ANNUAL REPORT 2015
TOWARDS A STRATEGIC ROUTE
Towards a strategic route The solidity of our business model is evident in the fact that despite a challenging 2015, marked by low credit offtake, all our business divisions delivered a robust performance in their respective market spaces, leveraging core inherent strengths, facing challenges with resilience and continuing to earn the trust of clients. Embracing a strategic route, Prime Bank embraced business process re-engineering organisation-wide, consolidating the strength of its banking operations to ensure that its products, services and solutions remain relevant across time, anchored on its philosophy of providing sustainable benefits to clients and moving towards its journey of continuous improvement.
01 About Prime Bank 4 5
Brand and Teamwork
Vision & Mission
6
Statement Regarding Forward Looking Approach
11
Our Core Values Ethics, Integrity & Trust and Green Banking
6 7
21 Years of Glorious Journey Group Profile
12 16
Corporate Philosophy & Our Business Model
8
Board of Director’s Profile
19
Letter of Transmittal Notice of the 21st Annual General Meeting
Our Strategic Priorities
9 10
02 Corporate Governance Composition of Board and Committees 28 From the office of the Chairman 30 Managing Director & CEO’s Review 34 Director’s Report 38 Management Discussion 47 Report of the Activities of the Audit Committee 74 Report of the Activities of the Risk Management Committee 76 Report of Prime Bank Shari’ah Supervisory Committee 78 Corporate Governance Report 79
Corporate Management Corporate Organogram Group Corporate Structure CEO/CFO’s Declaration to the Board Report on Risk Management by Chief Risk Officer Risk Management Report Market Discipline Disclosure on Risk Based Capital (Basel-III) Capital Plan Statement of Non-Performing Loan
111 115 116 117 118 120 132 153 155
03 Other Information Awards and Recognition Media Highlights Products and Services Sustainability Report
160 165 166 174
Prime Bank Foundation (Corporate Social Responsibility) 176 Prime Bank Cricket Club 204 Green Banking Report 206 Employee Report 211
04 Shareholders’ Information Shareholders’ Information (a) Distribution of Shareholdings in 2015
215 216
Statement of Value Added and its Distribution Economic Value Added Statement
237 238
(b) Shares held by Directors in 2015 (c) Redressal of Investors Complaint Financial Highlights-Group & PBL Financial Highlights-PBL Graphical Presentation-PBL Stock Performance - Market Price Information Segment Analysis Horizontal/Vertical Analysis-Key Financial Data & Key Ratios-PBL
216 217 218 219 220 224 225
Economic Impact Report Maintaining Capital Adequacy Maintaining Liquidity Payment of Dividends Market Value Added Statement Disclosure for Non Performing Assets Financial Calendar 2015 Glimpses of 20th AGM
239 239 241 241 241 242 243 244
226
05 Financial Statements Independent Auditor’s Report to the Shareholders
246
Financial Statements - OBU
355
Consolidated Balance Sheet
248
Financial Statements - PBIL
365
Consolidated Profit and Loss Account Consolidated Cash Flow Statement
250 252
Financial Statements - PBSL Financial Statements - PECL, Singapore
371 377
Consolidated Statement of Changes in Equity
254
Financial Statements - PBL Exchange (UK) Ltd.
383
Balance Sheet of PBL
255
Financial Statements - PBL Finance (Hong Kong) Ltd.
388
Profit and Loss Account
257
Financial Statements - PBL Foundation
393
Cash Flow Statement
259
Some PBL Activities during 2015
399
Statement of Changed in Equity Notes to the Financial Statements
261 262
Branch Network List of Abbreviations
402 408
TABLE OF CONTENTS
About Prime Bank
PRIME BANK A N N UA L R E P O RT 2 0 1 5
LETTER OF TRANSMITTAL
All Shareholders, Bangladesh Bank, Bangladesh Securities and Exchange Commission, Registrar of Joint Stock Companies & Firms, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited
Dear Sir(s), Annual Report of Prime Bank Limited for year ended December 31, 2015.
Enclosed please find a copy of the Annual Report of Prime Bank Limited along with the Audited Financial Statements at the position of December 31, 2015. The Report includes Income Statements, Cash Flow Statements along with notes thereon of Prime Bank Limited, its Subsidiaries namely Prime Exchange Co. Pte. Limited, Singapore, PBL Exchange (UK) Limited, PBL Finance (Hong Kong) Limited, Prime Bank Investment Limited and Prime Bank Securities Limited. This is for your kind information and record please.
Best regards. Yours sincerely,
Mohammed Ehsan Habib Company Secretary
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
NOTICE OF THE TWENTY-FIRST ANNUAL GENERAL MEETING
Notice is hereby given to all the Members of Prime Bank Limited that the 21st Annual General Meeting of the Company will be held on Tuesday, 26 April 2016 at 10:00 a.m. at the following Venue to transact undernoted businesses:
Venue
KIB Complex, Krishi Khamar Sarak Farmgate, Dhaka-1215
AGENDA
1.
To receive, consider and adopt Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2015 together with the Auditors’ Report thereon.
2.
To declare dividend for the year ended 31st December 2015 as recommended by the Board of Directors.
3.
To elect/re-elect Directors.
4.
To appoint Auditors for the term until the next Annual General Meeting and fixing their remuneration.
By order of the Board of Directors
March 28, 2016
Mohammed Ehsan Habib Company Secretary
Notes: a.
The ‘Record Date’ shall be Monday, April 11, 2016. Shareholders whose names appear in the Members’ Register of the Company and/or in the Depository on the Record Date will be eligible to attend the meeting and qualify for dividend.
b. The Board of Directors has recommended Cash Dividend @15% for the year 2015. c.
A Member eligible to attend and vote at the Annual General Meeting may appoint a proxy on his/her behalf for which duly stamped Proxy Form must be submitted to the Share Department of the Company at least 72 hours before the scheduled Meeting. Proxy Form will be available along with the Annual Report -2015, Bank’s official website and at the Share Department of the Bank.
d. Shareholders and proxies are requested to record their entry in the AGM well in time. e.
Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2015 together with the Auditors’ Report thereon shall be available on bank’s website from 12th April 2016 onwards.
f.
Hon’ble Members are requested to update particulars of their Bank Account and 12 Digit Taxpayer’s Identification Number (e-TIN) through Depository Participants (DP) before the “Record Date”. Members failing to update their e-TIN details before the “Record Date”, Income Tax at source will be deducted from payable Dividend @15% (fifteen percent) instead of @10% (ten percent) as per amended Income Tax Ordinance 1984 under Section # 54.
g. Concerned Brokerage Houses are requested to provide us statement furnishing details i.e. Bank name, Account number & routing number etc. of their margin loan holders who hold Prime Bank’s Shares on the ‘Record Date’ including name of the contact person to the Prime Bank Share Department on or before 17.04.2016 in compliance with relevant BSEC directives.
N.B: No gift or benefit in cash or kind shall be paid/offered to the Shareholders in the 21st AGM as per BSEC Directive No. SEC/CMRRCD/2009-193/154 dated 24.10.2013.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
OUR VISION
OUR CORE VALUES
To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.
DELIVER We deliver high standards for our customers, clients and shareholders. We share a passion for serving the financial needs of people, companies and institutional investors. COMMITMENT We are fully committed to achieving success for our customers, our teams and ourselves through compliance of regulatory guidelines.
OUR MISSION To build Prime Bank Limited into an efficient, market driven, customer focused institution with good corporate governance structure. Continuous improvement of our business policies, procedures and efficiency through integration of technology at all levels.
6
TRUST We have trust in our team. We work together to deliver the full capabilities of our Bank to all of our constituents. We strive to be consistent and straightforward in our interactions. SUCCEED We know we succeed only when our customers, communities and environment succeed. We do business in an open, direct and sustainable way.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
ETHICS, INTEGRITY AND TRUST
Banking deals with public money where Ethics, Integrity and Trust is utmost important. Prime Bank upholds these principles in every section by its management and customer service. The following are the key principles of Employee Codes of Ethics and Business Conduct:
Provide service to customers with uncompromising integrity, utmost respect, unwavering responsibility and dedicated citizenship
Protect privacy and confidentiality of customer information
Prevent money laundering and fraud
Demonstrate workplace respect
GREEN BANKING
The environmental degradation needs to be tackled in a concerted manner by all. Society demands that business also take responsibility in safeguarding the planet. As a responsible Corporate Citizen, Prime Bank reinforced its Green Banking initiatives.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
CORPORATE PHILOSOPHY FOR OUR CUSTOMERS To provide the most courteous and efficient service in every aspect of its business To be innovative in the development of new banking products and services
FOR OUR EMPLOYEES By promoting their well-being through attractive remuneration and fringe benefits By promoting good staff moral through proper staff training and development, and provision of opportunities for career development
FOR OUR SHAREHOLDERS By forging ahead and consolidating its position as a stable and progressive financial institution By generating profits and fair return on their investment
FOR OUR COMMUNITY By assuming our role as a socially responsible corporate citizen in a tangible manner By adhering closely to national policies and objectives thereby contributing towards the progress of the nation By upholding ethical values and best practices Constantly seeking to improve performance by aligning our goals with stakeholders’ expectations, because we value them.
OUR BUSINESS MODEL As a focused Private Commercial Bank, Prime Bank offers an integrated set of products and services across retail banking, wealth management, corporate banking and investment banking. We serve individuals, small and large businesses, corporations, institutions and governments. Prime Bank seeks to satisfy the needs of our customers and clients by offering a well-rounded value proposition – a wide range of products and services – and thereby deliver a smoother income stream and sustainable returns. However, we do not seek to offer all things to all people. Prime Bank’ competitive advantage arises from the scale and diversity of our businesses and the quality, character and relationships of our people. We also undertake activities in selected markets in order to support the needs of customers and clients.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
BRAND PRIME BANK is passionate about continuous
improvement & innovation. this is why we make every effort at being a pioneer in innovating products and
services
to
meet
our customers’ needs, providing a better way of life and preparing them for the
FUTURE.
TEAMWORK •
we work together as a team based on mutual respect and dignity growth
•
we are passionate about constant improvement and innovation excellence and efficiency
•
we are committed to delivering outstanding performance and superior service integrity
•
we are honest, professional and ethical in all our dealings relationship building.
•
we continuously build long-term and mutually beneficial partnerships, our values define what we believe in and what we stand for. These are our essential guiding principles for our hearts and minds, for those situations where the rule book provides no answers. Although our business is complex, we adopt a flexible approach when resolving issues but within the scope of stipulated guidelines. We remain steadfast in honoring our commitments, as we know that fulfilling our promises will build trust and create mutual respect among our stakeholders. Our products and services are a reflection of our belief in doing the right thing. We advice our customers on what we perceive to be in their best interests. This is why we go above and beyond for our customers. We believe our customers receive the best service because of the dedication and commitment of our people. We look to build long-term and mutually beneficial relationships as we endeavor to turn every interaction into a sustainable relationship. This could mean helping a customer start-up his first food stall, to helping his corporation expands beyond the home country. We stand by our customers, through good and tough times, helping to ensure that they have the opportunity to grow at any point. We are honored to have won our customers’ hearts and gained their trust. We remain committed in delivering best-in-class services. By putting people first, each and every day, we are improving Financial Services.
9
About Prime Bank
PRIME BANK A N N UA L R E P O RT 2 0 1 5
OUR STRATEGIC OBJECTIVES
10
Our strategy is centered on assisting our clients operate successfully and being their bank of choice as their business, and even personal, financial needs evolve. To fulfill that promise, our bankers draw on a wide range of financial products and resources to structure creative and innovative solutions that maximize operational efficiency.
Our plan is to do more business with our customers and clients by demonstrating we can deliver on all of their banking and wealth management needs that our customers and clients have with other financial institutions.
We have transformed the Bank into a stronger, more straightforward financial institution that is committed to make financial lives better. Our goal is to build broader, deeper and more enduring relationships with our customers and clients and deliver long-term value for our shareholders.
We’re responding to the financial needs of people and small business owners with better banking and wealth management solutions that simplify their financial lives, deliver value and convenience and make doing business with us clear, straightforward and rewarding.
Maintain adequate level of liquidity through minimizing asset-liability mismatch and recovery of past due loans.
Improvement of deposit mix by maintaining efficient deposit mix, increase share of low cost and no cost deposit in total deposit and increase non-funded business.
Delivering remarkable returns to stakeholders, sustainable performance and exceeding market and shareholder expectations.
Building a corporate culture of equality, trust and team spirit as we remain dedicated to being a socially responsible organization.
Our objectives are to conduct transparent and high quality business operation based on market mechanism within the legal and social framework.
We are committed to our community as a corporate citizen and contributing towards the progress of the nation as our corporate social responsibility.
Our employees are our backbone. We promote their well being through attractive compensation package, promoting staff morale through training and development and career planning.
We strive for fulfillment of our responsibility to the government through paying entire range of taxes and duties and abiding by the other rules.
We are cautious about environment and climatic change and dutiful to make our homeland a green and clean soil.
Promote and encourage on-line banking, e-commerce, e-payments, shared ATMs, POS, mobile payments etc.
Large segments of population and of economic activities still remain unnerved or underserved by financial market. Proactive thrust on fuller financial inclusion is important for rapid poverty eradication with inclusive growth.
Diversification of products and services by introducing IT based innovative products and alternate delivery channels.
CSR is embedded in our governance, is one of the key ways we identify risks and opportunities, and plays a critical role in our business strategy of responsible growth.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
STATEMENT REGARDING FORWARD LOOKING APPROACH
We are at the forefront of helping small and medium-sized businesses in spite of the sluggish economy and position them for growth. We’re increasing our lending to small and medium-sized businesses and extending credit through other innovative approaches.
We are strong supporters of comprehensive regulatory reform. We support many of the steps that have been taken to better protect consumers in the financial services sector. We also have been vigorous in defending shareholder and associate interests. If properly implemented, reform should contribute to future stability of the financial system.
We’re working to build a “fortress balance sheet” by strengthening liquidity, credit reserve positions, asset quality and overall capital levels.
We acknowledge and are acting on the great responsibility for ensuring financial stability that interconnectedness demands. We also share a responsibility of citizenship in the many communities in which we operate and our employees live and work.
Compensation across the financial services industry continues to be a topic in the industry. We have a long-standing payfor-performance philosophy that ties executive performance. In addition, consistent with our compensation principles, our executive compensation program provides a mix of salary, benefits and incentives paid over time.
Environmental sustainability continues to be an issue of critical importance to us and those we serve. We recognize our responsibility to take action to reduce our environmental footprint, while having an opportunity to use our business resources to enable our clients, customers and employees to reduce their own environmental impacts.
Improve the bottom line through enhanced recovery processes. Recovery of NPL will be the Bank’s priority area for emergingmarket, and there is significant room for performance improvement.
Develop innovative risk models on qualitative and quantitative credit data. There is a scarcity of information on creditworthiness in emerging markets, so banks have strong incentives to invest in developing risk models that incorporate both qualitative and quantitative factors.
Emerging-market banks can address the big challenges they face by acting immediately on these four dimensions: running a risk-culture diagnostic across the organization to identify and mitigate hot spots, redesigning end-to-end collections processes, developing more advanced credit-risk models, and reviewing capital-allocation processes.
Continuing to invest in green banking and technology to achieve cost and time efficiency, sustainable development, improve productivity, quality and faster service with ensure of customer satisfaction.
Building up of maximum earning capacity ensuring stakeholders satisfaction complying with relevant laws and regulation.
Continuous development of overall banking services without compromising any unlawful activities.
Growing and diversify the deposit and loans and advance through combined customer expectation.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
21 YEARS OF GLORIOUS JOURNEY
License issued from the Bangladesh Bank as Primary Dealer
Listed with Dhaka Stock Exchange Limited Trading of Shares on Dhaka Stock Exchange Limited Trading of Shares on Chittagong Stock Exchange Limited Dividend declared in the 5th AGM (First after the IPO)
2000
2001
1995 -99
Registered as Merchant Banker with the Securities and Exchange Commission
Memorandum and Articles of Association signed by the Sponsors Incorporation of the Company Certificate of Commencement of Business License issued by Bangladesh Bank License issued for opening the first branch, Motijheel Formal launching of the Bank Commencement of business from the Motijheel Branch Commencement of Islamic banking business from IBB, Dilkusha Initial Public Offerings (IPO) Publication of Prospectus Subscription Opened Subscription Closed
Listed with Chittagong Stock Exchange Limited
12
2003
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Completion of 10 years of Service Agreement with Temenos for Core Banking Software Temenos T24
Fina ncia l Sta tements
2005
Opening of first Off-shore Banking Unit at DEPZ, Savar, Dhaka
2007
2006 2004
Registered as Depository Participant of CDBL Trading of Shares started in Demat Form in Stock Exchanges
Incorporation of Prime Exchange Co. Pte. Ltd., Singapore Prime Exchange Co. Pte. Ltd., Singapore formally started business
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
2008
Launching of ATM
2010
2009
Incorporation of PBIL Incorporation of PBSL Obtained permission for issuance of Rights Share Launching of SMS Banking Ground breaking of Prime Tower
Launching of Internet Banking Opening of first SME Centre Recipient of SAFA Best Bank Award Incorporation of PBL Exchange (UK) Ltd. Obtained Permission for issuance of Subordinated Bond for Tk. 2,500 Million for Basel-II Compliance
Change of Face Value and Market Lot of Shares of PBL Launching of Phone Banking Commencement of business of PBL Finance (Hong Kong) Ltd.
14
2011
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank South Zone becomes the Champion of the Bangladesh Cricket League 2014-2015 Launching of First Business World MasterCard Credit Card in Bangladesh Opening of 145th Branch at Saidpur, Nilphamari Prime Bank Receives Remittance Award Recipient of “15th ICAB National Award for Best Presented Annual Reports-2014”
Launching of JCB Cards in Bangladesh Launching of Premium Banking Service 'Monarch’ Recipient of “14th ICAB National Award for Best Presented Annual Reports 2013” (Category: Private Sector Banks including Co-operative Banks) – 1st Prize Recipient of “14th ICAB National Award for Best Presented Annual Reports 2013” (Category: Corporate Governance Disclosures) – 2nd Runner Up Recipient of SAFA “SAARC Anniversary Awards for Corporate Governance Disclosures 2013” - Winner Recipient of SAFA “Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures 2013” – 2nd Runner Up
Recipient of ICMAB Best Corporate Award-2012 Launching of Prime Bank Nursing Institute Launching for the first time in Bangladesh the JCB Card’s online acquiring service Launching of Islamic Credit Card
2012
2015
2014
2013
Launching of Mobile Banking Launching of Biometric Smart Card-Prime Cash
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
GROUP PROFILE Prime Bank was established in April, 1995 by a group of
trading, lease financing and internet banking. It has achieved
committed and visionary entrepreneurs whom conceived
numerous international awards for excellence and innovation,
an idea of floating a commercial bank with different outlook. Prime Bank is known for its superior service quality, brand
which stand testimony to the high standards it employs in every area of its operations.
image, strong corporate governance and corporate culture.
Prime Bank’s mission of improving financial services is clearly
Committed for excellence, Prime Bank is a top-tier bank
demonstrated through its commitment to ensure easy access
in Bangladesh and reputed among regulators as distinctly
to financing for all, provide fair terms and pricing, advising
‘compliant’ and among customers as agile and responsive
customers based on their needs and being at the heart of
to change. A Bank aligned to its vision, mission, values and strategic priorities. With its network of 145 branches in Bangladesh and history of over 20 years, Prime Bank has developed unique insights into the needs of every customer segment whether retail, SMEs or large corporate and has consistently demonstrated the ability to offer innovative solutions for all. Over the years, Prime Bank
the community. Prime Bank remains steadfast in its efforts to ensure the sustainability of its operations as well as that of the communities it serves. This is not only through efforts to finance economic development and the provision of modern financial services but also through innovative community program that impact the lives of the marginalized members of the society. Prime Bank Foundation, its healthcare and educational arm
has built on its expertise in a wide area of financial services and today its range of services includes corporate & institutional banking, commercial banking, investment banking, merchant banking, Islamic banking, offshore banking, securities
to undertake Corporate Social Responsibility initiatives, is supported by sponsors and remains a major vehicle for the Bank to positively impact many of most needy communities in an effort to build a better tomorrow for all.
Share Capital: Amount in million 2015
2014
Authorized Capital
Share Capital
25,000.00
25,000.00
Paid-up Capital
10,293.49
10,293.49
Ownership Information:
2015
2014 Sponsors
21.92%
25.31%
Financial Institutions 1.37% 0.39% 0.37% 0.29%
Foreign Investors
39.36%
Non-resident Bangladeshi % 40.53% 34.67%
35.79%
General Public
Deposit and other liabilities: Amount in million Particulars Bank deposit Customer deposit Total
16
2015
2014
643.32
3,269.11
194,181.78
201,568.62
194,825.10
204,837.73
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Loans and advance/Investment: Amount in million Particulars
2015
Corporate
2014
118,369.75
113,627.33
SME
17,821.21
20,054,.79
Retail
14,551.07
12,552.79
Card
1,122.50
1,131.74
Total
151,864.53
147,366.65
Capital to risk weighted asset ratio: Particulars
2015
2014
Solo
Consolidated
Solo
Consolidated
Tier-I Capital
10.00%
9.96%
10.48%
10.45%
Tier-II Capital
2.74%
2.73%
2.23%
2.23%
2015
2014
Long-Term
AA
AA
Short-Time
ST-2
ST-2
Rating Information: Particulars
Human Resources: Gender Male Female Total
2015
2014
2,299
2,265
635
602
2,934
2,867
Information about the Bank: Organization Prime Bank Limited
DSE
CSE
27.03.2000
15.11.1999
Corporate Office Address:
Share Division of the Bank:
Prime Bank Limited 119/120 Adamjee Court Annex Building-2 Motijheel C/A, Dhaka-1000
Sarker Mansion (8th floor) 29, Rajuk Avenue Motijheel C/A, Dhaka-1000
Subsidiaries Information of the Bank: Inside Bangladesh Prime Bank Investment Limited Peoples Insurance Building (11th floor) 36, Dilkusha, Dhaka-1000
Prime Bank Securities Limited Sarker Mansion (3rd floor) 29, Rajuk Avenue, Dhaka-1000
Outside Bangladesh Prime Exchange Co. PTE Ltd (Singapore) 2A Desr Road, (2nd floor) Singapore 209549
PBL Exchange (UK) Limited 16 Brick Lane, London, EI6RF
PBL Finance (Hong Kong) Limited Suit 1407,14/F, Admiralty Centre, Tower-1, 18 Harcourt Road, Hong Kong
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Auditors of the Bank ACNABIN
Syful Shamsul Alam & Co.,
Chartered Accountants
Chartered Accountants
BDBL Bhaban (Level 13 & 14) 12, Kawran Bazar C/A
Paramount Heights, (Level-6) 65/2/1 Box Culvert Road,
Dhaka-1215
Purana Paltan, Dhaka-1000
E-mail-acnabin@bangla.net
E-mail-ssac@ssacbd.com
Tax adviser of the Bank K.M. Hasan & Co., Chartered Accountants Hometown Apartment (8th, 9th & 13th floor) 87, New Eskaton Road Dhaka-1000
Our Strategic Priorities Sustainable business growth, dynamic and talented human capital driven by values, excellent risk management, and involvement of mid-level management in decision-making process will surely command some key strength for Prime Bank. We believe that, as long as we adhere to the right development strategy, take pro-active actions and forge ahead determinedly, 2016 will be full of hopes and harvests. Few of the major tactical and strategic moves that have been chalked out to drive for the current year are: Diversify loan portfolio to avoid excessive concentration to particular sectors as well as to invest funds in the productive sectors. Grow business in SME and Retail portfolio at least by 30%. Implement Economic Capital Framework to derisk the Balance Sheet for the potential associated unexpected losses. Greater emphasis to serve unbanked and under-banked population of the country. Allocation of capital through customer account review and transaction analysis upon determination of Risk Adjusted Return on Capital. Strengthen Information Technology to ensure security of technology and enable safer banking service to customers. Monitor and strengthen recovery drive to bring down the NPL below 5% to maintain asset quality at standard level. Formation of Corporate and Institutional and Commercial banking Teams to provide priority service to our valued customers to ensure better services with maximum satisfaction for more business.
Our Commitments PBL is committed to deliver value to its stakeholders. PBL will continue to provide effective and competitive financials solutions and services to its customers. It will continue to enhance the shareholders’ value through consistent financial performance and efficient capital management. PBL will foster a strong performance and learning culture that allows the development and talents of its employees so that they can effectively play the role of PBL Brand Ambassador.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
PROFILE OF BOARD OF DIRECTORS’ Mr. Azam J. Chowdhury is an elite industrialist and entrepreneur in Bangladesh. He is the current Chairman of the Board of Directors of Prime Bank Ltd. He was the Chairman of the Board on three previous occasions as well. Mr. Chowdhury is the Chairman of East Coast Group (ECG), a diversified conglomerate focusing Energy business for more than three decades. In addition, he is the Chairman of The Consolidated Tea & Lands Company Bangladesh Limited (formerly, James Finlay Limited) and Bangladesh Trade Syndicate Limited, an associate of TNT Global Express Company. Mr. Chowdhury is the Managing Director of MJL Bangladesh Limited, a listed company and an alliance partner of Exxon Mobil Corporation, USA.He is the Director of Omera Petroleum Ltd. (OPL), the largest operator in the LPG sector of Bangladesh. He is also the Director of Omera Cylinders Ltd. and Omera Fuels Ltd. Mr. Azam J Chowdhury is the President of Bangladesh Energy Companies Association (BECA) and a Member of Advisory Council of the Government, People’s Republic of Bangladesh on Power, Energy & Mineral Resources. He is also the President of Bangladesh Ocean Going Ship Owner’s Association (BOGSOA). In the past Mr. Chowdhury also served as the Chairman of Green Delta Insurance Company Limited (2001-2005), one of the most successful general insurance companies in Bangladesh. He is also the Director of Central Depository Bangladesh Limited (CDBL).
Azam J Chowdhury Chairman
In recognition to his performance, The Hungarian Government nominated him as the Honorary Consul of Hungary in Bangladesh. He is a renowned Golfer and achieved laurels several times in this sporting arena.
Khandker Mohammad Khaled, former Chairman and present Vice Chairman is a BUET graduate in Mechanical Engineering. After graduation he joined the then Water & Power Development Authority (WAPDA), now Bangladesh Water Development Board (BWDB). After having served BWDB for thirteen years, he started his own business in 1975 establishing Greenland Engineers & Tractors Company Limited better known as (GETCO). He is currently Chairman & Managing Director of GETCO Telecommunications Limited, GETCO Agro Vision Limited and GETCO Limited. He is also Vice- Chairman and Member, Board of Governors, Primeasia University. Besides, he is associated with numerous Chamber Bodies and Societies in different capacities, prominent among which are Institute of Engineers, Bangladesh, National Heart Foundation of Bangladesh, Diabetic Association of Bangladesh, AMCHAM, Bangladesh, Bangladesh Railway Spares and Accessories Suppliers’ Association, International WHO’s WHO Historical Society and 62-Engineers’ Club.
