate of 8% still -- though global issues like tariff is -- actually has brought a little bit confusion about the growth of export, but still, we are having around 5% to 10% export growth. Import is a little bit depressed because of the prices of dollar that we face, especially last year and the middle of -- beginning of this year, but gradually, it's going to increase, so. And then the credit growth is -- this is a challenging area, which has actually decreased to 6.8%, though the Central Bank target to have around 9.8% credit growth. NPL is a challenge for the industry. Overall NPL ratio for the industry is around 7%, though the private commercial bank is having around 12% NPL ratio. Now starting with -- now I'm showing the City Bank's result for 2024. As I already have told you that 2024 is a remarkable year for City Bank. We ended 2024 with 12% growth in loans and advance and reached BDT 445.7 billion. And -- but on the other hand, interest income has grown by around 33%, from BDT 34 billion to BDT 45 billion. And the increase of -- the main reason for this high growth interest income is that Central Bank has lifted the limit on interest rate. So that is a very good news for the banking industry. So that's why the interest yield on advance has grown from 7.95% to 9.78%, increase is 183 bps. So this will -- we are expecting to have more growth in interest rate in coming days. Loans and advance. Here, you can see that our -- most of the loans and advance is being held by wholesale banking division. Previously, we used to show the corporate bank and commercial bank separately, but recently, we have merged these 2 segments for the better actually business. So wholesale banking as a whole, they contribute 60% and rest of the 40% is contributed by retail, small and microfinance, medium segment, and card. We have been giving more focus on retail and small segment. And that's why it was more than -- around 70% 5 years back, and now it has reduced to -- wholesale banking contribution has reduced to 60%. And the focus in other areas is continuing. Though for last 2 years, we have actually had a little bit slow growth in retail and microfinance to avoid the risk associated with the macroeconomic situation. But our long-term growth is to give more focus on retail and microfinance. And here, we are showing that, in 2024, we had the highest ever deposit growth, around 25% deposit growth. We have experienced BDT 122 billion equivalent of deposits added in 2024 when the country experienced many challenges from political to macroeconomic situation. So customers are placing huge confidence in City Bank. And here, you can see that deposit in City Bank has grown by 31% in 2024 and reached BTD 514 billion. But interest cost has grown by 79% from BTD 17.9 billion to 30%. You may ask that why actually we have increased the cost -- interest expense. Because of the liquidity situation, many banks actually increased their interest rate for the depositors. So to cope up with this situation, we also had to increase our deposit rate for term deposit. That's why term deposit cost has increased from 6.3% to 7.6%. But still, our deposit rate is lower than our competitors and all of the banks. So -- but still, the impact of this hiking interest rate has impacted our cost of deposit, which has increased from 3.46% to 4.7%, 129 bps actually increased. Then here, we are showing that our retail business segment, which is -- they are contributing most of the deposit with 65% contribution. It shows that City Bank's retail business is actually one of the very strongest business unit in our bank and which has become a very strong pillar for the bank, and it shows the sustainability of our capacity to acquire more business and especially, the liability business from the market. Though the CASA ratio has reduced from 50% to 45%, but we have done it strategically. And we'll show you actually why we have actually acquired more term deposit because there was a clear strategy behind it. So despite increase of cost of deposit, here, you can see that, in red line, the cost of deposit has increased from 3.5% to 4.8%, but our spread or net interest margin that is shown in green line has increased from 4.5% to 5% because the yield on advance has increased from 8% to 9.8%. So that's why we had -- we actually took the opportunity to acquire more deposits at higher cost because we knew that we'll be able to actually acquire business at higher rate because Central Bank has lifted the limit on interest rate. At the same -- on the other hand, there is also opportunity in treasury bill and bond as government needs to raise fund from the banking sector. The rate for treasury bill and bond has increased quite significantly in 2024. So we took the opportunity to deploy those high-cost deposits to treasury bill and bond. And here, you can see the volume has increased from BDT 78 billion to BDT 138 billion with around 76.8% growth. But income, you can see that it has grown by 244%. So our strategy to acquire deposit with the higher rate has actually given us better result because we could deploy this -- our additional deposit to the loan and as well as for the investment in treasury bill and bond. So export income -- export and import business is one of the strength of the City Bank. We cover more than 6% of the market share. So -- and when the country's export growth is around 5% to 10%, import is almost without any growth, but our export growth has grown by 27.8% from $2.5 billion to $3.2 billion, import has increased from $2.6 billion to $3.6 billion with 38% growth. And commission fees and FX gain also increased from BDT 5.6 billion to BDT 6.5 billion, [ or ] 16% growth. Credit card business, though 2024 was a very challenging year because of the macroeconomic and political situation, but our -- despite this challenge, our credit card base has increased by 6% and reached around 708,000 card base and credit card bill business has also grown by 8% from BDT 43.9 billion to BDT 47.5 billion. The income has also increased by 26% from BDT 1.7 billion to BDT 