United Commercial Bank PLC (UCB) is seeking to turn its balance-sheet recovery into a new phase of growth by strengthening capital, improving asset quality and making greater use of its expanding customer base, nationwide network and established banking operations.
The first-generation private commercial bank is pursuing a Tk775 crore rights issue, an Tk800 crore subordinated bond programme and a planned Tk775 crore strategic equity investment as part of a Tk2,350 crore capital strengthening plan.
The capital push follows significant improvements in deposits, liquidity management, customer acquisition and loan recovery since 2024, after it suffered a surge in non-performing loans (NPLs).
At a capital market stakeholders’ meeting organised by UCB Investment Limited and Rupali Investment Limited in Dhaka on Wednesday, participants discussed the bank’s rights issue, capital position and broader turnaround journey.
The turnaround
UCB’s recovery has been led by a sharp improvement in its funding position.
The bank’s deposits increased 34.4 per cent to Tk74,514 crore in June 2026 from Tk55,422 crore in December 2024.
Its deposit growth in 2025 was 23.4 per cent, compared with 11.1 per cent across the banking sector. Retail customers account for 60 per cent of deposits, while corporate customers contribute 32 per cent and SMEs 8 per cent.
The bank’s largest depositor accounts for no more than 1.35 per cent of total deposits, reducing dependence on a small number of large customers.
At the same time, UCB has maintained cautious loan growth. Its loan portfolio increased to Tk65,433 crore in June 2026 from Tk57,283 crore in December 2024, a rise of 14.2 per cent, while deposits grew much faster.
The slower loan expansion helped improve liquidity, with the Advance-to-Deposit Ratio (ADR) declining to 82.11 per cent in June 2026 from a peak of around 95 per cent in the fourth quarter of 2024.
UCB now wants to use this stronger funding position as a base for future growth, its officials said.
The bank has around 30 lakh accounts, including about 10 lakh opened since September 2024. Around 3.5 lakh accounts were added in the first half of 2026, including more than 1.75 lakh current and savings accounts, helping reduce the cost of funds.
Its nationwide network includes 236 branches, 197 sub-branches, 710 ATMs and CRMs and 633 agent outlets, creating 1,776 customer touchpoints.
The network gives UCB opportunities to expand retail banking, SME financing, remittance services and digital financial products.
The bank also operates through UCB Stock Brokerage Limited, UCB Investment Limited, UCB Asset Management Limited and digital financial services platform upay, giving the group businesses across banking, brokerage, investment banking, asset management and digital finance.
Foreign trade is another major strength. UCB said it handles around $7 billion in foreign trade annually, equivalent to about 7 per cent of Bangladesh’s total foreign trade.
A stronger capital position could allow the bank to expand trade finance, letters of credit, guarantees and other international banking activities.
Remittance is also emerging as a growth area. UCB received $513 million in remittances during the first half of 2026, already exceeding the $491 million received throughout 2025.
Capital and bad loans remain the test
Despite improvements in funding and liquidity, UCB’s biggest challenge remains asset quality.
The bank’s NPL ratio rose from 5.50 per cent in the fourth quarter of 2023 to a peak of 18.91 per cent in the second quarter of 2025. Although it later declined, the ratio remained high at 16.27 per cent in the second quarter of 2026.
The bank has increased recovery efforts to address the problem. It is also pursuing previous directors-linked borrowers to recover money.
Total loan recovery increased to Tk1,534 crore in 2025 from Tk615 crore in 2024, while recovery reached Tk649 crore in the first half of 2026.
Recovery from written-off loans increased to Tk114 crore in 2025 from Tk37 crore a year earlier, with another Tk61 crore recovered in the first half of 2026.
Legal action has also accelerated. UCB settled 317 cases in the first half of 2026, exceeding the 316 cases settled during the whole of 2025.
Capital strengthening is now central to the bank’s next phase.
UCB said its roadmap could raise its Capital Adequacy Ratio to 14.24 per cent by the end of 2026 from 8.42 per cent if implemented successfully. The Basel III minimum requirement for banks is 12.50 per cent.
UCB Chairman Sharif Zahir, in an interview with TIMES earlier this year, said that after successful issuance of rights shares, the bank eyes foreign strategic equity partners, which could be game-changing for the bank with its strong legacy.
Its subsidiaries — mobile financial service operator upay, brokerage UCB Stock Brokerage, investment management services arm UCB Asset Management and merchant bank UCB Investment Limited — add to its consolidated strength, as each of the capital market subsidiaries is among the top-tier players.