Khandker Mohammad Khaled Vice Chairman
Mr. Khaled is an amiable personality continuously contributing for the development of social and educational sector of the country. Mr. Khaled is currently Member of the Audit Committee and Risk Management Committee of the Board of Directors of Prime Bank Limited.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Mr. M. A. Khaleque is the founder, Sponsor Director, and incumbent Vice Chairman of the Board of Directors of Prime Bank Limited. During the last 29 years, he has set an enviable standard by establishing high end institutions ranging from banks, non-banks, life and general insurance in the country. Mr. Khaleque’s name has now become synonymous with some of the finest institutions having high professional outlook and vision in the nation. Spanning over a period of around 25 years, success came as a matter of choice through Prime Finance & Investment Ltd, Fareast Islami Life Insurance Company Ltd., Prime Insurance Ltd., Fareast Finance & Investment Ltd., Prime Shops & Loves Ltd., Primeasia Textile Ltd., PFI Securities Ltd., Fareast Stocks and Bonds Ltd., Prime Islami Securities Ltd., Prime Prudential Fund Ltd., Prime Financial Securities Ltd. some of which are market leaders in their respective fields. Having set epoch making standards in the financial arena, he set his sight into the emerging information technology, booming property sector and promising
M. A. Khaleque Vice Chairman
Agrobased sector of the country and his dreams were fulfilled through promotion of GETCO Limited / GETCO Agrovision Ltd., GETCO Telecommunications Ltd., HRC Technologies Ltd., Prime Property Holdings Limited and PFI Properties Ltd. He is a member of the Board of Governors, Primeasia University. His social contribution came through his foundation under the umbrella of MAK Foundation through establishment of a good number of educational institutions such as University, Degree College, Technical College, Krishi College, High School, Girls’ High School, Kindergartens and Madrasahs imparting quality education in the society. He is actively involved with SEBA, a benevolent organization in Bangladesh.
Quazi Sirazul Islam, a Sponsor Director & former Chairman is current Chairman of the Executive Committee of the Board. A freedom fighter and elected Member of Parliament in 1996 and 2001, Mr. Islam is the Managing Director of renowned Jewellery House, Amin Jewellers Limited. He is the Chief Advisor of Sonar Bangla Insurance Limited, Member of Gulshan Club Limited and Chairman of the City Hospital (Burn Hospital), the only Private Sector Hospital of such kind in Bangladesh. A philanthropist by nature, Mr. Islam was awarded Kabi Jasimuddin Gold Medal, Maulana Akram Khan Gold Medal, Sufi Motahar Hossain Gold Medal and Atish Dipankar Gold Medal for remarkable contribution in education and social welfare. He was also awarded MJF (Melvin Jones Fellow) Medal by the Lions International Foundation for his contribution to the Society.
Quazi Sirazul Islam Chairman Executive Committee
He is the current Chairman of Bangladesh Jewellery Association and also life member of Red Crescent Society, Bangladesh and Member Trustee, People’s University of Bangladesh.
Mr. Imran Khan was inducted as Director in the Prime Bank Board in the year 2012. He has been serving as the Vice Chairman of the Executive Committee of the Board since 2013. He is CEO of the reputed PNL Holdings Ltd., Pedrollo nk Limited, PolyexPrint Ltd., PNL Water Mangement Ltd., Polytape Ltd. engaged as market leader for import, sales & distribution of PEDROLLO Brand Water pumps of Italy in Bangladesh. Besides laminating printing and Teflon tape. He is a promising business personality. He is also a director of Halda Valley Tea Company Ltd., Hill Plantation Ltd. His ownership business is Prima Enterprise, an importer and trader. Mr. Khan is an Ex-Cadet of Fauzdarhat Cadet College, Chittagong and completed his post graduation graduation from North South University, Dhaka.
Imran Khan Vice Chairman Executive Committee 20
Mr. Khan actively associates himself with CSR activities and is a member of the Chittagong Boat Club and Governing body of Lion Mukhlesur Rahman Foundation- a renowned NGO and Charitable Organization operating in and from Chittagong for the underprivileged and poor masses.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Dr. Shamsuddin Ahmad has been appointed an Independent Director of the Bank with effect from April 2015. Dr. Ahmad is a distinguished development practitioner with 26 years of experience in the World Bank tackling development challenges in the financial sectors of several countries. As a Senior Financial Sector Specialist in the South Asia region of the World Bank, Dr. Ahmad has worked extensively with the Bangladesh Bank, the State Bank of Pakistan and the Nepal Rastra Bank in assisting these Central Banks to transform themselves into professional, efficient and modern institutions. Dr. Ahmad retired from the World Bank Headquarters in Washington DC in February 2015, and is keen to utilize his expertise and experience to further develop the financial sector in Bangladesh. Dr. Ahmad completed his MBA with distinction from IBA in 1977, and started his career as a banker with American Express Bank in Bangladesh. He obtained his Masters and Ph.D. degrees in Development Economics from the University of Hawaii, and returned home to join the World Bank Office in Dhaka in October 1989. He was later posted in the Islamabad and Kathmandu offices of the World Bank. He has won several awards in his educational and professional pursuits, including the prestigious Makana Award for Leadership at the East West Center. He also completed the Financial Institutions Program for Economic Development at the Kennedy School of Government in Harvard University in 2004.
Shamsuddin Ahmad, Ph.D
Besides travelling to various countries, Dr. Ahmad loves playing tennis and bridge, and is also an enthusiastic ballroom-dancer.
Chairman
He is also Member of the Risk Management Committee of the Board of Prime Bank and Chairman of Prime Bank Securities Limited.
Audit Committee
Nasim Anwar Hossain Chairperson Risk Management Committee
Mrs. Nasim Anwar Hossain, Chairperson of the Risk Management Committee of the Board, is one of the Sponsor Directors of Prime Bank Limited. Mrs. Hossain, Masters in Political Science from Dhaka University, is a successful business personality and currently Director of Prime Cement Ltd., Lubricants Asia Ltd. and Bengal Tiger Cement Industries Limited. Mrs. Hossain is an active social worker and takes keen interest in different benevolent and philanthropic activities. She is also a Member of the Executive Committee of the Board of Directors of Prime Bank Limited.
21
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Mr. Md. Nader Khan is a Sponsor Director and past Chairman of the Board of Prime Bank. He is a prominent entrepreneur and has the credentials of setting up many high-ended business establishments in different sectors. Currently, he is associated with the following business concerns: Chairman: Artisan Ceramics Ltd. New Vision Information Technology Ltd. Pedrollo nk Limited PNL Holdings Ltd Polyexprint Ltd. Polyex Laminate Ltd. Halda Valley Tea Co. Ltd. Polytape Ltd. Hill Plantation Ltd. PNL Water Management Ltd Director: The Consolidated Tea and Lands Company (BD) Ltd. Baraoora (Sylhet) Tea Company Ltd. Pedrollo Dairy & Horticulture Ltd. Halda Fisheries Ltd. Consolidated Tea and Plantation Ltd. Proprietorship:
Pragati Corporation
One of his business concerns, Pedrollo nk Limited, is marketing PEDROLLO brand water pumps from Italy since 1985. Now he is the market leader in water pumps in Bangladesh since 1985. Mr. Khan was honored with ‘Prime Minister’s Award 2010’ for his contribution in tree plantation. Mr. Khan is a goodhearted personality and actively involved in diverse CSR activities. He is the Chairman of Lion Mukhlesur Rahman Foundation, Lion Mukhlesur Rahman Plastic Surgery Hospital, Zero Club Foot Project, Founder of Cider International School, Ex- Governor (2000-2001) of Lions Club International- District 315 B4 Bangladesh, to mention a few. He is a Trustee Member of Independent University of Bangladesh (IUB) & Chittagong Independent University (CIU). He is also member of Chittagong Club, Chittagong Boat Club and founder member of Senior’s Club, Chittagong.
Md. Nader Khan Director
Mr. Khan believes hard work and business integrity is the key to success. He considers vision is necessary to give proper directions for economic development. He, in view of his vast experience, likes to contribute in national development through his experience in expansion of quality education and tea plantation across the country.
Mr. Md. Shirajul Islam Mollah, M.P, a Sponsor Director, is also a past Chairman of the Board of Directors. He also held the position of Chairman of the Executive Committee of the Board on more than one occasions and is currently Member of the same Committee. A very successful business personality, Mr. Shirajul Islam is the Managing Director of China-Bangla Ceramic Industries Limited, Bengal Tiger Cement Industries Limited, Bajnabo Textile Mills Limited and United Shipping Lines Limited. Widely travelled, Mr. Shirajul Islam is involved with various social and educational activities and earned recognitions from a number of organizations. He is the founder of Bajnabo Abul Faiz Mollah High School, Shibpur, Narsingdi. A philanthropist, Mr. Md. Shirajul Islam Mollah is also the Chairman of Shirajul Islam Mollah Samaj Seba Foundation.
Md. Shirajul Islam Mollah Director
22
Currently, he is the Chairman of the People’s University of Bangladesh. He is a member of Dhaka Stock Exchange (DSE) and elected Member of Parliament and current President of Bangladesh Ceramic Wares Manufacturers’ Association.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Mrs. Marina Yasmin Chowdhury is a Sponsor Director and former Vice Chairperson of Prime Bank Limited. She is currently the Director of East Coast Group (ECG), a conglomerate focusing Energy business for last thirty one years. She is also the Chairman of EC Distribution Ltd. and Parkesine Products Limited, subsidiaries of East Coast Group. Mrs. Chowdhury is also former director of Green Delta Insurance Company Limited, one of the leading general insurance companies of Bangladesh. Outside the business, Mrs. Marina Y. Chowdhury is actively engaged in Social Welfare programs conducted through East Coast Group Foundation and is also takes keen
Marina Yasmin Chowdhury Director
personal interest in other philanthropic and charitable causes like Health and Education for the underprivileged. In her leisure time she enjoys cooking of variety of culinary dishes for her family.
Mr. Mafiz Ahmed Bhuiyan is a Sponsor Director and past Chairman of the Executive Committee and Vice Chairman of the Board of Directors. He is currently member of the Executive Committee of the Board. As a Businessman, Mr. Bhuiyan, in the early years of RMG/backward linkage in Bangladesh, led in setting up joint-venture with reputed firms belonging to the developed countries of Taiwan, Hong Kong, China and Korea. He is Life Member of Eastern University & South East University and Director of Australian International School (International Holdings Ltd).
Mafiz A. Bhuiyan Director
He is also Managing Director of IPE Technology Limited, Shepherd World Trade Limited, Shepherd Consultant & Management Ltd. and Representative Director in the Board of Citizen Securities & Investment Limited as Chairman.
Mrs. Salma Huq is one of the Sponsor Directors and former Chairman of the Executive Committee of Prime Bank Ltd. She is a Director of GQ Group since 1986, engaged in manufacturing pen, plastic furniture, disposable plastic wares, pp woven sacks, mosquito coils and snack foods. GQ Group is also one of the sponsors of Prime Insurance Co Ltd, Prime Finance and Investment Ltd, PFI Securities Ltd and Prime Capital Management Ltd. Mrs. Salma Huq is actively engaged in philanthropic activities providing scholarship to needy students, free medicine and arranging treatment for the poor. She is one of the founders of Qazi Saleema Huq Women’s College and Qazi Saleema Huq Girls’ High School.
Salma Huq Director
She is currently Member of the Executive Committee of the Board of Directors of Prime Bank Limited.
23
About Prime Bank
PRIME BANK A N N UA L R E P O RT 2 0 1 5
A successful businessman, Mr. Md. Shahadat Hossain is a Sponsor Director of Prime Bank Limited. He is a past Vice Chairman of the Board of Directors also. His business
Md. Shahadat Hossain Director
entity consists of VIP Shahadat Poultry & Hatchery, VIP Shahadat Cold Storage and Rangpur Agro Industries. An active social worker, Mr. Hossain is associated with different social welfare organizations dedicated to the services of general masses. He is also a Member of the Executive Committee of the Board of Directors of Prime Bank Limited.
Mr. Nafis Sikder, Director is the Managing Director of renowned Palmal Group founded by his late father, Engr. Nurul Haque Sikder, a prominent business personality of the early eighties. Mr. Nafis after completion of ‘O’ and ‘A’ level went to Washington University, Saint Louis, Missouri, USA and obtained BS in Business Administration with distinction. With his ingenuity and expertise in operations, strategic management & marketing skills, expanded the Group’s business many folds in all spheres of RMG business. The group at present is the most prolific and trusted suppliers of Apparels to some of the reputed North American, Australian and European buyers.
Nafis Sikder Director
Waheed Murad Jamil Director
24
Mr. Nafis Sikder is an avid philanthropist and actively contributes in the promotion and expansion of educational activities through establishing Schools and Colleges. He is also associated with numerous socio welfare and charitable organizations actively supporting the causes of Health Care and poverty alleviation.
Mr. Waheed Murad Jamil has been appointed as Director of the Prime Bank Ltd. with effect from 28.09.2015 to represent M/s. MAWSONS Ltd, a business concern owned by his family members. An emerging business personality, Mr. Jamil is a business graduate and current Director of Primeasia University, Prime Islami Life Insurance Ltd. Fareast Islami Securities Ltd. and Managing Director of Everest Homes Ltd.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
About Prime Bank
Mr. Mohammad Mushtaque Ahmed Tanvir (Titash), representing Uniglory Cycle Industries Limited, was appointed Member of the Board of Prime Bank in 433rd Board Meeting held on 13.05.2015. Mr. Tanvir is an Architect from BUET. After graduating from BUET in 1994, he started business career in his own discipline wherein he practiced for 6 years. Subsequently, he joined Uniglory Cycle Components Limited - a sister concern of the Meghna Group as the Managing Director. Mr. Tanvir became the Chief Executive officer (CEO) of the Transworld Bicycle Co. Ltd another Unit of the same Group wherein he was largely responsible for planning, programming, designing and managing the 100% export oriented industry. Within a short span of time, Mr. Tanvir became the Managing Director of Uniglory Paper & Packaging Ltd and director of some of the industries under the Group. Finally he became the Executive Director of Uniglory Cycle Industries Limited, the biggest unit of the Group. During his tenure in various capacities, he made himself a symbol of innovation, persistence and entrepreneurship for the Group.
Mohammad Mushtaque Ahmed Tanvir (Titash) Director
Tarique Ekramul Haque Director
Mr. Tanvir is a sportsman having deep attachment for playing and managing Basket Ball & Golf. He is also associated with a number of organizations like Cadet College Club Ltd, Gulshan Youth Club, Bogra Golf Club, Mirzapur Ex. Cadet Association. He was also General Secretary of Athletic Club of EUCSU. Mr. Tanvir is a widely traveled person and led a number of sports teams both locally and regionally.
Effective December 10, 2015 Mr. Tarique Ekramul Haque has been appointed Director of the Prime Bank. Mr. Tarique Ekramul Haque, Chairman and Director of Bangla Trac Limited, completed his graduation degree (BA Honors in Economics) from University of Manchester, United Kingdom in 2001. Afterwards, he obtained Post graduate degree (MSc in Accounting & Finance) from London School of Economics, U.K. in the year 2003. Mr. Tarique Haque started his career in 2001 in Goldman Sachs International, London, UK as a Financial Analyst. In 2004, upon completion of his Masters in Accounting and Finance from the London School of Economics, he returned to Bangladesh to join his family in establishing Bangla Trac Limited (Bangla CAT) - the Dealer for Caterpillar Inc. (USA) products in Bangladesh. Today, Bangla CAT is the market leader for electric power solutions and construction machineries in Bangladesh. In 2008, he lead the establishment of Bangla Trac Communications Limited - an International Gateway Operator. In 2010, he lead the establishment of Acorn Infrastructure Services Limited – a power plant based in Chittagong.
Mr. G.M. Khurshid Alam has been appointed an Independent Director of the Bank with effect from April 2015. Mr. Alam is also serving as a Director with Policy Research Institute (PRI), a leading policy and economic research think-tank of Bangladesh. Prior to that he served for 17 years with the World Bank, as Senior Private Sector Development Specialist in its South Asia Private Sector and Finance (SASFP) Department, from where he retired in August 2012. He started his professional career entering Government service in 1981 as a member of the Bangladesh Civil Service (Administration) cadre. He served in different positions both in the field administration, in Ministry of Finance, and in Bangladesh Biman before joining the World Bank in 1995.
Dr. G M Khurshid Alam Independent Director
Mr. Khurshid Alam is a Ph.D. in Economics from Boston University in USA. He is married and has three children. He is also member of the Audit Committee and Risk Management Committee of the Bank and Director of Prime Bank Investment Limited.
25
About Prime Bank
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Mr. M. Farhad Hussain FCA has been appointed an Independent Director of the Bank with effect from April 2015. Managing Partner of M/s Hussain Farhad & Co., Chartered accountants, Mr. Hussain is a fellow member of the Institute of Chartered Accountants of Bangladesh with thirty six years of experience in key positions of Finance and Accounts with multidisciplinary business organizations at home and abroad. Mr. M. Farhad Hussain FCA is a council member and former President of The Institute of Chartered Accountants of Bangladesh (2007). He is the Technical Advisor of South Asian Federation of Accountants (SAFA). He is also director of Dhaka WASA and Bay Asset Management Ltd. Independent Director of Matin Spinning Mills Ltd and Al-Haj Textile Mills Ltd. and Chairman of Prime Bank Investment Limited.
M. Farhad Hussain FCA Independent Director
He is former Director of Shadharan Bima Corporation, Dhaka Stock Exchange (DSE), Agrani Bank Limited and former Board Member of South Asian Federation of Accountants (SAFA), Confederation of Asia Pacific Accountants (CAPA) and former Advisor of Bangladesh Securities and Exchange Commission & Financial Consultant of Oriental Bank Ltd. Mr. Hussain is also member of the Audit Committee and Risk Management Committee of the Board of Prime Bank.
Mr Ahmed Kamal Khan Chowdhury took over the charge of Prime Bank on 15th September 2014 as Acting Managing Director prior to becoming Managing Director on 14th December 2014. Before taking over the charge as Managing Director, he was Deputy Managing Director and Chief Risk Officer of the same bank. He has over 31 years of banking experience in the field of Finance, Risk Management, Internal Control and Compliance. He held important management position viz. Chief Finance Officer, Chief Risk Officer, Head of Credit Committee, CAMLCO (Chief Anti Money Laundering Compliance Officer), Head of Finance and Head of Branch in International, Specialized and Private Commercial Banks operating in Bangladesh during his banking career. Over the time he developed strong professional skills in multitasking environment and as a believer in process development was always the core team member of the process development to bring more transparency and smooth workflow.
Ahmed Kamal Khan Chowdhury Managing Director
26
Mr. Chowdhury is Masters in Economics from the University of Dhaka and MBA in Finance and attended various trainings, workshops and seminars at home and abroad on different aspects of banking. He is a member of the Executive Committee of Association of Bankers of Bangladesh and a member of the Board of Directors of Primary Dealers Bangladesh Limited.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
CORPORATE GOVERNANCE
27
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
02
COMPOSITION OF BOARD AND COMMITTEES
BOARD OF DIRECTORS
Chairman
Khandker Mohammad Khaled
Vice Chairman
Mr. M.A. Khaleque Quazi Sirazul Islam
Vice Chairman Director
Mrs. Nasim Anwar Hossain
Director
Mr. Md. Nader Khan
Director
Mr. Md. Shahadat Hossain
Director
Mr. Md. Shirajul Islam Mollah
Director
Mrs. Marina Yasmin Chowdhury Mr. Mafiz Ahmed Bhuiyan Mrs. Salma Huq Mr. Nafis Sikder Mr. Imran Khan Mr. Waheed Murad Jamil Mr. Tarique Ekramul Haque Mr. Mohammad Mushtaque Ahmed Tanvir Mr. Shamsuddin Ahmad, Ph.D Dr. G. M. Khurshid Alam Mr. M Farhad Hussain FCA
Director Director Director Director Director Director Director Director Independent Director Independent Director Independent Director
EXECUTIVE COMMITTEE
Quazi Sirazul Islam Mr. Imran Khan Mr. Md. Shirajul Islam Mollah Mr. Mafiz Ahmed Bhuiyan Mr. Md. Shahadat Hossain Mrs. Salma Huq Mrs. Nasim Anwar Hossain
Chairman Vice Chairman Member Member Member Member Member
AUDIT COMMITTEE
Mr. Shamsuddin Ahmad, Ph.D, Khandker Mohammad Khaled Mr. M.A. Khaleque Dr. G. M. Khurshid Alam Mr. M Farhad Hussain FCA
Chairman Member Member Member Member
RISK MANAGEMENT COMMITTEE
Mrs. Nasim Anwar Hossain Khandker Mohammad Khaled Mr. Shamsuddin Ahmad, Ph.D
Chairperson Member Member
Dr. G. M. Khurshid Alam Mr. M Farhad Hussain FCA
Member Member
Prof. Maolana Mohammad Salauddin Mr. Azam J Chowdhury Prof. Maolana Mohammad Shahidul Islam Prof. Dr. Shamsher Ali Mr. M. Azizul Huq Dr. Muhammad Abdur Rashid Maolana Shah Mohammad Wali Ullah Mr. Muhammad Abdul Wahhab Mr. Ahmed Kamal Khan Chowdhury Mr. Abu Zafar Md. Sheikhul Islam
Chairman Member Member Member Member Member Member Member Member Member Secretary
SHARI’AH SUPERVISORY COMMITTEE
28
Mr. Azam J Chowdhury
PRIME BANK A N N UA L R E P O RT 2 0 1 5
MANAGEMENT COMMITTEE MEMBERS
C o r p o ra t e G ove r n a n c e
Mr. Ahmed Kamal Khan Chowdhury
Managing Director
Mr. Md. Tabarak Hossain Bhuiyan
Deputy Managing Director
Mr. Habibur Rahman Mr. Md. Golam Rabbani
Deputy Managing Director Deputy Managing Director
Mr. Rahel Ahmed
Deputy Managing Director
Mr. Md. Touhidul Alam Khan
Deputy Managing Director
Mr. Ahmed Shaheen
Deputy Managing Director
Mr. Syed Faridul Islam Mr. Md. Iqbal Hossain
Deputy Managing Director SEVP & Head of IT Infrastructure & Planning
Mr. Md. Anwarul Islam
SEVP & Chief Anti-Money Laundering Compliance Officer (CAMLCO)
Mr. Ziaur Rahman
SEVP & Head of HRD
Mr. Kazi MahmoodKarim Mr. A.O.M Rashed
SEVP & Head of SME SEVP & Head of Marketing
Mr. Shahjahan Majumder Sk. Matiur Rahman Mr. Md. Shahadat Hossain
EVP & Head of Financial Administration EVP & Head of Treasury EVP & Head of Operations
ASSET LIABILITY COMMITTEE MEMBERS
Mr. Ahmed Kamal Khan Chowdhury Mr. Md. Tabarak Hossain Bhuiyan Mr. Md. Golam Rabbani Mr. Habibur Rahman Mr. Rahel Ahmed Mr. Md. Touhidul Alam Khan Mr. Ahmed Shaheen Mr. Syed Faridul Islam Mr. Kazi MahmoodKarim Mr. Mohd. Rafat Ullah Khan Sk. Matiur Rahman Mr. Md. Shahadat Hossain Mr. Shahjahan Majumder Mr. Mohammad Jashim Uddin
Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director SEVP & Head of SME SEVP & Head of Credit Risk Management EVP & Head of Treasury EVP & Head of Operations EVP & Head of Financial Administration EVP & Head of Internal Control & Compliance
MANAGEMENT RISK COMMITTEE MEMBERS
Mr. Syed FaridulIslam Mr. Md. Iqbal Hossain Mr. Md. Anwarul Islam Mr. Md. Rafat Ullah Khan
Deputy Managing Director SEVP & Head of IT Infrastructure & Planning SEVP & Chief Anti-Money Laundering Compliance Officer (CAMLCO) SEVP & Head of Credit Risk Management
Mr. Md. Jashim Uddin Sk. Matiur Rahman Mr. Md. Shahjahan Majumder Mr. Md. Shahadat Hossain Mr. Mir Md. HassanulZahed Mr. Taher Jamil Mr. Md. Feroz Al Azad
EVP & Head of Internal Control & Compliance EVP & Head of Treasury EVP & Head of Financial Administration EVP & Head of Operation and IT Operation EVP & Head of International Division SVP& Head of Credit Administration SVP& Head of Risk Management
Mr. Ahmed Kamal Khan Chowdhury Mr. Md. Golam Rabbani Mr. Habibur Rahman Mr. Syed Faridul Islam Mr. Md. Iqbal Hossain Mr. Md. Anwarul Islam
Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director SEVP, Head of IT Infrastructure & Planning SEVP, Chief Anti-Money Laundering Compliance Officer (CAMLCO) EVP, Head of IT Service & Support EVP, Head of Financial Administration
IT STEERING COMMITTEE MEMBERS
Mr. Md. Shahadat Hossain Mr. Md. Shahjahan Majumder
29
FROM THE OFFICE OF THE CHAIRMAN
30
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
The year 2015 started with signs of uneasiness on the political
Domestic Banking Sector
front but gradually settled down and since second quarter
The year 2015 was a challenging year for the banking industry
onwards, things started rolling on in a comparatively peaceful
as a whole marked with lower profitability and higher NPL. Due
environment. This helped economy register a growth of 6.50%.;
to dearth of investment opportunities, banks suffered from
the growth could have been better had a vibrant investment
excessive liquidity estimated in the region of BDT 37 billion after
ambience prevailed. The service sector once again turned out
meeting CRR requirement. Call money rate plummeted to 3.69%
to be the major contributor to the GDP ahead of manufacturing
at the end of the year which was 8.57% in the corresponding
and agriculture. The year was also marked for graduation of
period which is also an indicator on the status of idle fund in the
Bangladesh from Low Income Country to Lower Middle Income
banking system. In this backdrop, all banks were compelled to
Country with a per capita income of USD 1316.
adjust both deposit and advance rate downward by 15.33% and
Due to prevailing of an accommodative monetary policy, inflation was kept checked to a tolerable level of around 6.00%+. Still there was room for reducing non-food inflation through downward adjustment of oil prices in line with the global market trend. Performance of the foreign trade was satisfactory as evident from the figure of export volume of $16.1 billion despite appreciation of Taka against the EURO.