2.1 billion. Though in terms of size, it's not significant, but credit card is one of our core area, we still hold the largest market share, and it gives us a huge brand mileage. And also here, I'm showing that we have launched 2 significant card in the market. One is the first vertical Visa card and another is the very high-end first ever AmEx metal card for the high-net-worth customer. So it shows that City Bank is still actually thriving very strongly in the credit card business. So overall, revenue has grown from BDT 27.6 billion to BDT 30.5 billion, with 43% growth. On a consolidated basis, it's with 43% growth because our subsidiaries are having different challenges. But in a solo basis, City Bank has significant revenue growth. So against 43% revenue growth, our operating cost growth was 16.5% from BDT 14.6 billion to -- it increased to BDT 17 billion. Our staff cost has increased by 14%, though we restructured our salary to motivate our talents and also to help our human resources to adjust with the inflation in the market. We have restructured our salary. So our salary has increased by 14%. Our other operating cost has increased by 19.6% because still we are investing heavily for the digitalization of the bank, and the benefit of this digitalization will definitely add more revenue in coming days. So this is the summary. Here, we are showing that the operating profit, which has increased from BDT 13.9 billion to BDT 23.5 billion. So this, again, is the highest ever operating profit in the City Bank history with 69% growth. Then provision. 2024 is -- another challenge in the banking sector is the NPL. Overall NPL has increased in the market. And Central Bank has also tightened the NPL regulation in the right direction. So we also appreciate that. So that's why our NPL ratio has increased a little bit. And volume-wise also, it increased from BDT 14.3 billion to BDT 16.5 billion. And also, our provision charge has increased from BDT 2.8 billion to BDT [ indiscernible ] billion. Also, we had to make a provision against our investment in capital market. And also our investment in subsidy -- investment of subsidy in the capital market also caused us a higher provision. But we have taken the full provision against all the -- for all the decline in the price. So it has been covered. So provision coverage ratio is still above 100%. But having said that, having this high level of provision charges, our net profit is even higher, that will show in the next slide. Here, you can see the -- actually the breakdown of the result of our subsidiaries along with City Bank. City Bank profit has increased from BDT 6.1 billion to BDT 10.8 billion, even after having very high provision. Our profit for subsidiaries, especially in capital market has decreased from City Brokerage profit has decreased from BDT 61 million to BDT 58 million. Our merchant bank's profit has decreased from BDT 152 million to BDT 90 million. And money transfer our -- we have exchange house in Malaysia, which has -- the property level is almost remained same, a little bit decline. And we also have a finance company in Hong Kong. Their profitability also decreased because of the -- also some dollar and rate issues. But the thing is the main challenge from the subsidiaries that has come from the capital market, for their investment, we had to incur BDT 883 million of provision in our consolidated accounts. So with this additional provision, our consolidated profit actually still crossed, for the first time, BDT 10 billion milestone. So last year, 2023's profit after tax was BDT 6.3 billion, which has increased to BDT 10.1 billion because of the higher operating profit and higher revenue. So again, just I'm reiterating that this is highest ever profit for the City Bank as a group. So here, you can see the last few slides where we are showing the return on equity. We are showing the return on equity on a solo basis as well as consolidated basis. On a solo basis, you will see that our return on equity has increased from 17.6% to 26.1%. But based on consolidated, our return has increased to 23.9% because we had to make actually provision for subsidiaries. But if capital market actually come back to a normal situation, then you can actually estimate that how much the return on equity will be on a consolidated basis because then we'll add actually more profit from the subsidiary, that we cannot do -- could not do in last year. Also, return on equity, the same. It has increased from 1.2% to 1.7%, but on a consolidated basis, it is 1.6%. We have already declared dividend and it will be approved in the next AGM. This -- for 2024, we have declared 12.5% stock dividend and 12.5% cash dividend. The rate is overall 25%. In 2023 also, the overall rate was 25%. Then earnings per share. Again, it increased to BDT 8.06 on a solo basis. So bank earned actually BDT 8.06 earnings per share, which on a consolidated basis, it is BDT 7.5. But again, if we have proper functioning good capital market, our -- it's very easy to say that earnings per share on a consolidated basis will be higher than the solo basis. So the NAV is also around BDT 35, which was around BDT 28 in 2023. Capital adequacy ratio on a solo basis is around 16%, on a consolidated basis is 15.3%. So it is a very strong -- we are holding very strong capital base. This will ensure the growth in coming days. These are the few, actually, regulation that has a significant impact in the banking industry, especially the change in loan classification regulation. And also, we are going to have IFRS -- implementation of IFRS 9 by 2027. So Central Bank has given a road map. So this will give a better governance for the bank in coming years. So now actually, we have a few slides for the -- for a very important area, that is the sustainable finance. So City Bank is very much actually strategic -- this is one of the very strategic intention of the bank to become very strong in sustainable financing area. So I'd like to request our CRO, Mr. Firoz, to explain these few slides about the sustainability finance.

