Staff Correspondent:

Sonali Bangladesh UK Limited (SBUK) has distributed a £2 million dividend to its shareholders in Bangladesh – the Ministry of Finance and Sonali Bank – based on their respective equity holdings of 51% and 49%.

The dividend payout underscores the institution’s financial stability, strategic realignment, dedication to Bangladesh, and remarkable resurgence following regulatory challenges.

On 13 February, SBUK Chairperson Md Ashadul Islam met with representatives from both shareholders – Sonali Bank Chairperson Md Muslim Chowdhury and Financial Institutions Division Secretary Nazma Mobarek – to officially confirm that the dividends had been credited to their accounts.

Md Shawkat Ali Khan, CEO and MD of Sonali Bank, Masum Billah, CEO of SBUK, and other key officials from the finance ministry, including Md Azimuddin Biswas, additional secretary (Central and Commercial Bank Wing) of the FID, and Sheikh Farid, joint secretary (State-Owned Commercial Bank Branch), were also present at the meeting held at the FID.

The representatives from SBUK discussed past regulatory challenges, including the key reasons behind the loss of its banking license and its shareholding structure.

At the meeting, they also explored the way forward for SBUK, including the possibility of regaining its banking status and enhancing future collaboration.

SBUK Chairperson Md Ashadul Islam also met Finance Adviser Salehuddin Ahmed to outline SBUK’s strategic vision and prospects as a full-fledged bank in the UK.

JOURNEY OF SONALI BANGLADESH UK LIMITED

Established in 1973 to serve the Bangladeshi diaspora in the UK, the institution originally functioned as a full-service bank, providing retail banking, trade finance, and remittance services. However, following regulatory challenges and operational irregularities, its foreign branch license was revoked in 1999, resulting in its reformation as Sonali Trade & Finance UK Limited.

In 2001, Sonali Bank (UK) Ltd began operations under a new banking license issued by the Financial Services Authority (FSA), with the Finance Ministry holding 51% and Sonali Bank 49% ownership.

However, SBUK faced significant regulatory challenges, including a £3.25 million fine from the Financial Conduct Authority (FCA), which replaced the FSA, in 2016 for deficiencies in its anti-money laundering (AML) framework.

Regulatory scrutiny led to a temporary ban on new deposits and placement on the FCA AML Watchlist. Extensive remediation, including a £33.47 million capital injection, resulted in the institution’s removal from the watchlist in 2018.

However, ongoing challenges culminated in the revocation of its banking license by the Prudential Regulation Authority (PRA) in 2022.

With a focus on innovation and regulatory readiness, SBUK is set to expand its global footprint and enhance economic ties between Bangladesh and the UK.

SBUK has partnered with PwC under Project Phoenix to strengthen compliance and risk management.

STRATEGIC TRANSITION, FINANCIAL SUCCESS

Amid regulatory changes, SBUK launched Project Phoenix, transitioning into a Non-Bank Financial Institution (NBFI) focused on Trade Finance and Financial Institution services. This transformation was officially completed in August 2022 with the revocation of its banking license and rebranding as Sonali Bangladesh UK Limited.

Since then, SBUK has experienced significant financial growth. Pre-tax profits surged from £1.5 million in 2022 to £8.0 million in 2023, fueled by strategic realignment, cost efficiencies, and technological advancements. Trade finance revenue exceeded £1 million per month in 2023, contributing to a record £11.74 million in total income – a 106% year-over-year increase.

Meanwhile, operating expenses dropped to £3.77 million, a 4% reduction from budget projections and a 7% annual decline. This financial success enabled SBUK to distribute a £2 million dividend, reaffirming its commitment to shareholder value.