11.61% respectively within the year which ultimately shrank spread by 6.05%. A gloomy credit environment prevailed round the year as evident from the figure of 13.22% growth in the private sector against the projected 14.30% determined by the central bank. Meanwhile, the most pressing concern was rise of NPL in the Banking Industry, particularly in the State-owned banks where NPL was 22.00% + of the total advances. The situation of NPL is not favorable in Private Banks as well where the ratio was over
On the contrary, import growth was merely 2.80%, reflecting
the threshold of 5.00% considered reasonable by the central
sluggish appetite for investment. Remittance from the wage
bank.
earners increased but marginally due to shrink of overseas labor market and euro-zone economic crisis. Private sector credit growth hovered around 13.22% during the year which
On the governance side, Central Bank demonstrated toughness and was not hesitant to appoint administrator where they observed compromises. In spite of all the odds , deposit and
was short of forecasted 14.33%. Declining demand for credit
advance volume grew by 13.89% and 10.23% respectively last
adversely affected country’s banking sector which performed
year which is the silver lining for the industry in 2016.
marginally as suggestive from the volume of 1.20 trillion idle money. Though, there were fewer political unrests, lower
Prime Bank Performance-2015
interest rate prevailing and improved power situation, yet the
Against the backdrop stated above, bank restructured
investors were not enticed enough to invest in large scale
its portfolios to deal with the changes in the dynamics
which in fact, is a necessary pre-condition for the economy to
of the industry. The deposit and advance at the end of
grow beyond 7 - 8%.
the year stood at BDT. 19,483 crore and BDT. 15,187 crore
The performance of capital market suggests investors’
respectively suggesting deposit accumulation was stable
confidence was not restored yet. We hope concerned
while loans & advances grew by mere 3% which was also
authorities pays attention on the issue by formulating a proinvestment policy in order to boost investment to a vibrant level and cause positive impact to the sector and the economy in the process.
mainly due to introduction of few innovative short term loan products during the 4th quarter of the year. The advance deposit (AD) ratio of the bank hovered around 68-70% (it was 78% in December 2015) which was slightly lower than the industry average. The operating profit of the bank was
The economy of Bangladesh demonstrated more resilient than
BDT 591 crore which is lower than that of 2014; still this
ever, as appears from the macro-economic indicators. However,
volume is higher than the industry average. Decline of the
the growth has not been up to the projected expectations, yet
operating profit from that of the previous year was mainly
consistent GDP growth @ 6.00%+ for the successive years is a
due to concentration on quality than considering reckless
demonstration of strong commitment.
expansion of credit portfolio for minimizing surfacing of
Global economy on the other hand appeared in a Holding pattern. The US in-spite of solid domestic demand and strong dollar, could achieve a GDP growth of 2.40%. With labor cost & interest rate rising, profit earning became increasingly difficult. In the Euro Zone, domestic demand and exports were the prime drivers of the economy which resulted in moderate recovery. In the Asia-pacific region, after adjustment of overstated official growth rate of China, India overtook all as the growth champion of the region.
surprises from the unforeseen. Due to steady lending which only increased slightly during the fag end of 2015 and reduction of spread, net profit of the bank decreased from that of previous year. Consequently, Return on Equity stood at 8.41% which is below than that of the previous year. Return on Asset stood at 0.84″% which can be termed satisfactory. Still both the indicators of profitability outperformed the industry averages for the year. The ratio of NPL at the end of the year to total advance of the bank stood at 7.82% which suggests due attention for improvement.
Despite the unfavorable scenario both in the domestic and
During the year, Bank decided to switch to centralization
global level, Prime Bank prudently managed the uncertainty to
of Business processing which is primarily based on strong
ward off the challenges that floated on the industry skyline. The
Customer Relationship Management concept and which upon
bank took a number of timely and significant policy changes to
taking full effect, would greatly impact control mechanism of
draw a satisfactory conclusion for the year.
the bank and thus retard fresh emergence of NPL.
31
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
The Capital Adequacy Ratio (CAR) at the end of the year
Strategic Priorities
stood at 12.74% which is above the regulatory requirement
of 10.00%, but shall be revised to 10.625% at the end of 2016.
Maintaining quality asset & growth is the major strategy in term of portfolio management. The Bank has devised
The additional CAR will help bank making a smooth transition
supportive and superior IT infrastructure including
to Basel III regime which has started since beginning of the
setting up unique ‘Dashboard’ along with multiple
year-2016. Adequate numbers of stress testing exercises were
reports generating software to serve Management as a
conducted during the year to foresee probable consequences
constant source of decision making tool. This will assure
under different stages of distressed scenarios where outcome
all key parameters of core risks which include prudent
in most cases appeared not very concerning.
management, good profitability, and strong asset quality along with strengthening compliance culture, transparency and accountability to the stakeholders.
Customer Focus The Bank has always been a customer focus bank ever since its
Based on the robust IT infrastructure, Bank has been
inception in 1995. Whatever significant changes were made, be
relentlessly aiming to deliver technology driven product
it customer demand, insight, mission or the strategic priorities, it
and services and this endeavor shall gain more focus
has always been the Bank’s priority in assessing customer insight.
upon completion of the on-going re-implementation/up-
The bank has always believed in providing superior customer
gradation of the existing platform.
services to achieve competitive advantage over the peer banks. To understand customers’ preferred product and services, Bank
The Bank has already completed centralization of Trade Services and Credit Administration. Business Processing
conducted customer satisfaction survey periodically. Through
segment is near completion; consequently, management
this survey, bank could identify the customers’ satisfaction with
of large corporate accounts from the branches will be
the product features, pricing etc. Mystery shopping exercises
withdrawn to the Centre. Gradually the SME and the
were done to identify weakness in the Service Quality and for
Consumer banking clients will be under the umbrella of
taking remedial corrective measures accordingly.
centralization. Thus, the Bank will be able to improve overall customer relationship management and ensure better
Business Process Centralization & Delegation of Business authority As part of the strategy and in line with the philosophy that the
product - services delivery.
IT Steering Committee has been working and overseeing the progress of implementation of ongoing up-gradation
Customers are life-line of banking business, the Board had been
of the existing core Banking Software of the bank which will
at the heels of the Management for some time for migration
have positive impact on both the conventional and Islamic
to total centralization of the business processing. Already,
banking businesses. IT Steering Committee has been also
progress was ongoing in-phases and this year (2015) it was the
directed to focus on IT governance, particularly the cyber
turn of wholesale banking based on Customers Relationship
crimes.
Management which was finally given a green signal by the Board leaving the branches to deal with the SME & Consumer
Renewed efforts will be undertaken for recovery of NPL
banking segments in addition to carrying out the usual role of
including written off ones. Preventive measures shall be
service delivery point. The primary idea is to maintain close
strongly deployed for checking the emergence of fresh
liaison with the corporates for delivery of customized products
NPL through further strengthening of the concerned
and services and at the same time streamlining the processing
division and appointment of third party service providers.
matters for reducing lead time which was observed to be passing through noticeable duplications.
Development of Human Resource and their transformation into Human Capital through constant training both at
Another reason for preferring centralization process is the
home and abroad shall be pursued more passionately with
distinguishing feature of constant liaison with the corporates
additional budget allocation. For motivation & retention,
under a defined relationship which of its own draws
bank has already introduced and implemented broad
monitoring responsibilities of the Relationship Officers/
banding pay-package policy for the performing employees.
Managers, thus reducing the chances of emergence of new surprises in the form of NPL. Therefore, our valued
Shariah Banking is another area where bank have refocused
stakeholders could take note of the revelation that NPL issue
its attention and for which specific training program both
shall be strongly plugged down.
at home and abroad have been chalked out for execution considering the religious sentiments of a section of the
Simultaneously, in order to concentrate on the policies and
majority.
large loan issues alone as per central bank’s guidelines, Board decided to delegate more Business authority to the
Identification of Cost drivers and their optimization at all
Management and the Executive Committee of the Board in
levels of operations have been ordered and taken up as
conformity with the vision of centralization. The Board took
priority.
all these decision considering the requirement of professional due-diligence exercise for the diversified business propositions
32
received at the different counters of the bank. The idea is to
Corporate Governance
also to allow flexibility in dealing with customers’ requirements
Bank believes implementation of good governance across the
in line with the vision of becoming customer-centric.
organization is the cornerstone of sustainability particularly
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when it involves dealing with multiple stakeholders including
natural calamity or disasters or situation affecting large mass
public depositors. The bank is currently fully compliant with
of the population and organizing annual Stipend distribution
the guidelines and directives of Bangladesh Bank (BB) and Bangladesh Securities and Exchange Commission (BSEC)
program to the meritorious but underprivileged section of the society.
in its operation. To protect the interest of the stakeholders
On the long-term, bank is focusing more in nation building
including depositors and shareholders, all statutory/assistive
through investing in education, health and other pressing areas
committees such as Executive Committee, Risk Management
through various projects under the Prime Bank Foundation like
Committee, and Audit Committee remained functional round the year. Adequate numbers of independent directors
Eye Hospital’, a state of the Art Eye Hospital, ‘Prime Bank Nursing
represent the Board and assistive committees, both in Prime
‘Prime Campus’, an affordable English Medium School, ‘Prime
Bank and in its subsidiaries in accordance with the guidelines
Institute’ are among the few such initiatives. The bank envisions establishment of Medical College/Hospital, International
of the regulators. Board always reviews the minutes of the
Auditorium and a full-fledged Cricket Academy in future. The
subsidiaries whereas Audit committee examines the adequacy of internal control and oversight functions on behalf of the
process in the field of games & sports has already started with
Board and the Management.
cricket competition and patronizing of National School Cricket Championship across the country for producing and nurturing budding cricketers for the international scenes.
Both for management and board, a well-defined Code of Conduct is in place and complied with. Responsibilities and areas of controls of Board and Management are also well defined. Management performs their duty with due diligence so that a fiduciary relationship is maintained between shareholders, Board and the management. To ensure good corporate governance, Prime Bank follows various lines of defense to minimize irregularities to negligible level. Internal Control and Compliance Division remains ever vigilant to detect any irregularities. A dedicated Risk Management Team is in place to monitor all core risks inherent with banking business. Finally, as the third Line of defense, two External Auditors are in place to opine on the financials and the capabilities of the bank to meet financial obligations. Bank also resorts to examination of its standing by the External Rating Agencies to neutrally judge and opine bank’s strength/ fundamentals for sustainability and thereby assisting building stakeholders’ trust & confidence in the management. As part of disclosures under Basel II, all the reports are published in the well circulated national dailies and communicated to the regulatory authorities including hosting on the bank’s website. All material information is revealed in the reports so that the shareholders and broadly the stakeholders can get a fair and true view of the bank to facilitate their investment decisions.
Corporate Social Responsibility (CSR) As a corporate citizen, Prime Bank has been always alert about its responsibilities to the community and the society. Prime Bank understands that it is the society where the bank does its business, as such; it always strives with stronger pursuits to be a truly socially responsible bank. The bank takes such social service as an obligatory duty to demonstrate its commitment to improve the life of the inhabitants around and within it. Since Inception, Prime Bank has undertaken various approaches to serve the community under its Corporate Social Responsibility (CSR) and on each passing day, involvement of the bank is increasing. Broadly, the bank conducts its CSR functions from two distinct fronts; short-term and long-term basis. On short-term front, Bank remains vigilant to respond emergency issues like replenishing Prime Minister Relief Fund,
participation of the Prime Bank Cricket Club in the domestic
On the business front, Prime Bank has been alert to extend financial services to the underserved section of the society. Through its financial inclusion mantra, the Bank has been offering funding facilities to the Women entrepreneurs, SME Customers, Students, farmers and neglected ones under soft terms and concessional pricing. Through an environmentfriendly credit policy, Prime Bank always evaluates the environmental impact of a project before financing so that sustainable business can be promoted. As an active corporate entity, Prime Bank pursues all such endeavors under its CSR domain for the welfare of the society to which we all belong.
Note of Appreciation I express my gratitude to the valued customers, indispensable patrons, dear stakeholders, Board Members for supporting to maintain satisfactory performance of the bank. Particularly, I would like to express my utmost and invaluable respect to the Central Bank and other regulators for their time to time directives which have been immensely helpful in formulation of bank’s own policies & guidelines at different critical times during the year. I would like to thank Management for their decision making skills under different macro-economic situations and believing in the vision of the Bank and taking it forward despite the typical challenges each year industry has to face, though in varied formats. Finally, I like to end with the note that Prime Bank’s march to excellence is ongoing and will continue through various ‘strategic routes’ setting aside the adversities & the challenges due to its strong pillars of fundamentals. We, therefore, hope that you will be part of our continuous journey to a brighter, rewarding two thousand sixteen and so on.
Azam J Chowdhury Chairman
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MANAGING DIRECTOR & CEO’S REVIEW
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The banking sector during 2015 passed through a common
growth was achievable for Bangladesh in this fiscal. In its ‘Asian
agenda of “Repositioning for growth amidst regulatory
Development Outlook 2015’, released recently, it said political
pressure for adopting compliance infrastructure and enhancing risk governance. Excess liquidity, stiff competition
stability, increased spending on public and private sectors
in corporate and commercial lending and rising demand for
and rising export incomes as well as remittances will help Bangladesh attain a 6.7 percent GDP growth. Production, along
foreign currency loans by corporate houses impacted spread
with purchasing power and demand, would increase following
and top line revenue growth. An inconclusive macroeconomic
the pay rise of government officials. According to the report, 9
business environment throughout the year, the recurrence of political problem and negative impact on economic activity
percentage points will be added to the GDP growth because of
made it difficult for the bank to sustain the profitability level of earlier years. A substantial provision for NPL negatively affected
there was much investment in the private sector. Bangladesh’s trade balance is likely to worsen slightly in FY2015/16 (July-June)
ROA and ROE of the banks. As top line revenue growth was
as imports will continue to surge on the back of a strong taka.
not impressive, banks focused on operational efficiencies as a way to drive financial performance and embarked on planned
However, a modest recovery in the export sector and strong
cost optimization strategy. In this difficult scenario, being an agile institution, Prime Bank was able to maintain sustainable operating performance in 2015 through generating non interest/investment income and cost optimization. We focused on balance sheet management and a higher proportion of investment portfolio allocated to treasury instruments also helped to generate non interest investment income. However, the higher provision requirements for NPLs caused net income to drop below the desired level. We continued to simplify operations seeking scale of efficiencies.
balance, which should in turn help to maintain external stability. This reflects a relatively well-balanced economy which should be positive for medium-term growth. Bangladesh Bank continued to maintain cautious yet growth and investment friendly monetary policy for achieving the desired growth rate.
Global Economy In 2015, global economic activity remained subdued. Global growth is projected at 2.4 percent in 2015 and 2.9 percent in 2016. Growth in advanced economies is projected to rise by 0.20 to 2.10% in 2016, and hold steady in 2017. Overall activity remains resilient in the United States, supported by still-easy financial conditions and strengthening housing and labor markets, but with dollar strength weighing on manufacturing activities. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual narrowing of output gaps. The picture for emerging market and developing economies is diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016–17. Indian growth rate is projected to be 7.5% during 2016. The projected pickup in growth in the next two years—despite the ongoing slowdown in China—primarily reflects forecasts of a gradual improvement of growth rates in countries currently in economic distress, notably Brazil, Russia, and some countries in the Middle East.
Bangladesh Economy The Bangladesh economy secured an average 6.2 percent growth over the last decade despite political doldrums, structural constraints and global volatility. Growth of Bangladesh economy is astonishing especially when global economy is facing a downturn. In fiscal year 2015, Bangladesh graduated to the status of a lower middle income country from the low income country and to the OECD Export Credit Eligibility group 5, which is just below India but ahead of all other South Asian neighbours. Government of Bangladesh (GOB) has been projecting a 7 percent GDP growth in this fiscal. The Asian Development Bank (ADB), however, had said that a 6.7 percent
this. It would be possible to achieve even 7 percent growth if
remittance growth will lend support to the current account
Impact of Basel III Bangladesh has started implementing Basel III in banking sector and new regulatory requirements such as the Liquidity Coverage Ratio (LCR) & Net Stable Funding Ratio (NSFR)” have now to be maintained. These measures are suggested to constrain leverage in the banking sector to mitigate the risk of the destabilizing deleveraging processes which can damage the financial system and the economy and introduce additional safeguards against model risk and measurement error by supplementing the risk-based measure with a simple, transparent, independent measure of risk which will soon force banks to make changes to Balance Sheets. The declining interest rate environment is another scenario banks have begun to address by managing deposit outflows and reclassifying some securities in the portfolio. Despite an improving economy, new liquidity and capital constraints will create major headwinds for profitability in 2016, making balance sheet optimization a top priority. The Banks will have to hold enough liquid assets to weather 30 days of serious market stress. As a result, balance sheets will be burdened with more low-yielding assets. The optimal asset mix will be further influenced by multiple proposals including the Net Stable Funding Ratio, a new longer-term funding and additional capital surcharges for banks involved in capital markets businesses. Achieving balance sheet efficiencies will be both critical and challenging amidst a deluge of regulatory and market forces. To retain deposits, banks should be ramping up their customer relationship programs, increasing cross-selling efforts, and investing in product lines that attract stable deposits. On the asset side, there will be a stronger need to assess the portfolio with a critical eye, as the impact of new rules.
Strengthening Compliance and Risk Management In 2015, the industry focused on acclimating to regulatory pressure. Banks sought to improve internal controls, bolster compliance staff and resolve outstanding legal and regulatory issues. Regulators pressured banks to improve risk governance, focus on risk management and compliance in 2015 and beyond. Focus for 2016 new regulatory actions including the
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heightened risk governance expectations and the enhanced
people. We are increasingly operating a shared service model
prudential supervision rule require improvements in risk
for major functions. Improved ‘Centralization’ have allowed us
capabilities and culture. Significant risk-based decisions are made throughout the organization on a daily basis; weaving
to take advantage of synergies through the sharing of ideas and collaboration from cross-functional working groups.
risk-intelligent behavior into the fabric of the bank’s culture will
The Wholesale Banking based on customer relationship
become the new benchmark of a mature governance program.
management was rolled out which would ensure delivery
Seeking cost efficiencies wherever possible will help realize
of customized product and services and at the same time
goals to enhance the risk and compliance culture to complete. The increasing attempts of cyber crime would force the banks
streamline the processes in order to reduce the turnaround
to remain vigilant and invest more in IT security.
time. In order to equip the management for proper functioning of the model, enhanced business authority is delegated by the Board to them and the Executive Committee of the Board.
Business Performance
However, this delegation will demand very strong supervisory
Despite challenges in the banking sector, Prime Bank stayed
with particular emphasis on risk management, internal audit
alongside the industry average growth rates in business
and internal controls, accountability and transparency. Besides firmly discouraging the abetting of habitual, willful repayment default; creating room for helping out recovery of genuine businesses distressed by circumstances beyond their control with realistic debt restructuring in line with international best practices is under consideration.
volumes and the underlying streams of revenue. Total assets decreased by 1.08% to BDT 252,161 million, deposits also shrunk by 4.89% to BDT 194,825 million and loans and advances increased to 151,865 million from 147,367 million in the year 2015 - a positive growth of 3.05%. The Bank contained the rising NPLs through constant monitoring and focusing on recovery efforts to finally close the year with an NPL ratio of 7.82% as against an industry average of 8.79%. Margins came under pressure in the wake of a declining interest rate regime which saw assets being re-priced faster than the liabilities. The Bank’s cost of deposit has come down to 6.64% (2014: 7.36%), while capital adequacy ratios grew slightly from 12.71% to 12.74%. Moving forward, we expect interest rates to be stable in 2016 and provide the impetus for a higher credit growth. As we head into 2016, many commercial projects that were not previously deemed financially viable could gain new life in the favorable interest rate environment. Even though our margins will be leaner, it would be compensated through growth in volume and improved asset quality with borrowers finding their credit obligations more affordable. Remittance growth started gaining momentum and became positive in the second half of 2015. However, remittance growth got normalcy and trended up reaching 41,685 million in 2015; recording a solid growth of 5.57 percent. Actually, the slow-down in remittance was primarily due to drop in the number of workers migrating in 2013-14 and political uncertainty in Bangladesh. Export growth slowed down in July-December of 2014, given the pace, the central bank expects to achieve 8 percent growth in export by June 2016. Our exports reached up to BDT 93,700 million in 2015 which was BDT 110,096 million in 2014. Import payments reached up to BDT 114,747 million in 2015. Our aim has always been to focus on our fundamentals - strengthening the Balance Sheet, ensuring stability and maintaining a strong current and savings account base. Profit before tax of the Bank was BDT 2,752 million which was 16.10% lower compared to BDT 3,280 million in 2014 while earnings per share were at BDT 2.08 (BDT 2.32: 2014).
oversight on credit disbursement and loan recovery disciplines;
Business Transformation In 2015 we made significant progress in transforming ourselves to become the ‘compliant’ bank for regulators and customers. During 2015 the macroeconomic environment remained challenging – economic contraction, unemployment and political and regulatory uncertainty impacted both us and our competitors. Against these uncertainties we successfully controlled branch operations while taking steps to de-risk the business. Going forward we will grow mass for our customers, leveraging strong relationship management capabilities and a comprehensive product range while capitalizing on our brand and investment services expertise. This focused strategy will enable us to compete successfully with our competitors. At the same time we will continue to support our existing customers through a lower cost platform. The business continues to proactively work to identify and mitigate any operational risk of pending regulatory change without compromising customer service. In executing our strategy, we ensure that we can manage operational risk and grow the business without compromising on quality. We are continuously expanding our network across the country for attaining geographical and demographic dividend. At the end of 2015, we had 145 branches and five subsidiaries i.e. Prime Bank Investment Limited and Prime Bank Securities Limited locally while Prime Exchange Co. Pte. Ltd., Singapore, PBL Finance (Hong Kong) Limited and PBL Exchange (UK) Limited outside the country. At the end of 2015, we have as many as 168 ATM booths at different important hubs across the country. We intend to keep increasing the number of branches of PBL as well other new products of Alternate Delivery Channels across the country in 2016.
Business Model PBLseeks to satisfy the needs of our customers and clients by offering a rounded value proposition – a full range of products and services – and thereby, we aim to achieve a smoother income stream and sustainable returns. PBL’s competitive advantage is created by the scale and diversity of our businesses and the quality, character and relationships of our
36
Focus on 2016 In 2016, we will continue to build on the progress made in 2015. We will focus on delivering our financial commitments and expect to see the benefits of our 2015 work on cost optimization begin to crystallize. We aim to respond
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and
to meet the mission and the broader vision of the organization. Recognizing “Service Excellence” as the prime differentiator in a
improve our regulatory and public disclosures in order to improve transparency and consistency with stakeholder’s
market of homogeneous products and services, we continued to invest in people to enhance and upgrade their skill sets
expectations.
through various training programs at home and abroad.
positively to the evolving regulatory landscape. We have sought
to
constructively
The
engage
regulatory
and
our
regulators
emerging
business
environment will inevitably call for continued rigorous review and adaption of the mix and structure of the businesses of the Bank to ensure we generate sustainable returns. A healthy banking sector ensuring returns above the cost of equity is essential to economic growth. Vibrant economies need vibrant banks. It is, therefore, important to ensure that the rightly increased focus by the regulator on conduct supervision does not inadvertently result in the withdrawal of services and the restriction of choice. Another key focus over 2015 and the coming years are rebuilding the trust that customers, clients, and stakeholders have in our organization. We have pledged to increase transparency and conduct our business in the right way, as set out in our values. We need to better respond to the current needs and anticipate the future demands of our customers and clients as they become increasingly technology savvy.
Human Capital A strong employee focus has served us well over 20 years and we will continue to develop our employees to equip them for career progression in a rapidly evolving operating environment. There is a greater degree of specialization that will be required and our forecasted growth presents exciting opportunities for employees of talent, ability and ambition. We strongly believe that our unique culture, which is the commonality within, is the key differentiator in a very competitive market ensuring that we continue to maintain this edge. We always give the highest focus on the right placement of human resources. The bank believes in certain core values as practiced by all employees
Acknowledgements I take this opportunity to thank all of our customers for their cooperation and support over the years and the employees for their enthusiasm in embracing the changes that are being implemented throughout the organization. I also wish to thank the Board for their wise counsel and guidance in matters of governance and strategic direction which has set strong foundations for sustainable growth. I express my appreciation and thanks to all the regulators for their continuous help and assistance, valuable guidelines and co-operation provided to the Bank from time to time. I also thank to our external auditors’ who have given us their continuous guidance on different risk management and control aspects. In summary, 2016 will be a challenging year yet our firm commitment towards excellence with outstanding operational efficiency will make the bank stronger, set examples for others to follow and create positive differences. Sustainable business growth, dynamic and talented human capital driven by values, better risk management will surely command some key strength for Prime Bank. We believe that, as long as we adhere to the right strategy, take pro-active actions and move ahead with strongmindedly, the year will be full of hopes and harvests.
Ahmed Kamal Khan Chowdhury Managing Director
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DIRECTORS’ REPORT The Board of Directors of Prime Bank Limited has an immense
the poverty trap); reducing undernourishment and the amount
pleasure of presenting the Annual Report and the Audited
of underfed children under five years of age; accomplishing
Financial Statements for the year ended December 31, 2015
gender uniformity in primary and secondary education in both
together with the Report of Auditors to the Shareholders in
rural and urban areas; growing the net enrolment ratio at the
the occasion of 21st AGM of the Bank. A review of the report
level of primary schools; dropping infant mortality rates and the
would reveal satisfactory performance of the bank in a stiff
maternal mortality ratio; expanding the percentage of one-year
and competitive environment. A brief overview of the key
old children vaccinated against measles and polio; decreasing
performances of the world and Bangladesh economy during
deaths from malaria and tuberculosis in the provision of
2015 and outlook for 2016 are provided in this report.
improved drinking water. In order to attain more sustainable goals in the future, a more pragmatic approach should be taken
Global Economy
in developing specific goals, while taking into consideration the learning from MDGs – both the development and the lacking.
According to Global Economic Prospect Report by World Bank in January 2016, global growth is estimated at 2.4 percent in
According to experts, financing will be a major challenge for Bangladesh in achieving more MDGs in the future.
2015 and is projected at 2.9 percent in 2016. The pickup in global activity is projected to be more gradual than in the October 2015. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual further narrowing of output gaps. The picture for emerging market and developing economies is diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 201617. The projected pickup in growth in the next two years, despite the ongoing slowdown in China primarily reflects forecasts of a gradual improvement of growth rates in countries currently in economic distress, notably Brazil, Russia, and some countries in the Middle East, though this projected partial recovery could be frustrated by new economic or political shocks. Growth in advanced economies is projected to rise by 0.2 percentage
While the banking sector is still struggling to recover from the stumbling blocks originating from a number of large financial scams concerning some state owned and private commercial banks, unearthed in the recent past, political impasse has made the situation worse leading to unsatisfactory performance of the sector. The credit growths in the public sectors have always been volatile based on the actual financing needs of the government. Private sector credit growth has always remained stable particularly since the fiscal year of 2013 when the figure was 10.8 percent and has stood higher at 13.2 percent in 2015. The growth figure rose to 13.7 percent in November 2015. If the last fiscal year’s 13.2 percent credit growth could endow the economy with 6.5 percent output growth, a provision of 14.8 percent private credit growth appears to be adequate to achieve 7.0 percent output growth for the current fiscal year.
points in 2016 to 2.1 percent, and hold steady in 2017. Overall
Bangladesh can become an export leader, with its labor-
activity remains resilient in the United States, supported by still-
intensive manufacturing and service exports growing vastly on
easy financial conditions and strengthening housing and labor
a sustained basis. The countries exports crossed $31.2 billion
markets, but with dollar strength weighing on manufacturing
in 2015. Meanwhile, BGMEA has set an export target of $50
activity and lower oil prices curtailing investment in mining
billion by 2021 for the textile sector. Likewise, the leather sector
structures and equipment. In the Euro area, stronger private
anticipates that relocation of tanneries to the Savar Industrial
consumption supported by lower oil prices and easy financial
estate could enhance their export revenue from $1.0 billion
conditions is outweighing a weakening in net exports. Growth
to $5.0 billion in the next five years. Imports grew to 11.2%,
in Japan is also expected to be stable in 2016, on the back
accelerating from 8.9% in 2014. Larger imports of food, grains,
of fiscal support, lower oil prices, accommodative financial
machinery, fertilizer, and industrial raw material facilitated to
conditions, and rising incomes.
boost the development. The large growth in import was also due to the fall in oil prices during the year.