Thank you, Mahbub bey. Good afternoon. As you know, sustainability is an important part of our core value and business practice. We integrate environmental and social consideration across both our lending portfolio as well as our internal operation. Let's see our key achievement in sustainable finance. We -- see, the last year, our sustainable finance disbursement growth was 167%. In amount, it was about BDT 400 billion in total disbursement. And previously, it was BDT 91 billion. And against which it was BDT 400 billion against our total requirement of BDT 91 billion. Similarly, in green finance disbursement, growth was 200%, and in taka, it was BDT 33 billion against the requirement of BDT 5 billion. In percentage, if we consider that our achievement was 34% of total term loan disbursement against Bangladesh bank target of 5%. We are also working on green liability product, which is the new in the industry. Last year, we launched innovative green savings account in February '24. The key features of this savings account was the total -- this deposit amount will be financed in green and sustainable project. At the same time, for every account, we plant one tree. You also know, City Bank started its sustainability journey more than a decade ago. In addition to financing green and sustainable initiatives, we are very much focused on our internal ESG practice. Key in-house initiatives, including City Bank is the first bank in Bangladesh to join in the Net-Zero Banking Alliance in United Nations. Also, City Bank takes some initiatives to reduce their carbon emission. As part of that, we installed solar panel in our 38 branches and sub-branches. Also, we have 33 solar powered our ATM and 19 solar powered as an outlet. Also, if we see some key highlights about the green financing, we disbursed last year BDT 2 billion in the renewable energy project for financing of the 100 megawatt of solar power plant and 60 megawatts for the wind power plant. And also we financed BDT 9 billion in energy resource and efficiency machineries and BDT 6 billion in LEED green-certified client. And also, we take some initiatives for financing in the waste management and circular economy. In last year, we financed in couple of project in waste management under our small business and medium business. Nex slide. Our effort in sustainability have not gone unnoticed, and our work has been recognized in both nationally and internationally, and key achievements include City Bank was the top sustainable bank for the last 4 years in a row by Bangladesh Bank. And also, we recognized -- City Bank is recognized as Climate Focused Bank by USAID, Greentech Foundation and Dhaka University. City Bank also ranked top 10 sustainable bank by Sustainability Magazine of U.K. and also ranked 7 best bank in Asia Pacific by the Banker magazine for sustainable revenue ratio. To learn our sustainability initiative and progress, you can scan our QR code to access the GRI standard sustainability report of 2023. And we are also in process of preparing the sustainable report for 2024 that will be also uploaded in our website. That's all related to the sustainability. Thank you.