Bangladesh Economy Bangladesh has been maintaining an impressive track record on growth and development. In the past decade, the economy has grown at nearly 6 percent per year, and human resource development did go up hand-in-hand with economic growth. Bangladesh has done well in achieving as much as possible of the Millennium Development Goals (MDGs). Bangladesh has made quite significant progress in particular areas, like decreasing headcount poverty and the poverty gap ratio (above 45 percent of the extreme poor have been taken out of
Financial stability concerns attained high priority in Bangladesh as everywhere else worldwide. Stress testing exercises are now routine practices in Bangladesh as diagnostic and supervisory tools. Bangladesh Bank and all other financial sectors, capital markets, the insurance sector, regulatory authorities in Bangladesh hold regular quarterly consultations toward policy coordination upholding financial stability. To further expand the existing clientele, Bangladesh Bank advises all banks to send their officials to explore new lending opportunities which had not been cultivated yet. These clientele exploration initiatives warrant better connectivity between the lenders and the
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prospective borrowers who may not typically look creditworthy.
Sector Bank of Bangladesh established in Singapore with the
These initiatives will hopefully create more productive credit
approval of the Bangladesh Bank and the Monetary Authority
demand and new employment opportunities in the economy.
of Singapore.
Bangladesh aspires to be a middle-income country by 2021.
With permission from the Bangladesh Bank and registration of
This will require increasing GDP growth to 7.5 to 8 percent
Financial Services Authority, UK, another fully owned subsidiary
per year based on accelerated export and remittance growth.
of PBL, Prime Exchange (UK) Limited, started its operation from
Both public and private investment will need to increase
August 2010 in the UK along with its three branches in London,
as well. Growth will also need to be more inclusive through
Birmingham and Manchester. The company is engaged in
creation of productive employment opportunities in the
remittance business.
domestic economy. To sustain accelerated and inclusive growth, Bangladesh will need to manage the urbanization process more effectively, as well as prepare for adaptation to climate change impacts. Becoming a middle-income country
PBL Finance (Hong Kong) Limited, a fully owned subsidiary of PBL started its operation in September 2011. The main functions of the subsidiary are to advise, negotiate, confirm
will require substantial efforts on many fronts. These include
and provide discounting facilities against LCs originating from
strengthening revenue mobilization; tackling energy and
PBL and other banks in Bangladesh. The company also handles
infrastructure deficits; deepening financial-sector and external
remittance business.
trade reforms; improving labor skills, economic governance,
At present, the bank has been working with 145 branches
and urban management; and adapting to climate change.
including 18 SME branches. The introduction and expansion of ATM network, Internet Banking, SMS Banking, Phone Banking,
Brief History of PBL PBL started its journey in the year 1995 with the firm commitment of excellence in customer service with a difference. Its
Mobile Banking, Biometric Smart Card and KIOSK ushered a new era and PBL is now well poised towards sustainable development.
vision remained to be the best private commercial bank in quality, profitability along with strong liquidity.
Vision, Mission, Corporate Philosophy, Strategic Priorities and Corporate Conduct
PBL formally launched its business in April 1995 with one
PBL’s vision, mission, corporate philosophy, strategic priorities
branch at Motijheel Commercial Area, Dhaka. It started its
and corporate conduct are given in the beginning of the report.
Islamic banking operations in December of the same year. It
In achieving bank’s vision, mission and strategic priorities, the
Bangladesh in terms of efficiency, capital adequacy, asset
was listed with both the bourses of Bangladesh viz. Chittagong
highest level of ethical standards are maintained.
Stock Exchange and Dhaka Stock Exchange in 1999 and 2000 through initial public offering. PBL became primary dealer for buying and selling securities under the license issued by Bangladesh Bank in 2003. With the aim to offer innovative banking service to the Non Resident customers, PBL opened its first Offshore Banking unit in 2007 at DEPZ, Savar, a new dimension in its customer friendly business activities. The bank opened two more Offshore Banking Units at CEPZ, Chittagong and Adamjee EPZ, Narayangonj. It was registered as Merchant Banker with the Bangladesh Securities and Exchange Commission, Bangladesh in 2001 for starting its Investment Banking and Advisory services. As per directives and permission of the Bangladesh Bank, PBL converted its Merchant Banking and Investment Division (MBID) into a subsidiary in the name and style “Prime Bank Investment Ltd.” in 2010. With the view of business diversification in
Principal Activities The principal activities of the bank are banking and related businesses. The banking businesses include deposits taking, cash withdrawal, extending credit to corporate organizations, organizing syndication deals, retail and SME financing, trade financing, project financing, lease and hire purchase financing, credit cards, remittance services etc. The mode of banking includes both conventional and Islamic banking. The services are provided through both traditional and modern IT based products. The bank performs investment banking and advisory services through Prime Bank Investment Limited and brokerage services through Prime Bank Securities Limited. Bank’s subsidiaries at Singapore and UK are engaged in providing remittance faculties to expatriate Bangladeshis. PBL Finance (Hong Kong) Limited advises, negotiates, confirms and
mind, the bank also established another subsidiary company
provides discounting facilities against LCs originating from PBL
in the name and style “Prime Bank Securities Ltd.” to provide
and other banks in Bangladesh. The company also handles
brokerage services in the stock market.
remittance business. 3 (three) Off-shore Banking Units offers
PBL has also expanded its services cross border with a view to providing banking services globally. It opened its first fully
banking services involving foreign currency denominated assets and liabilities.
owned subsidiary ‘Prime Exchange Co. Pte. Ltd.’ in Singapore and started their operation from July 2006 to offer remittance
Business Process Centralization
service to Bangladeshi Nationals living in Singapore. This
As part of the strategy and in line with the philosophy that the
is the first ever fully owned Exchange Company of a Private
Customers are life-line of banking business, the Board had
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been at the heels of the Management for some time in 2015 for
percent of net profit before tax (BDT 110.08 million in 2015) as
migration to total centralization of the business process. Already,
donation to this foundation for undertaking projects in health
there is notable progress since this year (2015) wholesale
and education sector. Details of activities of the foundation are
banking based on Customers Relationship Management finally
given in “Prime Bank Foundation” chapter of this report. Apart
got a green signal from the Board of Directors leaving the
from the CSR activities taken by Prime Bank Foundation, the
branches to deal with the SME & Consumer banking segments
bank conducted various CSR activities during the year 2015,
in addition to carrying out the usual role of service delivery
details of which are given in “Green Banking” chapter of this
point. The primary idea is to maintain close liaison with the
Annual Report.
corporates for delivery of customized products and services and at the same time streamlining the processing matters for
Corporate Governance
reducing lead time for loading limit in system and making final disbursement.
The bank adheres strictly to the regulatory guidelines on corporate governance. Disclosures on corporate governance
Another reason for preferring centralization process is the distinguishing feature of constant liaison with the corporates
are provided in the “Corporate Governance” chapter of this Annual Report.
under a defined relationship which of its own draws monitoring responsibilities of the Relationship Officers/Managers. Thus it reduces the chance of deteriorating asset quality in the form
Human Resources
of NPL. Therefore, our valued stakeholders could take note of
PBL is working with a vision of converting human resources
the revelation that NPL issue shall be strongly plugged down.
into human capital through appropriate knowledge, skills, abilities and personal attribution. A healthy environment has
Delegation of Business authority: Simultaneously, in order to concentrate on the policies and large loan issues alone as per central bank’s guidelines, Board decided to delegate more Business authority to the Management and the Executive Committee of the Board in conformity with the vision of centralization. The Board took
been created where employees enjoy working with pride. Believing that the human resources are main elements behind the success and long term sustainability of the Bank, the Bank is developing and motivating the workforce with contemporary HR policies and attractive benefits. The Bank is not only offering a job but also learning, challenging and rewarding career.
all these decision considering the requirement of professional due-diligence exercise for the diversified business propositions
Adequate Accounting Records
received at the different counters of the bank. The idea is to
The directors’ responsibilities also include overseeing whether
also to allow flexibility in dealing with customers’ requirements
adequate accounting records are being maintained, an
in line with the vision of becoming customer-centric.
effective system of risk management is working in place, and preparation of the supplementary schedules has been done
Risk Management
for inclusion in these Financial Statements. The directors have
PBL has always being in the forefront of implementing
also made an assessment of the Bank’s ability to continue as a
different risk management tools and techniques. The “Risk”
going concern and have no reason to believe that the business
of any banking institution may be defined as the possibility of
will not be a going concern in the years ahead.
incurring losses, financial or otherwise. Banking business is in fact a business of risk taking. So it is vital to manage all these risks efficiently. In today’s challenging financial and economic environment effective risk management is must for sustainable growth in shareholders’ equity. In banking arena, key risks include credit, market, operational, liquidity, reputation risk and other risks like strategic risk, concentration risk, compliance risk etc. The risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. Details of risk management are given in the “Risk Management” chapter of this Annual Report.
Corporate Sustainability In respect of corporate sustainability, PBL has focused on following specific key areas namely, nation building, enhancement of market place, promotion of the work place, support to the community and protection of environment. PBL established “Prime Bank Foundation” and contributes 4
40
Accounting Policy and Implementation of BAS/ BFRS Board of Directors are responsible for the preparation and fair presentation of the Bank’s Annual Financial Statements, comprising the Balance Sheet as at 31 December 2015, and the Profit & Loss Account, Cash Flow Statements, Statement of changes in equity for the year then ended, and the notes to the Financial Statements, which include a summary of significant accounting policies and other explanatory notes, and the Directors’ report, in accordance with Bangladesh Financial Reporting Standards (BFRS) and in the manner as required by the Bank Company Act 1991 (as amended up to 2013) and the Companies Act 1994. The
directors’
responsibilities
also
include
designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of these Financial Statements that are free from material misstatement, whether due to fraud and error; selecting and applying appropriate accounting
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
policies; and making accounting estimates that are reasonable
ratio, adequacy of bank’s liquidity as per structured liquidity
in the circumstances.
profile, regulatory reserves and has performed stress testing to determine bank’s shock absorbent capacity in different
Internal Control System
scenario. All the ratios and results thus calculated reveal that Prime Bank is running well above the level of different
Board of directors have the responsibility for approving the
parameters set by the respective guideline of Bangladesh Bank.
review of overall business strategies and significant policies of the bank; understanding the major risks run by the bank, setting acceptable levels for these risks and ensuring that
Control Environment
senior management takes steps necessary to identify,
Control activities are the policies and procedures which help
measure, monitor and control these risks; Senior management
ensure that management directives are carried out, and the
have the responsibility for implementing strategies and policies
necessary actions are taken to minimize the risks of failure
approved by the Board; developing processes that identify,
to meet stated objectives. Policies and procedures are
measure, monitor and control risks incurred by the Bank;
effectively established within the Bank and are continuously
maintaining an organizational structure that clearly assigns
reviewed for compliance, adequacy and improvement
responsibility, authority and reporting relationships; ensuring
opportunities.
that delegated responsibilities are effectively carried out;
The Board of Directors sets the tone for an effective control
setting appropriate internal control policies; and monitoring
environment through regular reviews of the processes for
the adequacy and effectiveness of the internal control system.
identifying, evaluating, and managing significant risks. The
An effective internal control system also requires that an
Standard Operating Procedures (SOP) are signed off by
appropriate control structure is set up, with control activities
each Head of Department to provide assurance that these
defined at every business level. These include: top level
standards are communicated, understood and complied with.
reviews; appropriate activity controls for different departments
An effective Control environment is set by top management
or divisions; physical controls; checking for compliance with
and cascades across all business functions. Every year the top
exposure limits and follow-up on non-compliance; a system of
team conducts a self-assessment of key controls that affect
approvals and authorizations; and a system of verification and
the business and develops action plans to make the internal
reconciliation.
control environment more robust.
Standards of Reporting
Supplier Payment Policy
The financial statements have been prepared in accordance
Prime Bank follows a set of payment polices for all suppliers.
with Bangladesh Financial Reporting Standards (BFRS)
While selecting vendors as per the methods prescribed in the
as adopted by The Institute of Chartered Accountants of
bank’s Procurement Policy, payment terms and conditions
Bangladesh and applicable provisions of the Bank Company
are communicated explicitly before issuing work order or
Act 1991 (as amended up to 2013) and the Companies Act
purchase order. Bills are paid according to the payment terms
1994. Managenment accepts responsibility for the integrity
and withholding taxes are deducted from bills as per law. As of
and objectivity of these financial statements, as well as for
date there is no legal case filed by the Bank or filed against the
various estimates and judgments used therein. The estimates
Bank by any supplier.
and judgments relating to the financial statements have been made on a prudent and reasonable basis so that the financial statements reflect the financial operations of the Bank in a true
Business Review
and fair manner.
Going Concern Going concern is one of the fundamental assumptions in accounting on the basis of which financial statements are prepared. Financial statements are prepared assuming that
Review of Operations, Products and Services of PBL Review of operations along with products and services of the bank has been given in “Management Discussion and Analysis”, and “Products and Services” chapters in this report.
a business entity will continue to operate in the foreseeable future without the need or intention on the part of management
Prime Bank Investment Limited
to liquidate the entity or to significantly curtail its operational
PBL was registered as Merchant Banker with the Bangladesh
activities. Therefore, it is assumed that the entity will realize
Securities and Exchange Commission, Bangladesh in 2001 for
its assets and settle its obligations in the normal course of
starting its Investment Banking and Advisory services. As per
the business. It is the responsibility of the management of a
directives of the Bangladesh Bank, PBL converted its Merchant
bank to determine whether the going concern assumption
Banking and Investment Division (MBID) into a subsidiary in the
is appropriate in the preparation of financial statements. The
name and style “Prime Bank Investment Ltd.” in 2010. During
management of Prime Bank has calculated all the ratios related
the year 2015, the company made operating loss of Tk 15.14
to the maintenance of regulatory capital, LCR, NSFR, Leverage
million compared to profit of Tk 18.79 million in 2014.
41
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Prime Bank Securities Limited “Prime Bank Securities Ltd.” was established to provide brokerage services in the stock market. During the year 2015, the company made an operating loss of Tk 35.12 million as against Tk 28.23 million in 2014.
Processing Zone (DEPZ), Chittagong Export Processing Zone (CEPZ) and Adamjee Export Processing Zone (AEPZ). The total loans and advances of three OBUs reached to USD 159.44 million equivalents to BDT 12,516 million as on December 31, 2015 compared to USD 110.74 million equivalents to BDT 8,632 million as on December 31, 2014 recording a growth of 45 percent. During the year 2015, OBUs made operating profit of
Prime Exchange Co. Pte. Ltd., Singapore
USD 1.65 million equivalents to BDT 128.97 million as against
The company operates with two branches in ‘Desker Road’
USD 1.71 million equivalents to BDT 132.34 million in 2014 with a
and ‘Jurong East’ complying with the regulations of both
negative growth of 3 percent.
Bangladesh Bank and Monetary Authority of Singapore (MAS). Growth in business of the company was possible due to marketing efforts, personalized service, efficient service platform under “RemitFast’ software and enhanced distribution network. The company significantly declined business in 2015. Total volume of remittance was SGD 87.76 million in 2015 compared to SGD 102.60 million in 2014. The company made profit before tax of SGD 99,987 in 2015 compared to SGD 269,438 in 2014.
Capital Management Capital management of the bank is based on the objective to maintain an adequate capital base to support the projected business and regulatory requirement. This is done by drawing an annual planned business growth vis-à-vis capital requirement. PBL recognizes the impact of shareholders’ returns on the level of equity and seeks to maintain a prudent balance between Tier-I and Tier-II capital. As per directives of Bangladesh Bank, the banks are required to maintain
PBL Exchange (UK) Limited
minimum total capital at 10.00 percent of risk-weighted
The company has been operating with three branches in
assets under Basel-III. Tier-I capital should be minimum 5.5
London, Birmingham and Manchester throughout the year. The
percent of total capital.
business volume has marked growth despite stiff competition. The volume of remittance was GBP 19.77 million in 2015 which was GBP 22.38 million in 2014. The company incurred operating loss of GBP 9,992 in 2015 compared to operating loss of GBP 15,303 in 2014. The subsidiary has taken some pragmatic steps for further acceleration of business growth.
The bank’s capital fund is divided into two parts- Tier-I and Tier-II capital. Tier-I includes the equity (paid-up capital, share premium, statutory reserve and retained earnings) and Tier-II includes general provision on unclassified loans and advances, revaluation reserves, unsecured subordinated debt and exchange equalization account. Total consolidated
PBL Finance (Hong Kong) Limited
capital fund of the bank increased by Tk 1,878 million and stood
Total assets of the company reached to HKD 160.04 million
at Tk 29,302 million during 2015. Tier-I capital grew by Tk 388
as on December 31, 2015 compared to HKD 231.08 million
million and stood at Tk 22,999 million during the year under
on December 31, 2014. The company made a net profit after
review. Total consolidated capital fund is equivalent to 12.69
tax of HKD 7.08 million in 2015 compared to HKD 5.50 million
percent of total risk weighted assets. More details regarding
in 2014. The main functions of the subsidiary are to advise,
capital management are given in the “Market Discipline-
negotiate, confirm and provide discounting facilities against
Disclosures on Risk Based Capital (Basel-III)” chapter of this
LCs originating from PBL and other Bangladeshi Banks. The
Annual Report.
company also handles remittance business. The company has been run by executive and officials having diverse experience in foreign trade business both in Hong Kong and
Financial Analysis
Bangladesh.
Total Assets Performance of PBL
Consolidated assets of the bank stood at Tk 253,474.40 million
The Bank has maintained satisfactory growth of asset and
in 2015 as against Tk 256,349.33 million in 2014. Total assets of
liabilities in spite of challenges during the year 2015. Trade
PBL stood at Tk 252,161.23 million in 2015 from Tk 254,912.20
finance and other ancillary businesses recorded considerable
million in 2014.
growth in spite of all odds and economic turmoil. The bank further expanded its branch network and alternate delivery channels. New IT based products and services were introduced.
Cash and Balance with Bangladesh Bank & its Agent Consolidated position of the Bank is Tk 17,518 million in 2015 as against Tk 17,560 million in 2014. PBL’s position decreased
42
Offshore Banking
from Tk 17,535 million in 2014 to Tk 17,461 million in 2015
PBL is offering Offshore Banking facilities through 3 (three)
due to increase of loans and advances and also decrease
Offshore Banking Units (OBU) located in Dhaka Export
of deposits.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Balance with institutions
C o r p o ra t e G ove r n a n c e
other
banks
and
financial
Borrowings from other institutions and agents
banks,
financial
Consolidated position of the bank is Tk 2,011 million in 2015 as
The borrowing of PBL stood at Tk 10,442 million which
against Tk 1,604 million in 2014. PBL’s position increased from
represents PBL’s borrowing against PBL Bond, call borrowing,
Tk 1,513 million in 2014 to Tk 1,958 million in 2015.
repo of treasury bills and refinance against SME loan from Bangladesh Bank. The borrowed amount was mainly used for
Investment
purchasing Treasury Bills/Bonds which were devolved on the
PBL’s investment decreased during the year by Tk 9,909 million
bank in excess of SLR requirement.
and stood at Tk 62,733 million as at 31 December 2015.
Loans and Advances / Investments
Deposits
Consolidated loans and advances/investments (credit under
In 2015, total deposits of the Bank stand at Tk 194,825 million
Islamic Shari’ah) of the bank stood at Tk 154,871 million in
which was Tk 204,838 million in 2014. The Bank continued its
2015. Loans and advances of PBL was Tk 151,865 million
efforts for mobilization of low cost and no cost deposits for
during 2015. Investment of Islamic banking branches was
which 4 percent increased of no cost and low cost deposit
Tk 11,215 million and with growth of 2.88 percent during
compared to last year. However, high cost deposit were
2015. Outstanding loans and advances of off-shore banking
shelled out to reduce interest expenses and better treasury
units was Tk 12,516 million showing a growth of 45 percent.
management.
Concentration of loans and advances was well managed and details of credit are given at notes to accounts no. 7(a).5. ratio of non-performing loan of PBL was 7.82 percent which was
Shareholders’ Equity
much below the industry average of 8.79 percent.
PBL’s shareholders’ equity increased by 8 percent during 2015. Paid-up capital of PBL stood at Tk 10,293 million during
Liabilities
2015. The statutory reserve increased by Tk 550 million
Consolidated total liabilities (excluding equity) of the bank
during the year and stood at Tk 8,735 million. Distributable
stood at Tk 226,971 million in 2015 as against Tk 231,768 million
profit stood at Tk 1,836 million during the year. The strong
in 2014. The total liabilities (excluding equity) of PBL stood at
growth in shareholders’ equity will help the bank to expand
Tk 225,746 million in 2015 whereas it was Tk 230,451 million in 2014.
its business.
Key financial figure of the Balance Sheet is given below: Particulars
Amount in million
2015
2014
2013
2012
2011
Assets
252,161
254,912
243,869
236,833
199,950
Deposit
194,825
204,838
201,907
182,053
159,816
Loans & Advances
151,865
147,367
153,589
160,890
138,848
Shareholder’s Equity
26,415
24,461
23,030
20,787
19,095
Analysis of Income Statement of PBL
Amount in million
Particulars
2015
2014
Change
Interest Income
15,551
18,446
-16%
Interest Expense
(14,257)
(15,574)
-8%
Net Interest Income
1,294
2,872
-55%
Non-Interest Income
10,779
9,034
19%
Operating Expenses
6,166
5,750
7%
Profit before Provision
5,906
6,157
-4%
Profit before Taxes
2,752
3,280
-16%
Net Profit after Taxes (NPAT)
2,139
2,393
-11%
Earnings Per Share (Taka)
2.08
2.32
-11%
43
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Interest Income
Total Operating Income
PBL’s interest income decreased by 16 percent during 2015.
Due to the reasons explained above, total operating income of
Interest earned from loan and profit earned on investment
the bank decreased by 4 percent during the year and stood at
remained the principal component of interest income. Yield on
Tk 5,906 million.
loans and advance was 10.57 percent in 2015 as against 12.62 percent in the previous year.
Interest Expense
Total Operating Expense Total operating expenses of PBL increased by 7 percent during the year mainly due to increase in personnel and
PBL’s interest expense decreased by 8 percent during 2015.
other operating expenses. To match with the growth of
Interest cost on deposits was the main component of interest
SME and retail business and branch expansion a number
expenses whereas interest cost on borrowings also had a
of manpower was recruited along with sales force. PBL also
significant impact in 2015. Interest cost of deposits decreased
made donation amounting to Tk 110.08 million to Prime
to 6.64 percent in 2015 from 7.36 percent.
Bank Foundation to carry on various CSR activities. PBL also focused on developing brand image and increased
Investment Income
promotional and advertisement expenses. This strategy added value to the business. The bank’s cost income ratio
PBL’s investment income consists of interest / discount earned on treasury bills / bonds, gain on government security trading, dividend received on shares and capital gain from sale of securities of listed companies. Investment income increased by Tk 1,794 million during the year registering a growth of 29 percent over the previous year. Since PBL is a primary dealer,
was 51.08 percent in 2015 which slightly increased from 48.29 percent in 2014 due to increased investment in branch expansion and development of IT infrastructure. Considering the factors stated above, the ratio indicates the satisfactory operating efficiency of the bank as per the industry standard.
securities were devolved by the Bangladesh Bank in excess of SLR requirement. As such interest/discount income became the main contributor to investment income.
The productivity of the employee continued to grow which is evident from the following ratio:
Amount in million Particulars
2015
2014
Income per employee
4.11
4.15
Expense per employee
2.10
2.01
Profit before provision per employee
2.01
2.15
Profit before tax per employee
0.94
1.14
Assets per employee
85.94
88.91
Provision for Classified Loans The provision against classified loans increased during the year due to change in loan classification and provisioning policy by
the Bangladesh Bank. Total provision against classified loan was Tk. 2,690 million during 2015 as against Tk. 2,644 million of previous year. Provision adequacy ratio was 100.14 percent.
Particulars
2015
2014
NPL ratio
7.82%
7.61%
Industry average of NPL ratio
8.79%
9.69%
100.14%
100.38%
Provision adequacy
General Provision Provision against unclassified loans was made to the tune of Tk 293 million during 2015 as against Tk 114 million of previous year. General provision requirement of Tk 68.40 million on
Tk38 million during the year. This is to be noted that general provision is regarded as Tier-II capital of the bank and provides safeguard against future default as well as supports business growth by strengthening the capital base.
off-balance sheet outstanding has been provided. Provision
Adequate provision was made to the tune of Tk 7 million for
against unclassified loans of off-shore banking units was made
diminution in value of investment in shares arising from the volatile capital market.
44
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Other Provisions Upon assessing the recovery prospects, the bank made full
C o r p o ra t e G ove r n a n c e
an amount of Tk 550 million has been transferred to statutory reserve.
provision against protested bills and claims originated during the course of banking operations amounting to Tk 18 million and
Dividends
amount of Tk 31 million has been made against the provision of
Thus fund available for distribution is Tk 1,836 million
impairment loss of equity investment in subsidiaries. Bank has
(Tk1,589 million from current year profit plus Tk 247 million
also maintained provision against climate risk fund and rebate
from retained earnings of previous year). In order to maintain
to good borrower as per regulatory directives.
a satisfactory capital adequacy ratio of the bank, the Board decided to recommend 15 percent cash dividend for the year
Net Profit before Tax After making above provisions, net profit before tax of PBL
2015. Satisfactory capital fund will enable the bank to increase business activities.
stood at Tk 2,752 million registering a negative growth of 16 percent.
Remuneration of Directors The Bank does not pay any remuneration to its Directors. As per
Provision for Income Tax Provision against current year income tax of PBL was Tk 713 million compared to Tk 1,180 million of preceding year.
the BRPD circular no.03 dated 18/01/2010 and BRPD Circular letter no. 11 dated 04/10/2015 that the Chairman may be provided car, telephone, Office chamber and private secretary. In addition to above, Directors are entitled to fees and other benefits for attending the board, EC, Audit Committee and
Net Profit after Tax
Shariah supervisory committee meeting. Managing Director is
Net profit after tax stood at Tk 2,139 million registering a
paid salaries and allowances as per approval of the Board and
negative growth of 11 percent during 2015. Earnings per share
Bangladesh Bank.
decreased to Tk 2.08 as at December 31, 2015 from Tk 2.32 in the previous year. Average ROA and ROE stood at 0.84 percent and 8.41 percent respectively.
Shareholders’ Value PBL remains fully committed to delivery of higher shareholders’ value. The high profitability track record underpins the value
Statutory Reserve
the shareholders derived from investing in the shares of PBL.
As per Bank Company Act 1991, 20 percent of profit before
The earnings per share decreased and stood at Tk 2.08 and
tax is required to be transferred to statutory reserve. As such
return on average equity stood at Tk 8.41 during 2015.
Summary of the financial performance of PBL Amount in million Particulars
2015
2014
Loans and Advances
151,865
147,367
Investments
62,733
72,642
Fixed Assets
6,516
6,613
Total Assets
252,161
254,912
Deposits
194,825
204,838
Paid-up Capital
10,293
10,293
Shareholders' Equity
26,415
24,461
Operating Profit
5,906
6,157
Net profit after Tax
2,139
2,393
EPS (Taka)
2.08
2.32
45
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Meeting of the Board
Annual General Meeting
During the year 2015, 15 Board Meetings were held.
21st Annual General Meeting of the Bank will be held on Tuesday, 26th April, 2016 at KIB Complex, Krishi Khamar Sarak at 10.00
Appointment of Auditors
a.m. and in this connection Directors’ Report and financial statements were approved in the 445th Board Meeting held on
ACNABIN and Syful Shamsul Alam & Co., Accountants were
21 March 2016 for presentation to the shareholders.
appointed in 20th AGM for the year 2015. Accordingly, they have completed their audit work. Now we require appointing
On behalf of the Board of Directors
auditors for the next financial year. The existing audit firm is eligible for reappointment and they have expressed their willingness to be reappointed for the next year 2016.
46
Chairman Board of Drectors
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
MANAGEMENT DISCUSSION AND ANALYSIS Banking sector has been facing struggle because of weak
at 4.75 per cent from 5.25 per cent. Currently, outstanding
asset quality, low capitalization and profitability. Profitability
total foreign-currency loans stood at around US $8.0 billion.
and solvency will remain key challenges due to weak standards of corporate governance and immature risk management
The outstanding amount of foreign-currency credits includes loan extended by Offshore Banking Units (OBUs) of local
systems. However, the improved political climate should be
and foreign commercial banks and direct borrowing by the
positive for the business environment, which will in turn help
corporate entities. The total outstanding loans with the private
to boost credit growth, a rise in domestic security threats pose
sector rose to BDT 5,846.15 billion in December 2015 from BDT
downside risks. Our banking system is made up of 56 banks,
5,091.05 billion in the same month of 2014.
which include six state-run commercial banks, two specialized banks, 39 private commercial banks and nine foreign banks. Based on total deposits, the six state commercial banks accounted for 28.3 percent of the market in June 2015. The state banks have been losing their market share to private sector players over the years, although they are still the dominant players.
Twelve-month average CPI inflation in Bangladesh has shown a slowly declining trend for the last couple of years. Inflation, which was 7.28 percent in July 2014, gradually fell to 6.19 percent in December 2015, suggesting further decline owing to decreasing fuel and commodity prices. However, the main driver of this decline in average inflation is mainly attributable to the falling food inflation while non-food inflation shows an
Under the Basel-III framework, banks are legally required to maintain a capital to risk-weighted assets ratio (CRAR) of at least 10 percent and tier-1 capital ratio of at least 6 percent. Although the banking sector as a whole is able to maintain its CRAR above the minimum legal requirement, nine out of the 56 banks were non-compliant, and the banking sector aggregate CRAR stood at just 10.3 percent as of June 2015, just above the official requirement. Citing a stress test conducted by the central bank, BMI Research said an increase in NPLs by 3, 9, and 15 percent would result in the failure of 7, 21 and 29 banks, respectively. Moreover, if just the three largest borrowers of each bank were to default, 26 banks would become non-compliant in maintaining their minimum required CRAR. This highlights the vulnerability of the banking sector as a whole to moderate shocks, poor risk management and high concentration risk due to uneven distribution of loan exposures.
upward tendency. Food inflation of as high as 8.55 percent in July 2014 slid down to 6.05 percent in December 2015 while non-food inflation of as low as 5.41 percent kept on rising to reach 6.41 percent over the same period. Core inflation that excludes both food and fuel components rose from 6.28 percent in July to 6.79 percent in December 2015. The forecast by the Bangladesh bank’s research team finds an inflation rate of 6.07 percent in June 2016. The pay rise in the government sector is likely to raise prices at least through expectations and the fuel price adjustment by the government, if executed as committed, is likely to pull prices downward.
The private sector credit growth rose to 14.19 per cent in
An increasing trend in Non-performing loan (NPL) has been observed since FY2012 when NPL’s share of rose to 10.03 percent in total outstanding loans. This has further escalated to 12.8 per cent at the end of third quarter of 2013 (September 2013), the highest since FY2009. Many of the related targets are off-track with indiscipline featuring in several banks. The
December, 2015 on a year-on-year basis from 13.72 per cent in November last, according to the Bangladesh bank latest statistics. The credit growth was 13.22 per cent in October. Currently, corporate entities prefer local currency loans along with foreign currency ones because of falling trend of interest
NPL of the banking sector came down to 8.79% at the end of December 2015 from 9.70% at the end of December 2014, but in terms of volume, NPLs increased by 2.42% compared to last year, despite rescheduling and large loan restructuring by the central bank to tackle the problem. The volume of NPLs rose
rates on lending. Most of the banks are now offering singledigit interest rates on lending to encourage good performing borrowers particularly corporate clients for expediting their business activities. Bangladesh Bank earlier set the ceiling for private-sector credit growth at 14.80 per cent for the January-
to Tk. 51,371 crore as on December 31 from Tk. 50,166 crore a year before. At the close of the year our NPL 7.81% as against an industry average of 8.79%. However, stronger recovery drives by the banks and the rescheduling of loans pushed the volume of non-performing loans in the banking system
June period 2015-16. Earlier on January, Bangladesh Bank slashed the policy rates aiming to spur investment, particularly in productive sectors for achieving maximum economic growth by the end of this fiscal year. Interest rate on repurchase agreement (repo) came down to 6.75 per cent from 7.25 per cent on 14 January last while the reverse repo rate was re-fixed
onto a downslide towards the year end. The classified loans cover substandard, doubtful and bad/loss of total outstanding credits which stood at Tk. 584,615 crore as on 31 December, 2015 (2014: Tk. 509,105 crore) and the total amount of classified loans with 39 private commercial banks (PCBs) came down to Tk. 20,760 crore (40.41% of total classified loans).
47
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Corporate Banking
officials of GCU team handled credit proposals and were
In line with the countries movement towards developing the
with regulatory issues and guidelines under a well-defined
country from its present rank, Prime Bank Limited branded itself
structure. After getting request/proposal from branches,
as the country’s leading corporate base by providing a wide range of financial services, products and offering specialist
proper scrutiny is done by GCU and then it places it to the competent authority for approval. GCU has been maintaining
advice to corporate clients to meet assorted demands of
an enviable standard of credit processing. Team members also
shifting market scenario as well as emerging markets. PBL has
kept communication with customers from Head Office end to
enhanced its footprints into Edible Oil Refinery, Vessel financing,
get more understanding on business needs, so that the proper
Packaging, Food, Power, Construction, Glassware, Healthcare, Renewable Energy, Plastic Polymer, Telecommunications,
banking solution could be provided.
engaged with processing the proposals while complying
Agri-Business (Poultry, Food Processing), etc. in addition to traditional industries like RMG, Steel, Pharmaceuticals, Textiles,
Prime Bank Ltd. has a sizable portfolio in Export financing to
Ship Breaking & Trading sector. 1.27%
9.30%
RMG Textile
16.30%
Food and allied industries Pharmaceutical industries
8.42% 8. 8
Chemical, fertilizer, etc.
8.36%
Industrial Segment
Cement and ceramic industries Ship building industries
1.17% 0.70% 6.25% 1.38%
41.10% 0% 0%
2.47% 3.28%
Ship breaking industries Power and gas Other manufacturing or extractive industries Service industries Others
43.05%
16.35%
Industry
support the growing and important textile and Readymade Garments (RMG) sectors of the country. The Unit was formed to take challenge of serving exporters with a specialized team to add value and support 100% export oriented customers. Export contributes around 21% of Country’s GDP and readymade garments contribute 81% of the export earnings. Home Textile, Sweater, knit and other specialized factories are getting prompt support to get various banking services and assistance from this unit. With 28 Authorized Dealer (AD) branches and 3 Off-shore Banking Units (OBUs), PBL is well equipped to serve the country’s export oriented industries. RMG Monitoring Team has been set up under Export Finance Unit for better understanding & monitoring of the business and quick transaction support. It is mentionable that total Export Finance for the year was Tk. 585.36 Crore.
Construction
9.10%
Corporate Exposure
Power, Gas, Water, Sanatory Services Transport, Storage and Communication Trade Services
16.22%
Housing Sevices
4.11% 0.16%
Professional and Miscellenious Services 11.01%
Corporate Banking provided services to its corporate clients through quite a few wings throughout the year, until the formation of Corporate & Institutional Banking and Commercial Banking divisions in October 2015. Brief description of the units under Corporate Banking Division is as under:
General Credit Unit (GCU) General Credit Unit was formed considering the nature of credit appraisal and type of clients. General Credit serves through two units, one is GCU-1 and another is GCU-2. These units handle proposals other than Export and Lease & Structured Finance. These units were dealing with essential commodity trading and processing, construction, pharmaceuticals, telecommunications, real estate, work order financing (for construction of roads, highways, bridges, jetty, embankment, rehabilitation and new construction of railway lines etc.), ship building, ship breaking, manufacturing and steel re-rolling, renewable energy, health etc. The experienced and trained
48
Export Finance Unit (EFU)
Structured Finance Department Structured Finance Department (SFD) offers customized, flexible and tailor made financial solutions to the customers and strives to ensure financing package in a cost-effective manner. SFD team specialized in syndicated and project financing with a focus on infrastructure, industrial and service oriented projects as well as structuring of facilities depending on nature of individual project. During 2015, SFD successfully raised subscription of BDT 2,400 million against 3 (three) Commercial Papers to meet the need of the customers. SFD worked as the Arranger & Agent of the Commercial Paper (“CP”) of BDT 1,000 million, BDT 1,100 million and BDT 300 million issued by Nasir Glass Industries Ltd., Bay Developments Ltd. and Star Ceramics Ltd. respectively. Pertinent to mention here that all the above three Commercial Papers were first of its kind as those were rated by Credit Rating Information and services limited (CRISL). To protect the RMG factories from unforeseen loss, SFD in collaboration with International Division, received USD 10 million from International Finance Corporation (“IFC”) to support RMG factories to implement corrective action plan (CAP) for Structural, Electrical and Fire Safety of Accord or Alliance under RMG Remediation finance. At the end of 2015, SFD arranged signing of Long Term Financing Facility in USD under Financial Sector Support Project (FSSP) between Prime Bank Ltd. and Bangladesh Bank to provide long term financing to private sector firms, mainly midsize manufacturing firms.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
SFD earned fee income of BDT 16.0 million in the form of
At the end of the year 2014, the lease finance portfolio of the
Arranger’s Fee and Agency Fee during 2015.
Bank stood at Tk. 4.90 billion. Prime Bank Limited offers lease finance facility against the following items: a.
Capital Machinery required for industrial unit
b.
Capital Machinery required for BMRE of the existing industrial units
c.
Medical Equipment for Laboratories, hospitals etc.
d.
Elevators, Central Air Conditioners, Generators etc.
e.
Vehicles including luxury coach, bus, minibus, micro-
Financial Sector Supporting Project (FSSP) agreement signing
Clinics,
Pathological
bus trucks etc. & f.
Construction Equipment
Apart from this, the Bank extended loans to 12 Non-Banking Financial Institutions (NBFIs) against which total outstanding was Tk. 479.84 Crore at the end of the year 2015.
Trade Services
Financing of Sea Pearl Hotel in Coxs Bazar
Lease Finance Unit
Prime Bank Ltd. has successfully set and made fully operational of the centralized Trade service operation of the Bank. At present Trade Service Division has centralized Import and Export activities of all Branches of the Bank through three service points namely: Motijheel Hub, Gulshan Hub and Chittagong Hub.
With a view to further strengthening and making it more effective, the bank has formed a separate Lease Finance Unit under Corporate Banking Division which commenced operation since 2001. Leasing is a method of financing for acquisition of capital machinery/equipment/vehicles involving a contractual relationship in which the Lessor grants exclusive right to the Lessee to use the machinery/equipment for a stipulated period of time in exchange of a series of rentals. Thus, leasing enables the lessee to avail the uses or services of a machinery/equipment without investing his own fund. Lease Finance yields comparatively higher rate of return. Moreover, lease financing is a secured form of credit as the bank retains
Trade Service Division (TSD) is running with a team of dedicated and qualified bankers who are well conversant in International Trade & Foreign Exchange Business. At present, Trade Service Division supports both AD and Non AD Branches of the Bank by opening all forms of LCs, issuing Shipping Guarantees, handling Import Documentary Collections, advising LCs, purchasing or negotiating Local & Foreign Export Documents and handling of Export Documentary Collections.
the ownership of the leased items.
internal controls adherence to the highest level of standards and compliance. It has increased visibility on transaction and supervision at a Centralized point lead to mitigation of risks.
Lease Finance unit under Corporate Banking Division is also taking care of the NBFI (Non-banking Financial Institution) and finance to the reputed and sound institutions considering growth and NPL position. Lease Finance Unit of the Bank undertakes the following activities: I.
To diversify credit portfolio for minimizing investment risk.
II.
To add more value to the investment since yield is higher compared to other mode of finance.
III.
To reap the benefits as a financial service provider having an edge over other leasing companies operating in the country, who have to tap resources from banks at a bit higher price.
IV.
To take an effective role in the industrial development of the country.
V.
To help generate employment opportunities by providing financial assistance to different projects promoted by entrepreneurs and professionals.
With the Centralization of Trade Services, TSD is offering improved customer services and Trade Finance offerings can be ably extended even to low volume branches leading to pooling of resources and reduced operational costs, ensuring
Trade finance processes have not been optimized sufficiently due to paper-based practices slowing down key processes such as discrepancies handling. Staff with the requisite skills may not be present at all branches, and deploying trade specialists for low volume branches may not always be economically viable. This necessitates centralization of Trade Finance operations. Letters of Credit, Collections, are the various common methods for providing documentary credit for domestic and cross-border trade. The process involves indepth credit analysis, and the criteria for evaluation may differ each time. Multiple approvals are required for LC processing, and exception handling - back and forth - is an issue. Pressure from competitors has made it imminent for the process defined to be agile and flexible, adaptable to the dynamic market environment. Cross-boundary trade is heavily government regulated - which mandates compliance and necessitates comprehensive control and monitoring of operations.
49
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Branch.
Key Benefits
Centralized trade operations with trade finance processing at a central hub
Trade business can be extended at the doorstep of all branches
Divisions have poured its best to erect its foundation. This very short period is marked by guideline fixation, setting up job description, workforce allocation, workstation arrangement,
With ease of implementing new products, new revenue generation opportunities are envisaged
file transfer, visiting most of the customer, meeting with customers, fact sheet preparing of every customer etc. done in addition to its regular vocation of renewal, enhancement or
Better reconciliation and effective financial control
Compliance, monitoring of transaction and uniformity
There have been numerous meetings and visits with customers
in transactions in line with the International Banking
by these divisions. Our customers have already got the taste
standard practice and regulations of Central bank and other Govt. authorities.
of prompt service despite not having a ‘single place’ in Head
Corporate Liability Marketing and Cash Management Unit Corporate liability marketing and cash management serves as the means to keep an organization functioning by making the best use of its cash or liquid resources. At present the department is regularly sourcing cash management business from Govt. agencies, Large local corporate, MNCs, NBFIs, Universities, Schools, TELCOs, Banks, NGOs, etc. Cash management solutions thus help customers in managing liquidity, payments, collection, reconciliation and MIS. Prime Bank has leveraged collection and payment services in different sectors of the country. In addition, the team also provides a wide range of corporate fund management solutions for business houses using the most vibrant technology in Bangladesh.
Corporate and Institutional Banking, Commercial Banking and Transaction Banking Divisions Customer Relationship Management centric module of banking business is becoming the buzzing phrase at these days, where many are still hanging on and must come and where we have endeavored to enter. Prime Bank has been signing up to Centralized Banking module from conventional Branch Banking module to keep pace with global standard banking practice, the ultimate destination. The structure is as under: CORPORATE BANKING
Corporate & Institutional Banking Division
Commercial Banking Division
Transaction Banking Division
Corporate Banking divided into 03 segments duly approved by the Board. To materialize the dream of Centralization of Corporate Business module as bided by the Board of Directors within the set forth time frame, the Corporate & Institutional Banking Division and Commercial Banking Division partly moves in the “ad hoc” workstation at Concord I-K Tower in Gulshan-2, while Transaction Banking is above the Mohakhali
50
Since its journey on October 13, 2015 to the end of December, 2015, within this span of less than a quarter of year, all 3
fresh facilities with existing as well as new customers.
Office. The very velocity and move of the team trade off the impediment of different places. It might be easily conceived that service dissemination will get a momentum immediately when the divisions will shift to their new workstation which will help synchronize with other divisions and departments. Molding mindset both of employees and customers is another aspect which is being dealt with cautiously and sincerely. As banking is getting re-defined and re-engineered, so has to be made its service to enhance competitiveness. It requires some time to get accustomed to the new module. To this effect, conceptual and motivational messages have been communicated. The market driven forces leads to the realization that reward is for those who have contributed today and will contribute tomorrow. To breakthrough, miles to go such as providing enhanced and expedite service than that of previous, tailoring process with core banking system, prioritizing on paperless banking services to commensurate with Green Banking, squeezing business from sluggish economy, parking new customers, competing the free flow of foreign investment that appears with falat pricing and above all balancing the Big Move i.e CENTRALIZATION with a lot of Branches. Knitting proper strategy is the key to success. The 3 Divisions are much keener to affix as well as revise its strategic maneuverings like regaining lost but good customers, retaining and regaining brand image, hunting and bucketing new customer, business enhancement from existing customer, business transfer from other bank’s business of existing customer based on their merit, keeping pricing unhurt, ensuring utilization of limit and so on. The Bank sees a prospective field after centralization. Several benefits can be squeezed from centralization. The trendy relationship module can enhance the relationship with the customer due to “one to one” communication channel, customized and prompt services to customer can be ensured, representing customer to the decision making authority with more cost effectively, customers’ confidence to be heightened and help minimize redundant process flow, better forecasting by budget allocation and improvement of the organizational effectiveness.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
SME Banking
progress in this sector. The Bank is offering congenial loan
There is a broad consensus that a vibrant SME sector is one of
more to the GDP.
the principal driving forces in the development of the economy
Bank’s SME exposure is thus well diversified among potential
of Bangladesh. SMEs stimulate private ownership and entrepreneurial skills and can adapt quickly to changing market
SME customers to different sectors viz. cottage, handy crafts, power loom, auto parts, garments accessories, rice mills, light
situation, generate employment, help diversify economic
engineering, commodity financing, textile mill, permitted brick
activities, and make a significant contribution to exports and
field, ship breaking/ scrap iron, poultry farming, fish processing/
trade. Therefore, policies and initiatives to develop SMEs and
dry fish, animal feed, agro-based and agro-processing industry,
to increase their competitiveness are a priority for Bangladesh. Liberalization of the economy along with rapid globalization
furniture, hospital / diagnostic center, packaging industry, leather goods sector, jute goods and jute-mixed goods,
has posed severe challenges to SMEs, not only in international
computer software and ICT goods, green financing-renewable
market but also in the domestic economy. Since SMEs are
energy etc.
products and services so that SMEs can grow and contribute
based on relatively small investment, their survival depends on readily available market with easy access. In this context, access to finance, market development and expansion as well as removal of other bottlenecks are a challenging task, which requires coordinated efforts both by the individual financial institutions as well as the government. Keeping this in view, Prime Bank Limited has formulated a comprehensive policy on SME financing and made significant
Rangpur 3%
Sylhet 2%
During the year 2015 the bank’s disposal was Tk. 1,697.32 core (Funded 1,265.87 Crore and non-funded 431.45 Crore) as SME Loans to 2,284 nos. of borrowers. As on 31st December 2015, the Bank’s SME outstanding stood at 1,782.12 Crore. Moreover, this year Management of the Bank has left no stone unturned to reduce the percentage of NPL and to maintain a sound SME portfolio. That’s why Bank’s SME Non Performing Loan percentage decreased by 2% in 2015 over that of 2014.
Barisal 1% Manufacturing 24%
Rajshahi 8% Khulna 9%
Geographicalwise SME Outstanding (%)
Dhaka 57%
Trade 53%
Sector-wise SME Outstanding Service 23%
Chittagong 20%
Medium 31%
Small 60%
Size-wise SME Outstanding Micro 9%
Capacity Building Activities
Prime Bank’s SME Conference:
With a view to increasing the focus on the SME business, Prime Bank has put utmost effort for the development of this sector by participating in various road shows, workshops, forums and
Prime Bank Limited organized a day long Conference on “Problems, Prospects & Solution of SME Business for the Bank and Way Forward” at Hotel Le Meridien, Dhaka on 17th October, 2015. Mr. Azam J Chowdhury, the Hon’ble Chairman of the Board of Directors of the Bank graced the occasion as the Chief Guest. Mr. Md. Tabarak Hossain Bhuiyan, Deputy Managing Director presided over the conference. Among others, Mr. Ahmed Kamal Khan Chowdhury, Managing Director; Mr. Md. Golam Rabbani, Deputy Managing Director; and other DMDs,
fairs to build awareness among the customers as well as for capacity building of the SME officials. In line with the trend of contemporary business and regulatory requirement, all the branches of the bank are now focusing on SME. Therefore, all Branches have separate target for selling SME products in order to strengthen the base of the bank.
51
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Mr. Kazi Mahmood Karim, SEVP & the Head of SME along with a
the erstwhile enclave under the Corporate Social Responsibility
number of officials from Head Office and Branches participated
(CSR) programmes of different banks. Prime Bank also took
in the conference.
part in that program.
Financing women entrepreneurs under SME
The aim of the Conference were to increase SME Business, lost customer survey, how to bring them back, problems being faced in handling SME Businesses etc. and future plan.
SME Marketing Strategy PBL also took part in a fair “SME Women Entrepreneur– Banker Exchange of Views and Open Credit Disbursement Programme” at Cox’s Bazar organized by Bangladesh Bank for SME Women Entrepreneurs. The fair accommodated the SME Women Entrepreneurs with stalls to show their products.
Another notable idea in SME financing is the development of women entrepreneurs. In the new framework of SME, Prime Bank is giving top priority in developing and harnessing women entrepreneurs. Bank has designed a separate product “Anchol” for women entrepreneurs. Bank has disbursed SME loans under this product at lower interest rate. This has made considerable scopes for employment opportunities as well as entrepreneurship motivation among the women business community. During the year bank has actively participated in different women fairs organized by different stakeholders. In 2015, Prime Bank has also established Women Entrepreneurs Development Unit at Head office level with a view to increasing focus on the development of Women Entrepreneurs and to be in compliance with the regulatory guide lines. This unit is taking initiatives to find out and to develop new women business clusters in different parts of Bangladesh and to bring the unbanked and under-banked women entrepreneurs under Prime Bank umbrella.
Bangladesh Bank Governor Dr. Atiur Rahman handing over a cheque to a women entrepreneur in a fair organized by Bangladesh Bank.
Corporate Social Responsibility Bangladesh Bank arranged a programme at erstwhile Dohola Khagrabri enclave under Debiganj Upazila in Panchagarh on 25 October, 2015 with a view to accelerate their socio-economic uplift and improving life standard of local people. Dr. Atiur Rahman distributed various assistance among the people of
52
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Retail Banking Division
to meet new customer expectations. We must adapt to the
The sum of the parts
revolution which will impact all our businesses and, finally, continue to finance our customers need. With this in mind, we
much more restrictive environment, anticipate a technology
Our business model enables us to provide continuing and relevant support to our customers, at their every need. For
have launched major projects to build the bank of the choice.
example, our structure can offer a safe place to store savings, help a first-time buyer take their first steps onto the property
At the same time, we continue to simplify our business. This
ladder etc.
and helpful to our customers; and our own improvements in
2015 was a year of continuing to transform how we serve our
includes fewer but better offerings and products that are fair efficiency.
customers. Throughout the year, our focus was on ensuring
Alongside the simplification work, we are investing in addition
compliance and establishing policy framework.
sales capacity to make it easier for our customers to interact with us and ensure we’re making all of our capabilities readily
Our operating results confirm the relevance of the strategic decisions set out in our 2015 Business Development Plan. Our
available.
business lines are undergoing major transformations in order
Retail Asset Financial highlights
0.68%
Potrfolio Position 1,213.22
1,257.7
1.46%
5.92%
5.93% 2.29%
1,455.88
(BDT crore)
44.84% 4 16.50%
Dhaka Zone CBD, HO Dhaka Total
Geographical Distribution
Chittagong Zone Khulna Zone Rajshahi Zone 22.39%
67.22% 2013
2014
Sylhet Zone Barishal Zone Rangpur Zone
2015
Nos. of Customers
2015
27,924
2014
Unsecured 40%
24,419
2013
Portfolio Composition
Secured 57%
24,404 Semi secured 3%
Increase in secured portfolio
8%
Portfolio growth
15.75%
Customer growth
14.35%
Loan proposal processed
6,544 53
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
RETAIL LIABILITY
The payroll team of the division has been revitalized in 2015 with
Financial Highlights of 2015
a view to be a leading player in this business. The team of the
The deposit of retail customers constitutes 62.83% of the total
head office along with the branch officials has already onboard some of the large corporates of the country. The division
liability of the bank in 2015. It also served as a source of low cost and no cost fund.
has successfully implemented relationship management concept for payroll banking. We are focusing to onboard more
The division perceives that banking with the retail customers
companies in 2016 at our current growth rate.
represents the bank in public. To cater market opportunities and cope with the dynamics, the division intends to introduce more competitive products in coming years.
Total 65 nos. of companies under payroll banking relationship Served total 13,445 nos. of accounts of service holders under payroll banking relationship
1,113,056 nos. of accounts 744,123 nos. of CASA accounts
AN AWARD FOR INCLUSION BANKING
59,969 nos. of My First Account with an Outstanding Amount
As a committed bank, Prime Bank has always adhered to different government initiatives from time to time. The bank also aims to ensure balanced, sustainable, inclusive and equitable growth in the country. Unlike previous years, in 2015 the bank focused on procuring My First Accounts (MFAs) to comply with the ‘Financial Inclusion’ program of central bank. With its continuous endeavors and support of all, the bank has been awarded the 1st place in School Banking Conference 2014-15 in Sylhet by Bangladesh Bank.
of BDT 19.70 crore
PAYROLL BANKING Be the Reference of Relationship Management Doing payroll business has enabled us to acquire low cost and no cost business and establish a unique selling platform for all consumer financial products.
Plastic Money Market Size in Bangladesh:
Card Division Prime Bank commenced its card business as one of the pioneer local bank issuers in 1999 and started acquiring cards in 2001. Since then it has captured a substantial portion of the market share by having around 98,005 issued cards. Prime bank has a superfluous privilege in grabbing the market as it a prominent member of MasterCard, VISA and JCB-the only Japanese Credit Card which is also the only Asian brand of Plastic Card in the world. We have a wide range of card types as per the inevitable needs to amuse the life style e.g. Classic/Silver, Gold, Platinum and World Cards.
Particulars
Sophisticated techno based internet banking has broken down the traditional bank practice, cash-based transactions. Plastic money has empowered customers to bank their wide range of business activities through plastic money conquering physical presence and time constraints. Adverse business situation due to negative movement of economic drivers impacted substantially to revolve credit and book new customers in 2015. Geographical Coverage of Plastic Money in Bangladesh is confined to 3 major metros through 29,000 POS Terminals and 7,500 ATM throughout country.