Okay. Thank you, Firoz. And this is kind of the last slide from me. Not only just business or sustainability financing, we are -- our key asset for the bank is the employee. And for that, actually, we have launched many programs, and among them is we have launched employee value proposition, and which will create a future banker and future leader for the bank, who will ensure the real sustainability of the bank. So I'll not actually explain line by line, but this is also a unique initiative in the banking industry, which will definitely give a very good result in future. So -- and then there are some -- we are sharing some picture about various rewards that we have received in 2024. I'm not going into detail. So with that, I'd like to actually end my presentation. So I'd like to request Saima to conduct the rest of the program. Thank you.

Thank you very much, sir, for your enlightening financial performance presentation. Ladies and gentlemen, it is my great pleasure to call upon Mr. Mashrur Arefin, Managing Director and CEO of City Bank PLC, to speak about the views and forward-looking strategies of the bank.

Thank you, Saima, and thank you, Mahbub, our CFO. Thank you, Firoz, our Chief Risk Officer. Yes, we had a very good year, I believe the best year ever. The result is very clearly have been presented by Mahbub. I'm really proud. I'm thankful to you for your support. If you ask me to summarize why I said that it has been the best year, the revenue, basically, income grew last year by 43%, whereas expenses grew by 17% -- 16.5%, meaning we earned much more than we have spent. So whole industry also came to know that we entered one of those -- as one of those 4 banks the first time in our history as a local private commercial bank, conventional bank, first time we entered in the operating profit area. We entered $200 million, which is BDT 2,000 crores. Roughly, I'm calculating BDT 100, $1, keeping that in mind. We entered that territory that is very much proud moment for us. It's a new area for a few of those banks, Dutch-Bangla, City, BRAC and Pubali, last year, we entered that. We ended the year with an operating profit of BDT 2,351 crores, which is around USD 235 million -- USD 230 million. So operating profit automatically grew by around 70%, but I thank all the business units who took care of the income. And income came from -- the interest income was good. Fee commission income, as Mahbub mentioned, there was a good amount of fee commission income. There was huge growth around USD 1.3 billion worth of BDT growth in low-cost deposit last year. So that was also phenomenal that when -- at a time when people were shying away from Bangladeshi banks, City Bank's deposit net grew by around USD 1.3 billion equivalent BDT. So -- but with that, it's not that the cost of deposit, we lost control over the cost of deposit. Cost of deposit grew only 1.2%, but at the same time, our yield on advance also grew, meaning we perfectly gave a balance to the extra cost that came in the form of paying to the depositors. So our overall spread, our overall spread was maintained at 5% last year. Right, Mahbub, it was 5%?

Yes, yes, absolutely.