% of Tapped Market
22%
% of Untapped Market
78%
Number of Competitors
38
Total Population
160 million
Population in 3 major Cities
37 million
Total Number of TIN issued
3.5 million
Total Active TIN Holders
2.6 million
Tapped Market ( Total Active Cards)
0.57 million
Untapped Market
2.03 million
Prime Bank has launched the very first time Business World MasterCard and Consumer World MasterCard for the welltravelled business people and affluent consumers of the society in 2015. The card offers our clients a life of privilege and luxury globally as well as within the country, and best deals that they could want. Among other vigorous initiatives taken by Card Division in 2015 the promising ones were 15% cash back facility at Agora, revision of card cheque processing fee at 1% and cash withdrawal range up to 95% of available credit limit, extending PMI coverage through signing merchant agreement with Transcom, Otobi, Asian Holidays, Excel Telecom, Transcom Mobile, Fair Distribution, Okapia, Electro Mart and Flora
Tapped 22%
Plastic Money Market Size Untapped 78%
54
Data
Limited which bought about 2 crore + advance within last year, opening up free cash advance fee facility up to 90% of available card limit for on us card at our ATM , signing up with Wowtel Telecom service provider for international travelers through the local networks of over 215 countries. Under the
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
agreement, our Platinum and World cardholders can avail
during the year which contributed in the growth of KPIs of card
complementary Wowtel SIM Card through which travelers
business as given under:
can enjoy lowest tariffs within most of common countries and convenience of getting a global number before departure than any other roaming SIM cards. Travelers can save about 90%
Indicators(KPI) Card base
roaming cost. In 2015 many remarkable merchants got tied with Prime Bank among which the name of Le Meridian Dhaka, Radisson
Year
Key Performance
Advance (BDT in Millions) Operating Profit (BDT in Millions)
2013
2014
2015
76,442
86,435
98,005
1,042.20
1,131.75
1,122.50
94.10
100.78
101.10
Blu Chittagong, The Palace and Royal Tulip Sea Pearl Beach
Twenty-First Century Banking has become wholly customer &
Resort were the spotlights. Up to 50% discount at more than 75 merchants throughout year also added extra mileage in
technology driven. Technology intensive delivery channels like
card promotion. Its indeed a matter of rejoicing that we for the first time announced the lucky winner of 1st prize BDT
win-win situation by extending great convenience & multiple
100,000 under Shop N Win Loyalty Program of our Platinum Card in 2015. As a continuous process, the bank achieved technological advancement, service improvement and product development
Treasury Division What we do in Prime Bank Treasury The function of Treasury is mainly to optimize liquidity as well as capital of a Bank while administering the financial assets. It is also responsible for making sound financial investments with the available liquidity while reducing financial risks. Prime Bank Treasury is not an exception. Over the last couple of years Prime Bank Treasury has been performing very well in spite of the adversaries & economic turmoil globally as well as within the country. Prime Bank Treasury primarily focuses on the followings:
Expanding transaction volume
Utilizing different market opportunities within all risk and regulatory limits
Strengthening ALM operations
Creating a diversified fund management channel
Minimize market, liquidity and interest rate risks and finally
Enhancing profitability
Prime Bank Treasury has the following desks through which it offers a complete and well diversified package of Treasury solution to its customers both in the interbank and corporate market.
Treasury
Money Market Desk
Primary Dealership & Fixed Income Desk
Foreign Exchange Desk
Asset Liability Management (ALM) Desk
net banking, mobile banking, E-Commence etc. will create a options for customer. The strategy should be emphasizing on the differentiating factors of plastic money through regular advertising thereby creating awareness among customers. Nevertheless, it’s now high time to re-concentrate over new card booking through strong branch network along with other retail & SME products apart from corporate focus.
How was 2015? The year 2015 was unlike the previous years. The overall business environment observed in the country was quite calm in comparison to that of 2013 & 2014. Once people were convinced about the conducive business environment, they started investing again which was witnessed through growth in export, import and remittance that started from third quarter of 2014. All through 2015, the Local Money Market as well as Foreign Exchange Market was liquid. This was primarily due to slow down in our local private sector investment. In this situation, to support country’s economic growth and to revive investor’s confidence, Bangladesh Bank took several steps under inclusive banking specially credit accessibility for agricultural as well as small and medium enterprises (SME), empowerment of women, green banking, modernization of financial sector, mobile banking, e-commerce, export promotion and liberalizing foreign exchange transaction. All these steps along with the prudent monetary policy adopted by Bangladesh Bank ensured steady economic growth in 2015 while containing inflation at close to 6%.
Outlook of 2016: The GDP growth forecast for FY2016 is 7% with the expectation that exports will grow up to 6% with continued economic recovery in the US and the euro area. Strong expansion in remittances which is expected to grow by 9% will also boost consumption demand. Investment will pick up under a stable business climate, and spending will increase under the annual development program. Simultaneously, the government needs to continue its program of structural reform toward fiscal strengthening through revenue mobilization and improved public finance management. The central bank indicated in its latest monetary policy statement, that it would continue a cautious but pro-growth monetary policy that supports the government’s growth objective and inflation target. Moreover, the strategy of selective credit easing to support credit growth will be continued. In addition to windows for
55
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
inclusive finance for small and medium-sized enterprises and
to restore investors’ confidence. Faster growth expected in
for export development, a new medium to long-term financing
the US and the European Union, Bangladesh’s main export
window toward which the World Bank contributed USD 300 million out of USD 500 million in capitalization is now open
destinations, forecasted growth will be realized. Normal weather is a prerequisite.
for manufacturing enterprises and green initiatives in exportoriented textiles, apparel, and leather manufacturing.
Treasury performance in 2015
Although stable over the past 2 years, the persistence of the
In the year 2015, Treasury achieved all of its KPIs successfully,
current account deficit will likely cause the taka to depreciate
even exceeded in some areas especially in Primary Dealers
against the dollar during the year 2016. Capital and financial
Operations, Government Securities Trading and Cross
account inflows are seen as sufficient to boost gross foreign exchange reserves.
currency dealing.
Forecasts for FY2016 are based on several assumptions: The central bank will maintain a cautious and accommodative
through its own market research and market intelligence anticipated the market condition and accordingly adopted a
monetary
without
fund management and investment strategy for the bank. Our
hampering output growth. Targeted domestic revenue and external resources will be mobilized, especially for financing infrastructure investment. Political calm will be maintained
investment strategies in Primary Dealership, Money Market as well as in Foreign Exchange Management contributed to a very successful 2015.
policy
to
further
reduce
inflation
Prime Bank Treasury, at the very beginning of the year,
Prime Bank Money Market Desk All through 2015 the interbank money market experienced a very liquid scenario. There was no single instance where money market was felt a bit stretched. This was mainly possible for the accommodative monetary policy stance that was adopted by Bangladesh Bank. Call money rate hovered around 3.50%-5.50% for most of the year 2015. Alike the previous years, Prime Bank Money Market Desk was very active in the money market all through the year 2015. The revenue generated by MM Desk in 2015 was BDT 292 million compared to BDT 251 million of 2014.
Industry REPO, Reverse Repo, Call money rate in comparison to PBL Call rate
Repo
Reverse Repo
Call Money Rate
PBL Call Rate
10.00% 9.00% 8.00% 7.00%
8.57%
7.91% 7.25% 7.25%
6.00% 5.25% 5.00%
5.25%
4.00% 3.69% 3.11%
56
Dec-15
Nov-15
Oct-15
Aug
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
2.00%
Sep-15
3.00%
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Prime Bank Primary Dealership & Fixed Income Desk In 2015, Prime Bank continued its position as one of the Best Primary Dealer Bank of the country; it expanded its dominance in both Primary & Secondary Market of Govt. securities. Bangladesh Banks recognition in this connection depicts it all. Overall trading of Govt. securities achieved a new milestone of BDT 108,254 million and we made capital gain of BDT 1,765 million in comparison to BDT 256 million of ’14. We have also earned underwriting commission of BDT 23 million for successful bidding in the primary auction market.
PBL G.Sec portfolio in Comparison to Avg. Market Yield of G.Sec in 2015 Mkt Avg
9.00%
6,100
8.34% 399
116
155
10.00%
1,046
PBL Avg
598
BB Bill 233
BGTB
116
537
233
7,100
T Bill 9.45% 9.04% 39
8,100
5,100
8.00%
4,890
5.00% 4.00% 3.00%
Dec-15 697
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
100 Jan-15
6.00%
Nov-15 1,166
1,644
2,225
1,894
Ϯ͕ϭϴϵ
1,624
1,442
1,434
1,100
1,453
1,640
1,804
2,100
5.54% 4,694
4,694
4,439
4,594
4,905
5,166
5,173
3,100
5,143
5,100
5,076
4,100
4,994
7.00%
2.00%
Prime Bank Foreign Exchange Desk The Interbank Foreign Exchange Market was quite stable and liquid up until end of October’15 when USD started to appreciate against BDT and stood at 78.95 as of 8th December’15 which was 77.80 at the very end of October’15. Despite facing low volatility in USD/BDT rate for the first 09 months of 2015; our FX Desk was able to generate exchange gain of BDT 772 million in ’15. FX desk handled a business volume of USD 3,185 million in 2015. The inward remittance at the end of 2015 stood at USD 531 million compared to USD 503 million of 2014 recording a 5.58% growth. FX Cross currency desk that was restarted at the very end of 2014 started its full-fledged operation in 2015 and achieved its target set for 2015.
Net Open Position & Exchange Rate Movement, 2015
60.00
NOP
50.00
79.0000
USD/BDT Exchange Rate
78.8000 40.00
78.6000
30.00
78.4000
20.00
78.2000
10.00
78.0000
-
77.8000
27-Dec-15
12-Dec-15
12-Nov-15
27-Nov-15
28-Oct-15
13-Oct-15
28-Sep-15
13-Sep-15
29-Aug-15
14-Aug-15
30-Jul-15
15-Jul-15
30-Jun-15
15-Jun-15
31-May-15
16-May-15
1-May-15
16-Apr-15
1-Apr-15
17-Mar-15
2-Mar-15
15-Feb-15
77.4000 31-Jan-15
(20.00) 16-Jan-15
77.6000
1-Jan-15
(10.00)
Asset Liability Management (ALM) Desk
Growth in assets & liabilities
Asset Liability Management (ALM) is an integral part of Bank Management. Head of Treasury is the member secretary of ALCO. Through ALM our Bank mainly aims to achieve objectives such as:
Containment of risk in a coherent manner
Stability and consistency in earnings and
Profitability
57
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
ALM desk, through its own market research and market
was no single instance where Treasury violated any regulatory
intelligence presented the market outlook throughout the
limit which reflects Prime Bank Treasury’s commitment to
year to give an explicit idea about the market liquidity for availing market opportunities for investment and fund
operate within the rules and regulations of the Bank as well as other regulatory bodies.
deployment in the market. ALM desk helps in pricing the products of both assets and liabilities to gain the competitive
Treasury, as a major contributor to bank’s revenue line, contributed significantly in 2015. All our strategy and policies
advantage in the market. ALM desk also presented the bank’s
that were adopted in 2015 paid us very well and helped us
overall financial position in front of the senior management to formulate an effective investment and fund management
to have a profitable 2015. Overall Treasury revenue numbers
strategy for the bank. In 2015, Treasury operated within all regulatory limits and there
in 2015 from different revenue heads are given below with a comparison of 2014 & 2013 to show the growth in its business horizon and revenue line:
Treasury Income Figures in Million BDT Particulars
2015
2014
2013
Foreign Exchange Gain
772.11
876.41
930.44
Interest Income Call Loan
41.01
83.11
91.89
Interest Income on Placement /Deposit (Local)
46.24
1.89
0.90
Interest Income on Placement /Deposit (Foreign)
204.77
165.66
142.51
Interest Income on Govt. Securities
5,317.29
4,998.19
4,650.71
45.14
56.71
96.61
Capital Gain for Sell of Govt. Sec.
1,764.53
255.90
152.25
Gain on discounted bond/bills
1,265.57
1,029.56
672.17
22.55
46.57
21.71
Total
9,479.21
7,514.01
6,759.19
26.15%
11.17%
17.83%
Interest Income on Debenture/Bonds
Underwriting Commission regarding Treasury Bill/Bond
Special emphasis on developing market research expertise under ALM Desk
Emphasizing on Cross currency trading desk
Strengthening relationship with all counterparts (both Interbank & Corporate)
Designing such a Balance sheet that is in one hand cost effective and on the other hand ensures optimum rate of return
Special Emphasize for building awareness among corporate customers regarding hedging and its
Treasury Income 2015 - 2014 - 2013 9,479
7,514 6,759
2015
2014
2013
benefits Treasury Priorities in 2016
58
Maximizing Treasury Portfolio return through exploring new areas of investment
Strengthening Fixed Income as well as Foreign Exchange corporate sales desk
Updating the policies related to treasury in line the changed/modified/amended policies as endorsed by Bangladesh Bank
PRIME BANK A N N UA L R E P O RT 2 0 1 5
International Division
C o r p o ra t e G ove r n a n c e
Offshore Banking
The consistent flow of remittance in 2015 has been a significant
Prime Bank is offering Offshore Banking facilities through 3 (three) Offshore Banking Units (OBU) located in Dhaka Export
contributor in strengthening the bank’s foreign currency
Processing Zone, Chittagong Export Processing Zone and
administration. The Bank has a strong network globally with the prominent exchange houses and Banks in Saudi Arabia,
Adamjee Export Processing Zone. Total Loans and Advance of
Kuwait, Qatar, UAE, Oman, Malaysia, USA, Italy, South Korea
2015 compared to USD 110.74million as on December 31, 2014,
and the world renowned players like Western Union Money
recording a growth of 43.98%. During the year 2015, OBUs have made a Profit of USD 1,654,515as against USD 1,705,099in 2014.
Transfer and RIA Financial Services. Furthermore, inclusion of
three OBUs reached to USD 159.44 million as on December 31,
Aman Exchange WLL- Kuwait, Al Muzaini Exchange Co. KSCCKuwait, Riyad Bank- KSA, and Progoti Exchange LLC- UAE in the network in 2015 has further extended the capacity of Prime
Prime Exchange Co. Pte. Ltd. , Singapore
Bank for sourcing remittance from Kingdom of Saudi Arabia,
Prime Exchange Co. Pte. Ltd. (PEC), a fully owned subsidiary of Prime Bank, operates with two Branches in Desker Road
Kuwait and UAE. Prime Bank Ltd. has two dedicated officials deputed in UAE who are striving to increase the volume of remittance from UAE. The NRB Banking Department of the Bank backed by state-of-the-art IT facilities has maintained their endeavor towards the sourcing and timely distribution of foreign remittance throughout 2015. The bank has maintained its competency and efficiency in delivering superior services to its customer by effectively utilizing its own Branch network and also through the country-wide reach of the reputed NGOs viz. Buro Bangladesh & UDDIPAN.
and Jurong East with regulatory permission and license from Bangladesh Bank and Monetary Authority of Singapore (MAS). The company has built up a good customer base with marketing efforts, personalized service, enhanced distribution network and the efficient service platform of “RemitFast’ software.
Correspondent Relationship
PEC primarily serves the migrant workers from Bangladesh. In addition to that PEC has made good progress to India corridor through HDFC Bank. PEC has also signed rupee drawing arrangement with ICICI Bank. As part of its endeavor to expand in different corridors, the Company started remittance services to Philippines during 2015 under agreement with BDO UNIBANK INC, Philippines.
Correspondent Banking is an essential component of the global payment system, especially for cross-border transactions. Through correspondent banking relationships, banks can access financial services in different jurisdictions and provide cross-border payment services to their customers, supporting, inter alia, international trade. Correspondent network of PBL includes 685 members, covering 245 banks spread across 79 countries as on December 31, 2015. The bank is successfully maintaining such relationships around the world to facilitate international trade transactions. Prime Bank maintains 37 Nostro Accounts in 10 major currencies with reputed international banks around the world in all the important global financial centers. The bank also offers Vostro account service to foreign correspondents. PBL enjoys sufficient credit lines from its correspondents, including Credit Limit from Asian Development Bank (ADB) under Trade Finance Facilitation Program (TFFP) and from International Finance Corporation (IFC) under Global Trade Finance Program (GTFP), for adding confirmation to letter of credit as and when required. The bank also avails bilateral loan in USD from IFC, FMO and other Correspondent Banks for use in trade finance transactions through Offshore Banking Units. During 2015, Prime Bank availed a five-year loan in USD from IFC for RMG Remediation Finance i.e., for implementation of the SEFs (Structural, Electrical & Fire safety) CAPs (Corrective Action Plan) and ancillary electrical and structural elements. The bank also signed an agreement with United States Agency for International Development (USAID) in 2015 to avail a Guarantee facility for Remediation Finance to factories which are supplying ready-made garments to Alliance Member companies.
Total volume of remittance was SGD 87.76 million in 2015 compared to 102.60 million in 2014. The company made profit before tax of SGD 99,987 in 2015 compared to SGD 269,438 in 2014. Despite by stiff competition from unlicensed operators, PEC is expected to achieve better result by adopting customer focused initiatives in 2016.
The company has been effectively utilizing PBL branches as well as outlets of Sonali Bank, Janata Bank, Pubali Bank and branch network of reputed NGOs in Bangladesh for distribution of remittance to beneficiaries in the far flung areas timely and efficiently.
PBL Exchange (UK) Limited PBL Exchange (UK) Limited, a fully owned subsidiary of Prime Bank, has been engaged in remittance service as a Money Services Business (MSB) through its three branch network in London, Birmingham and Oldham since 2010. PBL Exchange has become Authorised Payment Institution (API) regulated by Financial Conduct Authority (FCA) w.e.f. 02 November 2015. All three branches have been pursuing continuously to increase its NRB client base in the UK. The volume of Remittance was GBP 19.77 million in 2015 compared to GBP 22.38 million in 2014. The operating loss of the company came down to GBP 9,992in 2015from GBP 15,303 in 2014. The company expectsto reach more customer segments in the UK which will have positive impact on its performance in 2016.
PBL Finance (Hong Kong) Limited PBL Finance (Hong Kong) Limited is the third fully owned overseas subsidiary of Prime Bank Limited and the only flagship organisation of the bankinvolved in trade business overseas. The company started operations in September 2011 in Admiralty, a
59
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
thriving place in the central business district of Hong Kong.The company was established with a goal to facilitate trade between Bangladesh and Far East by way of rendering consistent quality services and customised product offering especially in Ready Made Garments sector. Currently it is providing trade services in the form of LC Advising, Bills Collections, Bills Financing
Prime Bank Limited has recently signed an agreement on RMG Remediation Finance with IFC (International Finance Corporation). Managing Director of Prime Bank Limited, Ahmed Kamal Khan Chowdhury exchanges RMG Remediation Finance
and Credit Confirmation with a team of expert officials from
Agreement with InessaTolokonnikova, Manager of Financial Markets South Asia Region of IFC in a ceremony. Deputy
Prime Bankas well as local recruits which has helped create a widecustomer base. During 2015 the company earned
Managing Director & Chief Officer Global Business Habibur
profit of HKD 8.48 millionwith a growth of 28.88% over last year. The company has set up all necessary infrastructuresfor trade services including SWIFT connectivity(PRBL HK HH) and correspondent business relationship with all the major banks of Bangladesh. The company is poised to expand business
Rahman and SVP Hassanul Zahed, International Division of Prime Bank and Senior Country Officer, Bangladesh, Rehan Rashid, Senior Investment Officer EhsanulAzim, of IFC were also present on the occasion. Under this agreement, Prime Bank received loan from IFC for
through initiative for marketing of its products and services both in Hong Kong and Bangladesh.
RMG Remediation Finance to improve Structural, Electrical &
Agriculture Division
being delinquent. In spite of all odds PBL has been ceaselessly trying to contribute to the sector and will continue doing so in the future for the greater interest of the country.
Agriculture as a sector depends more on credit than any other sector because of seasonal variations in farmers’ returns and a changing trend from subsistence to commercial farming. In the absence of necessary working capital for buying water, fertilizer and pesticides, coupled with it the lack of the knowledge for their balanced application, farmers often fail to reap a better harvest from modern technology-led crops. In line with Government efforts as well as the Bangladesh Bank guidelines, PBL also continued its proactive policy and program support to boost up agriculture financing. PBL also recognizes Agriculture / Rural Credit as one of the major tools for ensuring “inclusion” of the rural people into the banking activities and plays a major role in the overall economic development of the country. In the absence of own branch network the bank has largely been depending on third party networks (NGOs / MFIs). It is pertinent to mention that while using third party network the bank is extremely selective in choosing the NGOs/MFIs in order to eliminate or reduce the possibilities of the accounts
60
Prime Bank extends RMG Remediation Finance
Fire safety standards.
Prime Bank Limited also believe that if the nation’s agriculture and rural base economy walk through a techno-based ecofriendly process, all the targeted goals will be achieved in a sustainable way. With the same vision, Bangladesh Bank (BB) announced a farmer-friendly agriculture and rural credit policy for the fiscal year 2015-16. The Central Bank of Bangladesh declared that disbursement of agriculture and rural loan would be considered an integral part of assessing the performance of the country’s banks as agriculture loan ensures financial stability. It is expected that the farmer friendly credit disbursement policy of the central bank would help diversify crops, lead to increased production and consolidate the success in food production. Bangladesh for the first time exported rice to Sri Lanka. After Sri Lanka, Bangladesh now wants to export rice to neighboring India from its bulging stock. The Bank has been
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
involved in disbursing quite a large portfolio of agriculture
high value crops (such as maize, spices, oilseeds and pulses)
loans during the year, which are listed below.
should be promoted in the drought prone region of the country through distribution of high quality seeds and saplings
BDT in Million
at subsidized price along with provision for agricultural credit at rebate / low interest rate.
2015 Purpose Disbursement
Outstanding
1,968.93
1,902.33
Fisheries
141.95
150.23
Livestock
551.77
477.25
Irrigation equipment
73.82
37.77
Crop storage & Marketing and Others
123.92
103.89
Poverty Alleviation
567.93
552.78
3,428.32
3,224.25
Crops / Vegetables cultivation
The Central Bank has advised to all banks that Credit facilities shall be allowed at rebate rate (4%) under interest loss compensation scheme of Government for cultivation of pulse, oil seeds and spices to reduce dependency on import and to save huge amount of foreign exchange incurred for importing the items. Bank may receive 6% interest loss compensation from Government through Central Bank after realizing the loan from borrower in full. Prime Bank Limited has positive
Farm Machineries
Total
16.57%
intention to contribute in flourishing the crop diversification in the country with a view to attain multifarious output in production, saving foreign exchange, substituting rice and other conventional crops. In line with this, the Bank has financed a substantial amount in cultivation of maize and spices. Credit facilities are allowed at rebate rate (4 percent) for cultivation of species and maize to reduce dependency on import and save huge amount of foreign exchange incurred for importing the items under interest loss compensation from Government. During the year of 2015, PBL has disbursed Tk. 1.60 million among 7 farmers at rebate rate (4 percent) for cultivation of species and maize.
3.16%
BDT in Million
2.15%
Agricultural Loan Disbursement During 2015
16.09%
57.43%
4.14% Crops / Vegetables cultivation
Fisheries
Livestock
Irrigation equipment
Crop storage & Marketing and Others
Poverty Alleviation
Crop
Loan disbursed @ 4% interest (January 2015 to December 2015)
No. of Clients
Spices
1.50
6
Maize
0.10
1
Total
1.60
7
Prime Bank provided BDT 2,000 Million Agricultural Loan to BRAC
17.14%
3.22% 1.17%
Product-wise Outstanding 2015 14.80%
59.00%
4.66%
Crops / Vegetables cultivation
Fisheries
Livestock
Irrigation equipment
Crop storage & Marketing and Others
Poverty Alleviation
Bangladesh is endowed with a favorable climate and soil conditions for the production of a variety of crops all year round. The major crops cultivated in the country are rice, wheat, maize, sugarcane, potato, jute, pulses, oilseeds, spices and vegetables. For climate change, there is a growing need to change the cropping pattern in the country. Water efficient
Prime Bank Limited entered into an agreement with BRAC on 24 May, 2015 to provide Agricultural Loan of BDT 2,000 Million for onward lending to farmers for crop cultivation, poultry farming, fish farming etc. Ahmed Kamal Khan Chowdhury, Managing Director & CEO of Prime Bank Limited and S.N. Kairy, Chief Financial Officer of BRAC and BRAC International signed the agreement on behalf of their organization. During the occasion Md. Golam Rabbani, Deputy Managing Director & Chief Operating Officer, Md. Touhidul Alam Khan, Deputy Managing Director & Chief Business Officer, Md. Omar Kabir, Executive Vice President & Head of Gulshan Branch of Prime Bank Limited and Md. Abdus Sattar Sarker, FCMA, ACA, Head of Finance of BRAC were also present.
61
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Prime Bank Limited has been extending its support to boost
Prime Bank Limited will provide BDT 10 Million loan to
up country’s agriculture sector. As an endeavour to include
Action In Development –AID
rural and unbanked people into the banking activities, the bank has been providing agricultural credit for crop, fishery, livestock, dairy, poultry, agricultural & irrigation equipment, crop warehouse and marketing, poverty alleviation and others activity related to country’s agriculture.
Prime Bank Limited will provide BDT 40 Million Agricultural loan to Action In Development-AID
Ahmed Kamal Khan Chowdhury, Managing Director & CEO of Prime Bank Limited and Tarikul Islam Palash, Founder & Chief
Ahmed Kamal Khan Chowdhury, Managing Director of Prime Bank Limited and Tarikul Islam Palash, Founder & Chief Executive of Action In Development-AID signed an agreement under which the Bank will provide agriculture Loan of BDT 40 million to Action In Development-AID for onward lending to the farmers for crop cultivation, Livestock rearing, fish farming, poverty alleviation etc. Md. Touhidul Alam Khan and Syed Faridul Islam-DMDs, Prime Bank Limited, A.B.M. Habibur Rahman, Head of Jessore Branch, Md. Emdad Hossain, SAVP & Head of Agriculture Support Division & Green Banking Division of Prime Bank Limited and other high officials of Action In Development-AID were also present on the occasion.
Prime Bank distributed cheque book among the 10 (ten) taka Account holders at Jhenaidah
Ahmed Kamal Khan Chowdhury, Managing Director of Prime Bank Limited met with the 10 (ten) taka account holders of the Bank and distributed Cheque Book among the 10 (ten) taka account holders at Jhenaidah under financial inclusion program recently. Md. Touhidul Alam Khan and Syed Faridul Islam-DMDs of the Bank, Md. Emdad Hossain, SAVP & Head of Agriculture Support Division & Green Banking Division, Head of Jessore & Magura Barnch of Prime Bank Limited and Tarikul Islam Palash, Founder & Chief Executive of Action In Development-AID were also present on the occasion.
62
Executive of Action In Development–AID signed an agreement under which the Bank will provide loan of BDT 10 million to Action In Development–AID for onward lending to the 10 (ten) taka account holders (Small / Marginal/ Landless/ Natural disaster affected farmers and Micro/Small traders) under financial inclusion program. During the occasion Md. Touhidul Alam Khan, Deputy Managing Director & Chief Business Officer, Syed Faridul Islam, Deputy Managing Director & CRO of Prime Bank Limited, A.B.M Habibur Rahman, Head of Jessore Branch of Prime Bank Limited, Md. Emdad Hossain, Senior Assistant Vice President & Head of Agriculture Support and Green Banking Division of Prime Bank Limited and other high officials of Action In Development–AID were also present.
Target and achievement: Prime Bank Limited has achieved the Agricultural/Rural Credit disbursement target of Tk. 374.94 crore against total target of Tk. 250.00 crore for the FY 2014-2015. In line with the Agricultural& Rural Credit Policy and Programme of Bangladesh Bank, a target of agricultural credit amounting to Tk. 250.00 crore only has been set for PBL for the FY 2015201, out of total target, a mount of Tk. 48.64 crore has been achieved during the period from July 2015 to December 2015.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Islamic Banking
Activities – Year 2015
Prime Bank enjoys a very strong brand image in the banking
provide different services to the Hajj Pilgrims and mobilize
sector and the bank has a very good market reputation and
low-no cost deposit in the process. For the purpose, a team
its Islamic banking business also has proved to be superior compared to others and also its own conventional system. Its
of officials worked under the supervision of Islamic Banking Division to provide marketing and sales effort. The performance
Islamic banking market share and growth rate is the highest
of the team was excellent – targeted number of agent accounts
among the conventional banks having Islamic banking branches. Considering the fact that the Islamic banking
was opened and fees of thousands of pilgrims were mobilized. We also participated in the 8th Hajj and Umrah Fair and set up
industry is at its growth stage in the country and competitive rivalry among the industry members is increasing, Prime Bank
booth at Ashkona Hajj Camp.
have set the vision to be a trend setter in this field by adopting proper strategy and objective in order to achieve its goal. The Islamic banking manpower of the bank is more than
‘Hajj Deposit Campaign 2015’ was conducted with a view to
Five special workshops were conducted on Islamic banking for the officials of Islamic Banking Branches (IBBs) and concerned officials of Head Office at Dhaka, Chittagong and Sylhet by HRTDC in association with Islamic Banking Division where 156
one hundred for whom the bank arranges regular training programs on operation of Islamic banking. Prime Bank is an active member of Central Shari’ah Board for Islamic Banks of Bangladesh and Islamic Banks Consultative Forum. Thus Prime Bank is committed to uphold the sentiment of majority of the people in the country as ‘A bank with a difference’.
officials took part.
Financial analysis
Three meetings of Prime Bank Shari’ah Supervisory Committee were arranged where different operational issues were reviewed and the Muraqibs of Shari’ah Supervisory Committee conducted Shari’ah audit and inspection at the Islamic banking branches and submitted reports thereon. Besides, Medical Camp at Bishwa Ijtema was arranged where thousands of devotees were given primary medical services consecutively for six years.
Nationwide, Islamic banking earned over 20% market share of the banking sector (private commercial banks) of Bangladesh. Among the Islamic banks, full-fledged Islamic banks conduct around 95% of the Islamic banking business of the country while the rest is done by the conventional banks having Islamic branches and windows. Since inception, Islamic banking business of Prime Bank marked steady growth in all areas - deposit, investment and profit. With only 5 branches, around 11% of Prime Bank’s business (interms of profit) is being conducted under Islamic banking modes with only 4% of manpower. Cost Effectiveness of Islamic banking products is better compared to overall business - Cost of Deposit 6.55%, Cost of Operation 1.13% and Cost of Fund 7.68%. In income matrix, Islamic banking business of Prime Bank also shows reasonable performance - Yield on Advance 12.67%, Spread 6.12% and Burden Coverage 65.10%.
Three Iftar Mahfils and discussion programs were held at Dhaka, Chittagong and Sylhet centrally with all the branches of the cities where a Paper was presented on“my›`i Rxeb MV‡b wmqv‡gi Ae`vb” by renowned Islamic scholars before huge gatherings. The programs were widely publicized through print and electronic media.
The Islamic banking branches (IBB) have made considerable progress in achieving business targets competing with the conventional branches of the Bank during the Year 2015. It is expected that Islamic branches would also perform better and achieve targets this year under the guidance and prudent leadership of the Management of Prime Bank, In Sha Allah.
63
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Alternative Delivery Channels
Year Wise Card Growth Proprietary Card Total 191,000
MasterCard Total 215,000
Prime Cash Total 91,000 215,000
To provide customer service 24/7 with absolute peace of mind
191,000
in fulfilling their financial needs in the most hassle-free way,
185,500
154,000
ADC of PBL constantly thrives to deliver superior with state of the art technological initiatives. It has an arsenal of different
123,500 91,000 71,500
alternative channels (i.e. ATM Machine, Debit Card, Internet Banking – Altitude, SMS Banking, Prime Cash (Biometric Smart
70,000 54,400 21,180
21,200
50,000
16,000
Card), Customer Helpdesk Service) to meet the ever evolving financial needs of our esteemed customer.
2008 2009 2010
2011
2012
2013
2014
2015
Status of ADC products are as follows: SL.
Name of Service\Product at ADC
1
Status as on 31.12.2015
ATM Machine
168
a. ATM Card - Proprietary
1,91,000
b. Debit Card - MasterCard
2,15,000
3
Prepaid Card (Dhaka Club)
900
4
Internet Banking (Altitude)
27,000
5
SMS banking
26,000
6
Phone Banking
7
Information Kiosk
8
Prime Cash (Biometric Smart Card)
9
Bank POS Service
20
10
Cash Back Service
19
2
3,400 04 91,000
Briefs about ADC Products: ATM Booths At the end of 2015, our LIVE ATMs are 168 nos. across the country. We accept MasterCard, Visa Card, JCB Card, Prime Cash, PBL Proprietary Debit Card & any other card under NPSB Network. Bank has also set up 02 units of solar systems ATM booths (Prime View & New Eskaton).
ATM Card / Debit Card By the end of 2015 the number of ATM Cards (proprietary) is 191,000 nos. The number of MasterCard Debit Card reached to 215,000 at the end of December 2015. PBL Debit Cardholders can also enjoy the cash withdrawal facility from our 168 LIVE ATMs as well as other ATMs under NPSB Network where 48 Banks included in exchange at prescribe charge. PBL debit Card holders also can use their debit card at POS under NPSB Network.
Prepaid Card (Dhaka Club) 23
Dhaka
2
Barisal Khulna
Total 168 No. of PBL ATMs
31
88
Rajshahi Chittagong Rangpur
14 Sylhet
9
1
168
Year wise ATM Growth
134
151
160
2008
64
27
2009
37
2010
2011
Internet Banking (ALTITUDE) ALTITUDE users can view & download their account statements, transfer funds to any Prime Bank account in real time, transfer funds from PBL account to any schedule bank branch of Bangladesh, Pay Bill of Credit Card of Prime Bank and other banks, Recharge Prepaid/ Postpaid Mobile and WiMAX accounts instantly. ALTITUDE website is verified by VeriSign and it uses Two Factor (2FA) Authentication to authorize a transaction. For these features customers can rely on this product more confidently. At the end of the year 2015, the total number of customers of ALTITUDE was around 27,000.
SMS Banking
81
23
A value added service for the Member of Dhaka Club is DCL prepaid card.
2012
2013
2014
2015
SMS Banking service enables account holders to get instant account related information through mobile phone. This service also includes different SMS alert service based on the transactions made by the account holder. Each client of the bank receive
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
SMS alert to their mobile number. Around 26,000 registered
Information KIOSK
customers are availing PUSH-PULL services through which
Through KIOSK system a customer avail (a) Balance
they can receive their account balance, mini statement, and currency exchange rate information at anytime from anywhere
enquiry (b) Mini-statement (c) Utility bill payment of Grameen Phone, Airtel, ROBI, Banglalink mobile operator (d) PIN change etc.
using their mobile handset. Prime Cash (Biometric Smart Card) “Prime
Cash”-
a
biometric
Phone Banking
smart card based alternative
Prime
delivery channels provides a new way of secure banking for
Phone Banking Service in May 2012.
Bank
Limited
launched
the unbanked/under banked
This service allows easy access in own account. PBL Phone Banking
urban and rural people of the
Service provide balance enquiry,
country. The service does not require any signature verification and allows its customer to authenticate their transaction through thumb impression as well as PIN. Prime bank issued around 90,000 nos. of “Prime Cash” card through its 1,017 agents including 145 branches network in different location of the country. Customers are students, farmers, garment workers, fisher man, driver, daily labor etc. Prime Cash cardholders can enjoy different banking services like Cash Deposits & withdrawal, Fund transfer, ATM withdrawal, Mobile top-up and Salary Disbursement. The service also supports Foreign Remittance Disbursement facility to the cardholder. In the year of 2015, Tk. 1.5 crore has been disbursed which came from major Ten (10) countries.
activation/block
debit
card,
available limit enquiry/total outstanding/minimum payable amount/last date of payment of Credit Card through IVR (Interactive Voice Response) system.
Bank POS Service A new service has been introduced named Bank POS as a supplement of ATM Service. Bank POS Service expedites cash withdrawal through Debit Card facilities from the branches when there is no cheque book with the customer. There are 20 nos. of bank POS in various branches of PBL.
Monarch
Meet & Greet Privileges at Hazrat Shahjalal International Airport
‘MONARCH’- the premium banking initiative of Prime Bank has successfully crossed the first year of operation. With a limited frontline team, Monarch team has successfully brought in
Flight Reservation International Travel
474 customers under the umbrella of Monarch. 22% of these Monarch customers are NTB (New to Bank). In 2015, the team achieved a 20% YOY (Year-on-year) growth taking the total portfolio to BDT 365.47 Crore. At Prime Bank, it is our constant efforts to meet all the requirements of Premium Banking Customers efficiently by offering various banking services. ‘MONARCH’ is a symphony of banking benefits, unique investment products, personalized service and exclusive lifestyle benefits that bring complete harmony to all financial needs of our Premium customers. ‘MONARCH’ is designed to manage the wealth and enrich the life of our premium clients with exceptional privileges.
for
Domestic
&
Prioritized Banking
Exclusive Dual Currency Debit Card with Higher Withdrawal Limit
Free Cheque Book
Free Internet Banking, SMS Banking & Mobile Banking
Discounted Rate on Retail Loans
Waiver of Fees on Various Products & Services
50% Discount on Safe Deposit Locker Facilities
Pre-approved Platinum Credit Card
Diversified Lifestyle
Fantastic Shopping Discount At
- Leading Local & International Stores - Home Décor Outlets - Food & Beverage Outlets Special Rates on Room Booking at Selected Hotels
Discounts at Salons/Spas and Health Clubs Invitation to Glamorous Premier Shows & Events Exclusive Health Packages at Reputed International Hospitals in Bangkok& Singapore.
Some of the core benefits of Monarch are: Exclusive Services Exclusive Premium Lounges in Banani, Baridhara & Tejgaon
Assistance
Dedicated Relationship Manager
Family Benefits
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Travel Benefits
Special Discount at Antique Luxuries - Jewellery Stores
In the last one year, Monarch Value Center has added a number of additional privileges to better cater to our valued customers. Organizations like WESTIN, The Palace Resort, Royal Tulip
Seeing the customer penetration, Prime Bank has decided to expand its periphery to open up two new lounges in Uttara &
Luxury Resort, and United Hospital etc. have come under an
Gulshan to better serve the customer in the vicinity. In addition
of Monarch.
agreement with Prime Bank to act as valued service partners
to these two lounges, Prime Bank is also planning about taking Monarch to Chittagong and Sylhet to cater to the premium customers of these region.
Credit Administration Division The functions of Credit Administration Division (CAD) are basically focused on the post approval activities and CAD always ensures that proper documentation and approval are in place prior to disbursement of loan facilities. Centralized CAD is established with a view to safeguarding of Bank’s assets and to maximize “stability in assets quality” by reducing the “Risk” to an optimal level. During 2015, CAD has taken a number of initiatives which are listed below: Regularization of the Documentation Lapses found during Re-vetting: To ensure the strength of our asset portfolio, CAD earlier successfully completed the re-vetting of security documents of the borrower whose total credit exposure is BDT 10 crore and above. During 2015, strong monitoring was continued for regularization of the inadequacies/lapses found during the re-vetting process and almost 86.1% of the lapses have been regularized. Completion of Sanction Advice Unit: The establishment of Sanction Advice Unit was completed during 2015 and presently Sanction Advice is issued centrally from the CAD directly addressing the customers covering all the branches. Such initiative has enabled us to ensure better credit discipline in our bank.
Credit Risk Management (CRM) Division In Prime Bank, CRM Division is playing among others the following major activities in light with the mission of the Bank specifically for continuous improvement of business policies, procedures:
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Formulation and/or up-gradation of different policies, process flow, credit related circulars, guiding the business teams for addressing the risk aspects for formulating different Product Program Guidelines (PPG), etc. Assessing risks inherent in the credit proposal with due diligence i.e. identification of credit risk, way out of risk mitigation, assessment of credit requirement, evaluate proposed facility pricing.
Initiatives for establishment of HUBs: During 2015, as a part of strategic planning, CAD took initiatives for the establishment of 6 hubs located at 6 different places of the country for preservation & execution of all Security Documents centrally. Meanwhile, the overall planning for the hubs/outstation establishment has been delineated. Such initiative will enable us to ensure better control over our security documents which will help us to achieve better asset quality. Besides, due to central management of documentation, we can expect that documentation inadequacies will be reduced to a large scale. Consequently, it will help us to reduce capital charge for our bank incurred due to such inadequacies. Moreover, through this initiative we will be able to comply rigorously the instructions given by the Credit Risk Management guideline and audit observation by the central bank from time to time. Initiatives for Issuance of Security Satisfaction Certificate (SSC): During 2015, CAD also completed the overall planning for issuance of SSC (Security Satisfaction Certificate) as a part of strategic planning. As per the planning, the ownership of security documents will be transferred to CAD starting from 2016 and CAD will start issuance of SSC centrally. Issuance of such SSC means full satisfaction over the documentation status of the customer as per sanction which implies better control over the security and better asset quality. Besides, as per the Credit Risk Management guidelines and audit observations of central bank, the scheduled banks are encouraged to issue SSC from CAD end. So such initiative will help us to be better compliant with the instructions and guidelines of central bank.
Monitoring of credit portfolio through review to ensure sound asset quality.
Complying with internal (Bank’s own Credit Policy / Lending Guidelines, circulars) & external regulatory authorities.
Identifying problematic borrowers through periodical review e.g. Early Alert Review of different types of credits, maintain effective follow-up and supervision and take all possible measures in time to save from classification in light of: structuring, cash flow generating prospect by the business entity itself, adequacy of security, pricing and profitability, financial analysis, performance, turnover, repayment history of the customer. Early Alert Review process is under up gradation which will help the Bank to ensure sound credit portfolio more efficiently.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
To guide/assist Business wings regarding both the
C o r p o ra t e G ove r n a n c e
and CRM Division acted as the Environmental and Social
To pursue relationship end for obtaining credit rating
Risk (E&S) Manager to ensure environmental and social risk management in the Bank. CRM Division arranged
of borrower by the External Credit Rating Institutions
training to equip the Credit Analysts of the Bank for
(ECAIs) to get relief in capital cushion as well as to ensure sound credit portfolio in exchange of the scope
E&S risk management area in consultation with FMO. CRM emphasized on E&S as well as being concerned
to award less pricing benefit to the superior borrowers.
Prime Bank has signed a facility agreement with FMO
business issues as well as the compliance issues.
CRM is participating in the Business Process Re-
of ensuring sustainable development in the long run for which degradation of environment needs to be
engineering in different functional areas to improve
tackled in efficient manner has already incorporated
efficiency and bring in required structural change.
the ‘Environmental Risk Management Policy’ in the core part of CRM Policy of the Bank. Moreover, CRM Division is playing active role for reducing paper consumption and ensuring green banking concept too.
In 2015, CRM Division has emphasized on following areas:
Implemented the ‘Delegation of Business Power (DBP)’ approved by the Board of Directors with a view to centralize the credit approval process to have better control and monitoring of the credit portfolio.
Prepared the End to End credit approval process and guided the Relationship Teams to adopt the process.
Introduced MIS on month wise total loan approval history elaborately and going to establish a full fledged MIS wing under CRM in the next year.
Guided the Business Teams for addressing the risk aspects while formulation of various PPGs to bring product diversification in the credit portfolio.
Information Technology Division Information Technology Division of Prime Bank Limited was established at the beginning of its banking operation. The division is well equipped not only with technology, but also with a dedicated professional workforce which has been built-up for support as well as development of new satellite applications. Information technology of PBL enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Technological development of the bank tremendously increases its customer service as well as trust worthiness of the stakeholder towards the bank.
In terms of ensuring compliance, as a Division, CRM has satisfactorily complied with the Bangladesh Banks audit findings and related guidelines in 2015 like previous years, which will have a direct impact on CAMELS rating hopefully. CRM division is going to adopt a new organogram for itself in line with the centralized corporate account management process. Moreover some new windows shall be introduced within the division for ensuring more compliance, smooth decision making, efficient account management. In the next year CRM Division shall review the Credit Risk Management Policy with purview of the up coming CRM Policy of Bangladesh Bank.
when designing new or upgrading existing networks taking into consideration for managing users, dividing networks into segments and restricting access to information based on different business and security policies. Groups of information services, users and information systems are segregated on networks. To mitigate the risk of unauthorized access to network devices the following guidance is in place:
Production, staging and development zones are established and physically and/or logically separated using firewalls;
Network zones are implemented and managed in a way that segregation of environments are there;
Firewalls are used to provide granular access control between the various network zones and only required communication ports, protocols, devices and servers are permitted;
Users are only being granted access to those areas of the network and systems for which they are authorized.
Information Technology Infrastructure The banking sector requires a secure and reliable communication infrastructure to ensure operational efficiency. Prime Bank has a robust network infrastructure with scalable, secure, redundant and load balanced architecture to support its customers regarding the on-line transactions with highest level of security. We use world renowned Active Devices in its network infrastructure. Connectivity to and from bank networks and external networks are carefully planned and controlled. Banks IT staffs are strictly ensuing security policies
CRM Division has allocated sector wise internal limit duly approved by the competent authority.
Strict policies are in place for maintaining different network segregation to manage the network infrastructure like internet, intranet and extranet. Data center is connected with the head office and different branches all over the country through this network. All the branches are connected with the core router at the data center using fiber optic, radio link or VSAT.
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redundancy has been kept for all the devices installed in the
activity occurs on the security system, be it a door opening or a person entering the data center.
Data center, Disaster Recovery Site as well as the branches. Link level redundancy as well as device level redundancy has
CCTV System: PBL is using CCTV systems to monitor the building premises. Cameras and software are being used to
been maintained for all branches to ensure maximum up time
monitor and record all type of activities.
Redundancy: As per the business continuity plan of the bank,
and better services to the customers. Link and device level redundancy has been maintained in data center for different network devices like Core Router, Core Switch, Core Firewall and Distribution Switch.
RTGS System
Load balancing: Application control engine (NLB) has been used to provide load balancing facilities for different banking
RTGS) system in the financial services of commercial Banks to ensure smoother and quicker inter-bank clearing of payments
application servers like core banking, mobile banking,
in 29 October 2015. Prime Bank also connected to the BD-RTGS
switching, and e-commerce gateway.
on the same day for its live operation. RTGS system enables the
Security: Network security remains essential to protecting data and privacy. Many services / devices have been installed to secure bank network such as firewalls, encryption, intrusion prevention and intrusion detection. By combining a few key security features and procedures, the Bank maintains the privacy of data, ensuring the safety and security of network, and preventing access to malicious hackers and non-authorized users by adopting latest technologies. The objectives of the Network Security procedure are:
To provide an overview of the risks associated with connectivity to external networks.
To define the security and control requirements to protect the firm in relation to the protection of the network perimeter.
To provide security guidance to system administrators to ensure the continued secure management of network perimeter infrastructure as per our central bank’s security policy.
The security controls are properly applied to reduce the risks associated with connectivity to external/internal networks. The implementation of connectivity with external/internal networks is properly authorized, authenticated, monitored, encrypted and managed by IT staffs that are properly trained in networking technologies. Monitoring: NMS system with a dedicated NOC team is in place for monitoring the PBL network. PBL has the technology to monitor and manage the network infrastructure. Access Control System: PBL can monitor and control the door access and for visitor management and perimeter monitoring. PBL is equipped with a 32-bit Windows based GUI point-andclick interface. This security interface animates whenever
T24 Reimplementation & Upgradation Project Prime Bank Limited (PBL) has been using TEMENOS T24 (R06) Core Banking Solution for its Conventional and Islamic banking operation in Bangladesh since 2007. Based on the reengineered overall Business processes and policies, central
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Bangladesh Bank introduced Real Time Gross Settlement (BD-
instant settlement of high-value, local currency transactions as well as government securities and foreign currency-based transactions. Currently, the minimum amount for an RTGS transaction in BDT is 1,00,000.00 (Taka one hundred thousand). However, there is no minimum limit for foreign currency payments. The nature of RTGS prompt settlement enables the customer to get his/her money early and to use for emergency needs.
Automated Sanction Screening Software Under the current regulatory landscape, financial institutions are facing a new wave of regulatory scrutiny. Current trends are not showing any signs of slowing down; in fact, recent government inquiries uncovered anti-money laundering (AML) and sanctions violations at several financial institutions and have resulted in billions of dollars in fines and look-backs for breaches in AML and sanctions programs. In view of the above, as per Bangladesh Bank requirement, Prime Bank introduced its in-house Automated Sanction Screening Software which can screen the bank’s incoming and outgoing messages against the latest sanctions lists. Messages are screened in real-time to ensure the bank can act immediately to block or investigate suspicious transactions.
Electronic Bill Payment & Presentment (EBPP) System Prime Bank has introduced EBPP system to collect various types of utility bills like WASA, DPDC, DESCO, etc. Since the EBPP system is automatically connected to the relevant organization’s billing system, manual input for usage unit and bill amount need not be inputted. As a result a user can pay the utility bill with less time and error free manner.
bank guidelines, latest business products & services and to bring all three types of banking i.e. Conventional, Islamic and Off-shore Banking under the same platform, Prime Bank had decided to upgrade the Core Banking System to the latest version of Temenos T24 R15 from R6 to adopt various SOPs for immediate implementation.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Internal Control Compliance
C o r p o ra t e G ove r n a n c e
and mechanism, with the emphasis being placed on regulatory requirements, Bangladesh Bank risk guidelines, processes, systems and specific controls to
Considerable importance has been given on internal control
ensure that high risk areas are regularly reviewed and
& compliance, supervision and monitoring of the bank. As prescribed in the Bangladesh Bank core risk guidelines on Internal Control and Compliance, the Board establishes such
Constantly reviews the internal control structure
monitored.
Spot checked of the Branch activities through surprise
an internal control system so that the whole internal audit
audits to find out major lapses and irregularities and off
process can work independently from the management which
site monitoring through MIS Dashboard, developed by in-house IT team.
reports to the Audit Committee. Management Committee (MANCOM) of Prime Bank Ltd reviews on a yearly basis the overall effectiveness of Internal Control policy, practice and
Monitored the effectiveness & implementation of various control tools such as DCFCL, QOR, LDCL, Self
procedure.
Assessment Anti-Fraud Internal Control Checklist of all branches and divisions/departments at Head Office as well as documentation statements through eDoc etc. developed and to be developed by IT team to strengthen internal check and internal control system of the Bank.
As per Bank Company Act-1991, Section 15 (Ga), the ICC Division should be independent and sovereign. It will act independently without internal influence of Management. ICC Division will not be involved in bank operational activities, but oversee whether bank is following the guidelines of regulatory bodies, institutional policies and procedures set by/approved by the Board of Directors and Laws of land. The main issue of ICC is to look after whether Bank machineries can act as vanguards of its assets, reputation and Depositors interests. However, restructuring of ICC & GRD is a continuous process and the Bank always inclined to adapt new policy, procedure and frameworks provided by regulatory authorities.
Update the control points in DCFCL and QOR in accordance with Bangladesh Bank guidelines, laws and regulations, Risk assessment matrix etc.
The mission of the ICC & GRD is to provide independent objective assurance and advice, designed to add value and improve the banks’ operations. It will help the bank to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and transparent governance processes.
Undertake measures to control irregularities in policy, procedures and guidelines through MIS such as parking & internal accounts, Asset liability mismatch, suspicious expenditures and errors in transfers & postings both manually and automatically.
Ensure full compliances of Bangladesh Bank annotations, Internal & External Audit reports, ISD risk assessments as well as other applicable regulatory requirements.
Conduct surprise visit of Branches and Head Office randomly to identify the lapses/irregularities.
Prepare annual report on the Health of the Bank with emphasis given to the dynamism of Banks financial health, Internal Control & Compliance Health and
The scope of work of the Department is to determine whether the Bank’s network of risk management, control and governance processes, as designed and represented by management, is adequate and functioning in a manner to ensure overall effectiveness of internal control systems in compliance with laws. To comply with the regulatory requirements, ICC & GRD had been fulfilling its responsibilities successfully such as:
Marketing Division In today’s intense competition at market place, most of the banks and financial institutions are striving hard to lay down their best possible efforts to be more competitive. Developing longterm relationships with the key customers is an effective way for banks to be differentiated from its competitors. Customers are more fragmented now and organizations are trying to get the customers’ share of mind. Optimum brand visibility is very essential to be on top of mind of potential customers. As a consequence, marketing efforts by organizations are more focused and market driven now. Some of the marketing initiatives of Prime Bank in 2015 are highlighted below. Prime Bank Limited organized an enchanting whole day cultural program with traditional Bengali foods representing the heritage of Bangladesh at the Westin Hotel on April 14, 2015 to celebrate the Bengali New Year-1422. It was a social
Image & Reputation Health.
gathering among the employees, management and the Board of Directors of the Bank. The Board of Directors interacts with the Management and employees of the Bank in this cultural event. This is how the corporate culture of the Bank helps to inspire the employees. It should be mentioned that every year Prime Bank celebrates the Bengali New Year to enhance the acquaintance and amity amongst the bank’s officials and to embrace the heritage of Bangladesh.
Prime Bank Celebrates Pohela Boishakh 1422
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Prime Bank has been sponsoring Golf Tournament at Kurmitola
Prime Bank Limited has become the title sponsor of National
Golf Club (KGC) since 2001 and it has become an annual
School Cricket by signing agreement with BCB. ‘Prime Bank
event in the Golfing Calendar of KGC. The members of the Club are mostly dignitaries, high officials, diplomats and
Young Tigers National School Cricket Tournament’ is the name of the competitive tournament where 508 school teams will
business tycoons of the country. Therefore, participating in
fight to hold the championship title. Tinga- the tiger cub is the
the tournament allows the bank an opportunity to promote its
mascot of the tournament. It is mentionable that Prime Bank
brand along with various productssuch as World MasterCard
will solely sponsor the tournament for next six consecutive
Credit Card, Premium Banking etc. targeted to the leading group of the society.
years. Tournament logo was recently unveiled in the BCB premises along with the presence of BCB and Prime Bank high officials. The tournament will start from District level and then move to Divisional and finally in National level. School cricket is the best elevator to move to the national level cricket. Most of the players of our national cricket team played school cricket in their early career. Prime Bank is very keen to work in the root level of country’s sports progress.
Key Handover to the Winner of the Hole-in-One in Prime Bank Cup Golf Tournament-2015
Prime Bank celebrated its 20th anniversary in 2015 organizing a press conference at a City Hotel on April 16, 2015.
Prime Bank celebrates its 20th anniversary
Prime Bank becomes Title Sponsor for Young Tigers National School Cricket Tournament
Prime Bank Limited launched the first Business World MasterCard credit card on December 21, 2015. The new card offers best-in-class customer value propositions for enterprise cardholders in Bangladesh. Both Consumer and Corporate cardholders of the Prime Bank World MasterCard will be offered an array of exclusive customer value propositions (CVPs).