Yes. Yield on advance was 9.8% and cost of deposit was kept below 5% at 4.8%. So overall, we earned 5% interest income. At the same time, investment income was also good, but it's not that City Bank earned only from investing into government treasury bill and bonds, though that is the case -- that was the case with many banks in the country. But if you seriously analyze our profit and loss account, you will see that only 19% of bank's total income came from treasury bill/bond investments. 76% came from core banking activities, which basically means interest income, fees income, and commission income from trade business. So overall, with that kind of operating income, first time Bangladesh saw 4 banks entering $200 million territory. From that, it was always a hope for us that after taking adequate provision against the stress book and bad debts, we will be able to maintain a profit after tax of over BDT 1,000 crore, which is roughly USD 100 million. And we successfully did that, and that showed a profit after tax growth of 58.9%. So a big thank you to all of you, the investors, the well-wishers of City Banks, to the regulators, the developers of our -- to the developers whose softwares we use, to our other stakeholders, our subsidiaries and everyone. 58.9% growth in after-tax profit, which took us on a consolidated basis to BDT 1,014 crores, and on a solo basis, actually, the bank earned much more than that. BDT 1,085 crores we earned on solo basis. But due to the certain provisions that had to be taken due to certain losses in market exposures in City Brokerage and City capital, we lost BDT 71 crore or USD 7 million worth of profit after tax. But that's okay, we're still only 2 banks above BDT 1,000 crore mark in terms of profit after tax, BRAC Bank and City Bank, only 2 banks. And these 2 banks is the first 2 banks in Bangladesh's history as conventional 2 banks which have crossed BDT 1,000 crore mark in profit after tax. Like, the way 4 of us crossed 2,000 crore mark in the operating profit line and 2 from them could not make it because of the provision requirement mainly, but City and BRAC did it. I'm very happy. I also want other -- many other good banks around us. Because then it's an overall better banking environment. So I want more of the BRAC Bank kind of banks, more of the Dutch-Bangla, Pubali kind of banks around us, the top players in the market, which -- because we are -- end of the day, ultimately, it's not about only doing good ourselves. It's also about building an economy, building a banking industry where it is safe to do different activities, money market plus many other activities in other banks. So I do look forward to a better banking industry, and that is in the making now under the leadership of Dr. Ahsan H. Mansur, ex-IMF official, who is now the Governor of the Central Bank. A lot of reforms are underway. A lot of reforms are underway, including governance side reforms and new banking company acts are coming very soon. Plus, also the resolution ordinance is coming, which is basically how do we tackle with the low -- with those 12, 13 banks, which are all now facing huge amount of write-downs because of the malpractices that went rampantly in those banks. You all know about those, and there has been a regime change after that. So now reforms are very much in the agenda. We are part of that. We are a big bank with a lot of international exposure, and also a lot of taka exposures, huge. So we need your blessings. I would like to say, you are the -- mainly here, who are listening to me are mainly our shareholders and our investors. So ROE-wise, you basically carry about what is the return on the equity, on shareholders' equity, and this is where we have actually made a history in Bangladesh. Last year, on a solo basis, if you look at the last quarter result, meaning last year result, we have offered a solo basis equity ROE of 26.1%. And on a consolidated basis with the losses of BDT 71 crores that I took due to the loss of 2 subsidiaries, on that basis also, we have offered a 23.9% return on equity. And no bank, no bank meaning no bank, n-o, no, no bank could even come near us in terms of ROE. So meaning it's a very, very, very, very good place. We are happy that we could create happy shareholders. And I'm happy that after the declaration of dividends, both in the form of cash and stock, we have very solid capital plan, capital adequacy plan. I'm happy that we'll still be in the range of 15% capital adequacy even after giving these dividends paying out this, because we have -- first quarter has not gone too well and at the same time, not too bad either, because the industry is going through a real turbulent phase, a real turmoil time is going on. There is liquidity pressure, and there is also NPL-related kind of new developments because -- which is -- some of it is connected to regime change and some of it is connected to other external factors. So that's the reason I cannot say that first quarter has gone too well, neither can I say that it has gone too bad. But I can say that overall, another 3 -- almost 8 months left, City, we have a big income-generating machine we have already built, so we cannot be doing bad. So it is going to be a good year, again, with a special focus on 2 of the digital projects: one, we call Great Wall, which we'll ultimately see City Bank launching digital bank, and one is Project K2, which is -- we are coming up with an AI-powered machine learning and big data analytics-powered new Citytouch. By the end of this year, both will be happening. At the same time, we are geographically progressing to catch or to lure into us the businesses of certain big economies of the country -- sorry, of the world. Like, our initial focus is Japan, China, Japan, Middle East, these are our focus areas. China especially, geopolitically also Bangladesh is moving towards that. They are a big partner of ours. So this is also another strategic intent. Another strategic intent is to do -- is to become the bank for bancassurance insurance products for the entire country's population. So bancassurance is also another big focus of ours. And in this year, the fifth biggest focus is opening of small and medium segment letter of credit, LCs, to support the economy, to support the small traders and which also will kind of -- which also will reinforce our commitment to really grow in the retail and small and credit card sector. Recently, we have just launched a metal American Express card for the echelon of the society. But on the credit card side also, we'll be going into that segment, low-income group. And at the same time, just looking into the way bad debt scenario is unfolding, our growth will be -- of course, will be there in the corporate, commercial, medium segment, but it will be only with very good customers. I welcome our new Head of Wholesale Banking, Mesbaul Asif Siddiqui, who I will request to raise hand. He is there very much. He's new Head of Wholesale Banking of the Bank, corporate bank, and also corporate deposit side, which we call cash management. Now they have institutional liability, a new name. So these 2 areas and offshore banking units are all now comes under Asif, who was the erstwhile CRO of this institution. He's the Deputy Managing Director. So the focus in those big ticket lendings will be there if those are really good customers, globally reported customers or local top customers with clean record and all that. And we are also waiting the political stability to come, which is provisionally there now, and this is okay. We are actually happy that banking sector is much more transparent and much more discipline, and governance has come to the sector, which gives us the courage to do banking more courageously. So that's where I will stop with this saying that 2 digital projects are going on, one, China-based focus related strategy is unfolding, and growth areas of lending have been clearly identified, retail card and small. And I have also said that the trade will be a big focus. We're aiming for a double-digit growth in the trade business export, import together. Last year, it was [ $7.3 billion ]. This year, we hope to take it to [ $10 billion ]. But it may not be easy because the dollar -- Mahbub, explained that export is stable, remittance has seen all-time high growth and all that, but still there is still pressure on the dollar because interbank market is still not really active. So still, I can end it with a note of really high hope. This bank is a bank which produced, first time in our history, 26% return on equity. And if you look at the return on asset also, NPL ratio also, we are going towards reaching the global class level in all areas of banking that we call. Thank you all. Thank you.

Thank you, sir, for your eloquent words. Ladies and gentlemen, we have now reached our Q&A session.

The first question is, what is City Bank's strategy for reducing the cost of fund?

The strategy is to focus, be more popular, to be more an address for the CASA, current and savings account holders. So this is also tied to the 2 digital projects we are running. The answer lies there.

The next question is, do you see a rise in NPL in the coming days considering the ecopolitical situation and new loan classification rolled out?

Yes. The new loan classification has already contributed some growth in NPL. So that is one element why NPLs grew across the industry. Another is that a lot of businesses have certain connection with the last regime. That's another reason. Another reason is that overall economic slowdown, I wouldn't say, but of course, slowdown. If you look at the GDP projections and all, Bangladesh is going through a reform phase. So in this phase, before -- it is like the plane is on the runway taxiing. So before it takes off, there will be this period of a little bit of consolidation and also slowdown in sales in certain areas. Plus, dollar crisis has not yet evaporated. As I said, that interbank market is not yet active. All of these factors together, in addition to the new CL policy coming into play, these are also reasons why NPLs will see a little bit of growth. But we need to manage. We need to manage. Central Bank is helping us very much by forming a task force, whereas -- where commercial bank, Central Bank and business people are sitting together and sorting out the pressure on loan repayment.

Moving on to the last question of this session. We know that there is a gas prices as a result in -- we know that there is a gas prices in the textile industry in a challenging time. How much is the City Bank's loan position in the textile sector?

Asif?

Yes. Actually, this gas is most -- not with the entire -- the textile and apparel or RMG sector that we say. It depends on the dying and the spinning side, so that portion. So we -- altogether, garments, which we also call apparel and the spinning textile, altogether, we have 22% of our asset portfolio exposure. Out of that, actually, less than half or around 7% to 8% is the spinning and the textile. Most of them actually is not hit heavily by this gas crisis because alternative solution they have found, so they managed to continue their production. So that actually also reflected in our asset quality. Repayments are still good. Our customer base is one of the key success factor of we doing well in 2024, keeping the NPL ratio below [ indiscernible ] despite having so many economic, well, I would not say crisis, it's rather a crunch and also the pressure from -- the dollar pressure, flood issues last year, altogether -- actually, we could do well because the customer we have selected is in the best of the class that has been built in decades. So it's a success from a cumulative prudent decision that the management and the team has been done. We're proud of the team that [Audio Gap] and the customer base that we have.

Ladies and gentlemen, we have reached the end of today's earnings disclosure event. Thank you all for your participation and patience. Before concluding, let me inform you that the recorded version of the entire event will be made available in the same web link as for the live program very shortly. Those of you who missed the live event or want to skim through it at a later time, you'll find the whole event documented there. The financial presentation will also be available in City Bank's website under the Investor Relations section. We appreciate your participation and patience. Thank you again for your interest in City Bank PLC. Goodbye. Stay safe and stay well. Thank you.