As part of corporate social responsibility and the month long activities marking the celebration of its 20th anniversary, Prime Bank Limited arranged a voluntary blood donation program on May 20, 2015 in its premises at Prime View, Gulshan in association with Bangladesh Thalassaemia Hospital. Making its footstep on May 14, 2012 Prime Bank Cricket Club (PBCC) has evolved as the best cricket club of the country securing championship in the key tournaments of domestic cricket within a short span of time. Prime Bank Cricket Club is the champion of Amber Victory Day T-20 Challenge Cup2013, Champion of BCL 2014 and 2015 and Champion of Premier Division Cricket 2014. ‘Celebrating the Victors’- a gala event was organized with the presence of Cricketers, Sports Organizers and Journalists.
Gala Event of Prime Bank Cricket Club
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Prime Bank Launches the First Business World MasterCard Credit Card in Bangladesh
Going forward marketing division will continue arranging a number of CSR activities to add value to country’s economy, education, sports and poverty elimination. Apart from the CSR activities, employee socialization will be conducted to achieve more effective and efficient cross functional team work.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Market Research
Research and Development
Product Development
A keen understanding of business environment, trend
new asset products for SME Division as per refinance
of industry’s dynamics and forecast of major indicators play a crucial role in formulating strategies for growth and sustainable operation. Data, information and insight gathered
program of Bangladesh Bank for the new entrepreneurs.
For
introducing
new
competitive
CASA
products,
R&D designed a unique or Special Savings Account in
through systematic process help the business to take the
addition to its existing general savings accounts. It was also recommended that the Bank may also categorize
right decision. Besides, opportunities of business avenues can also be explored and existing business can be also given new
its current account customers in two segments- Current
dimension to increase the business volume and sustainable growth. Most importantly, what the customer/stakeholders think about the organization and its peer organization,
New Product Development: R&D Division designed some
Account and Current Plus.
Product Re-engineering: Among the Deposit Scheme (DS)
determine competitive advantage. To gather the insight, there
Products, comparative feature analysis on Double Benefit,
is no alternative to qualitative and quantitative studies.
Monthly Benefit, CSS, Account 150% , Prime Millionaire, Laksma Puron, Brighter Tomorrow, Nobagoto DS - have been conducted to aid ALCO of the Bank. Consequently, revision of interest rate, provisional profit rate tenure and all the applicable and expected installment sizes for the mentioned scheme products (Conventional & Islamic) had been done following suggestions of the Bank’s ALCO.
R&D division of the Bank undertakes research studies to provide reliable, accurate, valid information on economy, market, customer and contemporary issues. Considering the business trend, present scenario and forecast- R&D designs and re-engineers products and services, gathers consumer insight, proposes prospective locations for banking business, analyzes sectors, disseminates knowledge through economic publication and undertakes ad-hoc research.
R&D’S PRIORITY AREAS
Economy
Market
Marketing Research:
The division recommended some revisions/modifications modified features of revision of SME Asset Products (Anchol, Chalti, Subidha, Sampad, Sahaj etc.) after measuring the problems and prospects of SME Asset products of the Bank.
Comparative Data Analysis on Schedule of Charges (GB, Credit, FX, ADC, Cards, Premium Banking etc.) of different banks vis-à-vis Prime Bank.
Customer Charter and Service Standard of Prime Bank were prepared for submission to Internal Control and Compliance Division (ICCD).
Development of Customer Complaint Lodgment and Management Module as per guidelines of the Central Bank
Operations Research Banking
Consumer
Major activities performed by R&D Division are as follows:
R & D DIVISION’S ACTIVITIES
Market Research
New Product Development, Product Reengineering Consumer Insight
Operations Research
Branch Expansion Program (BEP) ATM Expansion Program
Business and Economic Policy Research
To explore potential geographic locations where the bank can extend its services to contribute to the socioeconomic development of the area, Feasibility Studies have been conducted on around Thirty (30) new locations all over the country for new branch and ATM expansion and business growth.
Besides, feasibility studies have been carried out in Ten (10) places.
Besides, business performance has been conducted on an SME branch of Chittagong region considering operational cost and relative performance. Based on findings regarding incurring continuous loss, recommendations had been prescribed as way out means and to grow profitably.
Sector Research
Monthly Newsletter ”In-Focus”
Commodity
Weekly e-Newsletter
Business Priority Sectors
Miscellaneous Functions
The Business Feasibility Study is one of the crucial and frequent studies undertaken by R&D for serving the bank in setting up any Branch, ATM Booth at recommended and prospective areas over the country based on geographical, demographic, business, financial and economic data analysis.
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top market players, future outlook/prospect of the respective
Sector Research on Local Industry R&D Division provides up-to-date information on the industry/
industry based on secondary as well as available primary data.
sector as per instruction of the Board of Directors of the Bank. In addition, it is also a requirement of CRM of the Bank and different business units of the Bank. In this regard, R&D Division has already prepared and submitted the following reports to
Business and Economic Policy Research
The monthly publication “In-Focus” has focused on contemporary issues that are critical to global and
the Bank’s internal stakeholders:
domestic economy as well as financial markets and institutions. In total eight (8) unique issues have been
Plastic Industry of Bangladesh
Paper manufacturing industry of Bangladesh
Ship Breaking Industry of Bangladesh
Food & Beverages Industry report
Bangladesh Steel & Re-rolling mills Industry
circulated to all stakeholders (inside and outside). To celebrate the winning momentum of Prime Bank Cricket Club (PBCC), a special issue was circulated. The issue mainly focused on the glorious journey of the PBCC, man behind the winning strategy, and milestones of PBCC in a vibrant manner.
Besides, a weekly e-newsletter is being disseminated to provide financial insights to valued readers on a weekly basis. Fifty (52) issues have been communicated to the internal stakeholders of the Bank.
Miscellaneous Activities Rice Mills
Plastic
Bangladesh Bank through BRPD Circular No. 17 dated 07 October, 2003 among others advised all scheduled commercial Banks operating in the country to put in place effective risk management system which includes Money Laundering Risk Management. Money laundering, a criminal act which is recognized all over the world and has very severe consequences in the economy and security of the society. updated
Anti-Money
Laundering
Combined Data on Financial Inclusion sought by Bangladesh Bank
SMS Banking Charges of different banks report to MANCOM
Redesign of Account opening form (Corporate, Personal & Islamic) redesigning
Development of Complaint Management System of the Bank for submission to RMD
Study on the Risk Management Framework of other Banks to support RMD for incorporation in their proposed framework.
R&D will endeavor to provide insight, information in an innovative and insightful manner to align the Bank’s vision in being the best commercial bank.
of the Anti-Terrorist (Amended) Act 2013. All employees of the Bank, irrespective of the positions they hold, are accountable to the Top Management and regulatory bodies for their activities which might directly or indirectly relate to money laundering.
Activities of AML department during the year 2015 include:
A message sent from the desk of the Chief Executive Officer on January 06, 2015 to all employees of the Bank emphasizing compliance of AML issues
Submitted Reports to the Chief Executive Officer on quarterly basis regarding AML Activities
Use of Uniform A/C Opening Form as prescribed by Bangladesh Bank with Bangla translation
Declaration of Transaction Profile (TP) has been obtained for all accounts
Reporting of Cash Transaction Report (CTR) through Desktop Based Application and Web Based Application (goAML) per instruction of Bangladesh Bank
Guidelines
immediately after enactment of Money Laundering Prevention Act-2012 including Senior Management’s commitment to the anti-money laundering program. The Management has evolved such a culture for the Bank so that all the employees strictly adhere to each and every provision of Money Laundering Prevention Act 2012 and Anti-Terrorism Act-2009 with amendment in 2012. Later a Circular was issued for compliance
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Commodity
Anti-Money Laundering (AML)
has
Measuring Economic loss of Prevailing situation with facts and figures from Prime bank Ltd
Ship
These reports have provided market information focusing on size of market, total supply, production capacity/utilization,
PBL
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Reporting of Suspicious Transactions Report (STR) to
& rectify weakness in AML activities and to build up
Bangladesh Bank was regular Collected and reviewed the Self-Assessment Report
awareness among the employees. All of the 03 (three) foreign subsidiaries in U.K., Singapore and Hong Kong
from all of the Branches and took corrective action
have also been inspected in this year
when needed
C o r p o ra t e G ove r n a n c e
anti-money laundering) as and when received from
from Bangladesh Financial Intelligence Unit (BFIU) of
the Bank’s Audit & Inspection Division and external auditors of the Bank
Bangladesh Bank
Compliance of Bangladesh Bank’s requirements from
Conducting warm-up session round the year for
time to time and attending all bi-monthly meetings of
updating knowledge of the Money Laundering
Central Task Force arranged by BFIU of Bangladesh Bank
Prevention Act-2012 and Anti-Terrorism Act-2009 (with Amendment in 2013) with special focus on BFIU Circular No. 10 dated 28.12.2014.
AML Department has arranged 04 (four) Training Programs in Chittagong, Sylhet, Khulna and Rajshahi
As per requirement of AML Department, HRTDC has been regularly arranging Training Programs on AML for the Officers who did not receive any AML Training within last two years (i.e. 2013 & 2014)
AML Department and HRTDC jointly arranged total three workshops on Foreign Account Tax Compliance Act (FATCA) where Operations Managers and Managers from all Branches attended Surprise visits have also been made by AML Department on our 45 (out of 142) Branches to detect
Money Laundering and Terrorist Financing Risk Management Guidelines has been reviewed in accordance with the provisions of the Money Laundering Prevention Act-2012, Anti-Terrorism Act2009 (with amendment in 2012 & 2013) and the Money Laundering & Terrorist Financing Risk Assessment Guidelines issued by BFIU of Bangladesh Bank and is intended to ensure that all directors and employees of Prime Bank Limited such as to understand and comply with the requirements and obligations imposed on them.
where total 258 participants received day long training on Prevention of Money Laundering and Combating Terrorist Financing
Follow up and monitoring of Audit Report (related to
Solution of the problems/issues as and when received
Introduction of Automated Sanction Screening Solutions for on boarding time screening of all customers of the Bank, inward and outward SWIFT messages, card transactions and remittances
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C o r p o ra t e G ove r n a n c e
REPORT ON THE ACTIVITIES OF AUDIT COMMITTEE The Audit Committee performs the oversight responsibilities of the Board of Directors of Prime Bank Ltd. (Bank) by reviewing the financial reporting process, the system of internal controls, the audit process, the management of financial risks, and the Bank’s process for monitoring compliance with the laws and regulations in force, including its own code of business conduct. In so doing, it is guided by the rules and regulations issued by Bangladesh Bank (BB), the Bangladesh Securities and Exchange Commission (BSEC) and the Bank Companies Act, 1991. In recent times, the functions of the Audit Committee have been expanded to include the supervision of corporate governance practices in the Bank and inspiring a compliance culture and transparency in the operation of the Bank in the interest of the stakeholders, be it major or minor.
Constitution of Audit Committee The Board of Directors has been very meticulous in the formation of the Audit Committee, which consists of 05 (five) members. All the members are financially literate and possess the required qualifications in keeping with the spirit & objectives as laid down in the regulatory directives. Out of the five members in the Committee, three (03) members, including the Chairman, are from the Independent category and none belong to the Executive Committee of the Board in order to avoid any conflict of interest. The Company Secretary discharges the usual functions of Secretary to the Committee as per BB directives. The current Audit Committee constituted by the Board in its 432nd Meeting held on 23/04/2015 comprises of the following Directors: Sl .
Name
Designation in the Committee
Status in the Board
Educational Qualification
01
Dr. Shamsuddin Ahmad
Chairman
Independent Director
Ph.D (Economics)
02
Dr. G.M. Khurshid Alam
Member
Independent Director
Ph.D (Economics)
03
Mr. M. Farhad Hussain
Member
Independent Director
FCA
04
Mr. Khandker Mohammad Khaled
Member
Director
B.Sc Engineer (BUET)
05
Mr. Md. Nader Khan
Member
Director
Commerce Graduate
All the members are knowledgeable and have the ability to ensure compliance with the financial, regulatory and corporate laws. They have professional experience due to their long engagement with corporate & financial management in addition to having the relevant academic background. With the amendment of “The Bank Companies Act, 1991”, responsibility of the Audit Committee has been widened and accordingly the Committee has to discharge manifold functions including special assignments requested by the Board.
Activities of the Committee in the year 2015: In the year 2015, the Audit Committee held nine (09) meetings in total where various agenda consisting of: (i) Risk Based Internal Audit Reports; (ii) Comprehensive Internal Audit Reports; (iii) Information Systems Internal Audit Reports; (iv) Exclusive Inspection reports; and (v) Surprise Inspection and Special Investigation Reports on the branches, Divisions/Units of Head Office, individual borrowers and employees were placed for review, examination and decisions. The Committee discussed the reports and called for complying with the audit recommendations at the earliest with confirmation. To ensure the independence and objectivity of the internal control function, the Committee has drafted an Internal Control Charter which defines the purpose, authority and responsibilities of the Internal Control and Compliance Division of the Bank in conformity with the recently issued BB Guidelines and the standards and best practices for the professional practice of Internal Auditing as issued by the Institute of Internal Auditors (IIA). The Charter has been placed with the Board for approval. Some of the significant activities of the Committee during the period under reporting are as under:
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Reviewed and approved the Audit Plan for the year 2015
Reviewed the Draft Annual Financial Statements for 2015 and recommended suitable changes where required before presenting to the Board. In this regard, the Committee also held discussions with the representatives of External Auditors: 1) M/S ACNABIN; and 2) M/S Syful Shamsul Alam & Co.; to ascertain compliance with the regulatory requirements & international standards in preparation and observation of the financial statements.
Reviewed interim Financial Reports (Quarterly and Half-yearly) of the year 2015 before presenting to the Board for approval.
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Scrutinized the applications of the intending external Auditors of the bank before their appointment/re-appointment for the year 2015.
The three Independent Members of the Audit Committee formulated a “Whistle Blower Protection Policy” at the request of the Board. The Policy is intended to encourage employees to report any activity that he/she considers illegal or dishonest or violates the Code of Ethics and Business Conduct.
Issued Guidelines on Compliance for prompt response and mitigation of the lapses and observations made by both internal & external auditors.
Issued Guidelines on Cash Management & Mutilated Notes for overcoming the difficulties with regard to handling of mutilated and built-up notes received at the counters of the branches.
Guided the preparation of the Annual Health Report of Prime Bank Limited for the year 2014 for onward reporting to Bangladesh Bank.
Reviewed the half yearly Status Report on quantum and status of complaints received up to June 2015 under “Guidelines for Customer Services and Complaint Management” of Bangladesh Bank. The Committee upon perusal of the report advised Management to direct all concerned for discharging their duties by maintaining high service quality, and to be courteous in dealing with the customers to avoid any dissatisfaction and further complaints.
Reviewed the status of pending disciplinary & administrative actions under various special investigations conducted during the year 2015, and asked management to speed up the process for resolving those within the stipulated time frame allowed in the Service Rules.
At the request of the Board, a Panel of 3 (three ) Independent Members of the Committee conducted independent investigations on a few delicate matters reported by Bangladesh Bank.
Reviewed the compliance status of the comprehensive Inspection Report on Prime Bank Limited conducted by Bangladesh Bank as on December 31, 2014.
The Committee also carried out the following activities during the year under review
Reviewed Financial Reports of the Subsidiaries of the Bank.
Examined the financial reporting process followed in the Bank.
Reviewed and discussed the reports concerning violation of laws and regulatory directives.
Reviewed and perused all presented reports i.e. Risk-Based Audit Reports, Special Investigation Reports, Comprehensive/ Special Inspection reports, and Surprise Inspection Reports prepared on the basis of findings of Internal Audit conducted on various branches and Divisions of Head Office.
Reviewed Shariah Audit reports and advised Management to strengthen the Shariah Banking activities of the Bank and strictly follow the Shariah principles in all Islamic banking transactions, and extend regular training to relevant officers on Shariah Banking.
Reviewed and perused Audit Reports related to IT Infrastructure and various IT related Products and Services of the Bank.
About the lapses/irregularities observed during regular & special exercises of the Audit & Inspection Division, the Committee asked for regularization of such objections and ensuring continuous compliance until the outstanding numbers were reduced to zero. The Minutes of the Audit Committee Meetings were placed to the Board on quarterly basis for information and endorsement of the Board. Before concluding this report, I would like to express my gratitude to all the Members of the Committee for giving their valuable time and services to fulfill the objectives of the Committee in the best interest of the stakeholders. I would also like to thank the Management & the Board of Directors for allowing the Committee to discharge its duties and responsibilities as an independent Committee of the Board.
Shamsuddin Ahmad, Ph.D Chairman
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REPORT ON THE ACTIVITIES OF RISK MANAGEMENT COMMITTEE The Risk Management Committee (RMC) is the third Committee of the Board besides the Executive Committee and the Audit Committee in consistence with the Bank Company Act 1991 (amended up to 2013) and subsequent BRPD Circular no. 11, dated October 27, 2013 of Bangladesh Bank. At Present, following Directors of the Board are representing the Risk Management Committee:
Sl
Name
Status in the Bank
Status in the Committee
1
Mrs. Nasim Anwar Hossain
Director
Chairman
2
Mr. Khandker Mohammed Khaled
Director
Member
3
Mr. Shamsuddin Ahmad, Ph.D. (Appointed on 23.04.2015)
Director
Member
4
Dr. G M Khurshid Alam (Appointed on 23.04.2015)
Director
Member
5
Mr. M Farhad Hussain FCA (Appointed on 23.04.2015)
Director
Member
6
Mr. Mafiz Ahmed Bhuiyan (Till 22.04.2015)
Director
Member
7
Mrs. Salma Huq (Till 22.04.2015)
Director
Member
8
Mrs. Muslima Shirin (Till 22.04.2015)
Director
Member
Duties and Responsibilities
Identifying different risks, introduce and implement proper strategies to control those risks, review existing risk management principles & procedures and take corrective measures if necessary;
Ensure appropriate organizational structure for risk management;
Form separate committees at Management level for compliance of instructions under risk related guidelines and supervision of their activities;
Review risk management policies and guidelines, review loan approval limit and submission to the Board for necessary revision each year;
Examine and approve the preservation of data and reporting implemented by the management and ensure implementation of the same;
Inform the Board of Directors about the summary of minutes of meetings of the committee;
Submit decisions/recommendations of the Committee to the Board on quarterly basis. If sought by the committee, internal and external auditors will submit evaluation report to the committee.
The Board of Directors of the Bank has formed the Risk Management Committee (RMC) as per guidelines of Bangladesh Bank. Risk Management Committee of the Board oversees the overall risk management of the bank. The committee also reviews risk management policies, process & guidelines of the bank and submit it to the Board for prior approval or renewal as necessary. During 2015, Five (05) RMC meetings were held and thirty-four (34) memos were placed before the RMC. The agendas discussed in the RMC meeting are as below: Sl
76
Name of the Memo
Number of Memo
1
Compliance status of RMC meeting
05
2
Risk Management Paper / Risk Management Report
04
3
Stress Testing
04
4
Borrower Rating
04
5
Risk Management Framework
02
6
Comprehensive Risk Management Rating by Bangladesh Bank
02
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Name of the Memo
Number of Memo
7
Submission of Statement on ICAAP
02
8
Formation of Basel Unit
01
9
Submission of Green Banking Policy
01
10
Allocation of Internal limit for Off Balance Sheet exposure
01
11
Non complied observations of core risk questionnaire for calculate core risk rating
01
12
Business Continuity Plan and Disaster Recovery Site
02
13
Strengthening and updating the Risk Management System
01
14
Core Risk Inspection by Bangladesh Bank on ALM, ICC, ICT, AML
04
The committee likes to extend sincerest thanks to all the members of the Risk Management Committee for their valuable time and support for facilitating to carry forward the objectives of the Board. The Committee also likes to thank the Management & the Board for assisting the Committee to discharge its due role.
Risk Management Committee Meeting: 2015 Present Members of the Risk Management Committee
Sl
Name of Directors
Designation
Presence of the Directors at the Meetings No. of Meetings
Present
Remuneration Drawn
Absent
Tk. 5000/- × 4 = Tk. 20,000/1
Mrs. Nasim Anwar Hossain
Chairperson
05
05
00
Tk. 8000/- × 1 = Tk. 8000/Total Tk. 28,000/Tk. 5000/- × 1 = Tk. 5000/-
2
Mr. Khandker Mohammed Khaled
Member
05
01
04 Total Tk. 5,000/Tk. 5000/- × 2 = Tk. 10,000/-
Mr. Shamsuddin Ahmad, Ph.D. 3
Member
04
03
01
Tk. 8000/- × 1 = Tk. 8000/-
(Appointed on 23.04.2015) Total Tk. 18,000/Tk. 5000/- × 3 = Tk. 15,000/Dr. G M Khurshid Alam 4
Member
04
04
04
Tk. 8000/- × 1 = Tk. 8000/-
(Appointed on 23.04.2015) Total Tk. 23,000/Mr. M Farhad Hussain FCA 5
Tk. 5000/- × 2 = Tk. 10,000/Member
04
02
02
(Appointed on 23.04.2015)
Total Tk. 10,000/-
Past Members of the Risk Management Committee Tk. 5000/- × 1 = Tk. 5000/1
Mr. Mafiz Ahmed Bhuiyan
Member
01
01
00
2
Mrs. Salma Huq
Member
01
00
01
Nil
3
Mrs. Muslima Shirin
Member
01
00
01
Nil
Total Tk. 5,000/-
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REPORT OF PRIME BANK SHARI’AH SUPERVISORY COMMITTEE Bismillahir Rahmanir Rahim.
Based on the Committee observations, the Management of
All praises are for Allah Subhanahu-wa-ta’ala. He is the One and
the Bank considered installing Islamic banking software as a special project and has given top priority to install the software
Second to none.
at the earliest. It has also been observed that Shari’ah audit Salat and Salam are on Hazrat Muhammad (peace be upon
conducted by the Muraqibs resulted in increased commitment
him) who is the best Prophet and the last messenger of Allah.
on Shari’ah compliance among the branch officials.
In the year 2015, three meetings of Prime Bank Shari’ah
Besides providing observations and guidelines, the Shari’ah
Supervisory Committee were held where different operational issues including those referred to by the Management of
Supervisory Committee also recommended the Management for doing the needful for advancement of Islamic banking
the Bank were perused by the Committee and necessary guidelines and counseling were provided thereon. Respected members of the Committee also addressed Iftar Mahfils arranged by the Islamic Banking Division of the Bank and held formal and informal discussions on Shari’ah issues that inspired all concerned for compliance with Shari’ah principles. Apart from this, the Muraqibs audited all Islamic banking branches during the year 2015 and submitted reports thereon. Based on the reports, some branches were advised to improve their standard of Shari’ah compliance in certain areas.
operations at Prime Bank. It was suggested that training on Shari’ah principles should be enhanced and the manpower of Islamic banking branches of all tiers should be brought under the process.
After reviewing Shari’ah audit reports, the Prime Bank Shari’ah Supervisory Committee opined that awareness on Shari’ah compliance has been increased during the year under report, among the officials related to investment and also among the investment clients as compared to the previous year. It has also been observed from the reports of the Muraquibs that desk level violations in investment deals have been substantially decreased. Most of the Shari’ah violations occur due to nonavailability of Islamic banking software.
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The Committee recommended to engage manpower having sufficient knowledge and to impart training on Islamic Shari’ah at all Islamic banking branches to ensure proper observation of Islamic mode of finance and banking in investment operation and the Committee also felt that officials should be more cautious about Shari’ah compliance while financing, especially in buying and selling of goods. Furthermore, strict supervision of Islamic banking activities based on Manual/SOP prepared for the purpose was stressed by the Shari’ah Supervisory Committee. May Allah give us Taufique to attain His satisfaction through implementation of Shari’ah in every sphere of life.
Ameen.
Abu Zafar Md. Sheikhul Islam
Prof. Maolana Mohammad Salahuddin
Member Secretary
Chairman
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Fina ncia l Sta tements
CORPORATE GOVERNANCE REPORT
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Statements of Board of Directors A- Statement on Directors’ Responsibility to Establish Appropriate System of Internal Control Banking transactions are diversified, complexand fraught with inherent risks. Again these are also no longer limited within the geographical boundaries of a country. Under the circumstances, issues of effective internal control systems, corporate governance, transparency and accountability has become of immense significance. The primary objectives of internal control system in a bank are to help bank perform better through use of its resources, to communicate better internally and to the external stakeholders and to comply with the applicable laws and regulations. The Bank, therefore, needs to have in place an appropriate and effective internal control environment under which controls are developed, implemented and monitored. The control environment consists of the mechanisms and arrangements that ensure internal and external risks, to which the Bank is exposed to, are identified; then appropriate and effective internal controls are developed and implemented to manage those risks. The Directors recognize their obligation for the Bank’s systems of internal control for establishing effciency, effectiveness, consistency and appropriateness with regard to compliance with the relevant laws and regulations. They annually evaluate qualification, proficiency, resources and independence of the external auditors for effectiveness of the audit procedure along with recommendation on re-appointment. The Directors affirm that they are actively concerned with sound corporate governance and diligently discharge their responsibilities for establishing business strategies and adopting policies for internal control, risk management and implementing risk based internal audit as per ‘section 15 Kha of Banking Company (amended) Act 1991’ for ensuring Bank is appropriately and effectively managed and controlled. The Directors also affirm that the Board, through its committees, has appraised the effectiveness of the bank’s systems of internal control for the year ended 31 December, 2015. The Directors have attended periodical review meetings with senior management to discuss the effectiveness of the internal control systems of the Bank and ensure that management has taken appropriate actions as per recommendations of the auditors and regulators.
B- Board’s Statement on its commitment to establishing high level of Ethics and compliance within the organization Compliance is a comprehensive program that helps Bank and their employees conduct operational activities ethically with the highest level of integrity as per legal and regulatory requirements. Establishing an effective Compliance and Ethics system has become a necessity to protect any regulated organization. At its core, an effective system protects an organization by detecting and preventing improper conduct and promoting adherence to the organization’s legal and ethical obligations. The Board believes failure in corporate governance is a real threat to the future of the Bank. With effective corporate governance based on core values of integrity and trust the Bank will have competitive advantage in attracting and retaining talent and generating positive reactions in the marketplace – if the Bank has a reputation for ethical behavior in today’s marketplace, it creates not only customer loyalty but employee loyalty as well. Effective corporate governance can be achieved by adopting a set of principles and best practices. A great deal depends upon fairness, honesty, integrity and the manner in which the Bank conduct their affairs. Prime Bank makes profit in order to survive and grow; however, the pursuit of profits must stay within ethical bounds. The Bank has adopted policies that include environmental protection, whistle blowing, ethical training programs and so on. Such compliance mechanisms help develop and build a corporate image and reputation, gain loyalty and trust of the consumers and heighten commitment to the employees. The Board is knowledgeable about the content and operation of the compliance and ethics system in the Bank and exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics system prevalent in the Bank. The Board has also helps establish an organizational culture that encourages ethical conduct and a commitment to compliance with the law. The Board, therefore, would like to state that it has been actively involved in establishing standards and procedures designed to prevent and detect misconduct and also promote a high level of ethics and compliance within the Bank.
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C- Statement that the Directors have reviewed the Adequacy of the System of Internal Control The Board of Directors has certain roles as stipulated in the ‘Bank Company (amended) Act 1991’. Accordingly, the Directors have worked on maintaining sound corporate governance and diligently discharged their responsibilities. The Directors have established broad business strategies, adopted significant policies for internal control and risk management and implemented risk based internal audits as per ‘sections 15 Kha & 15 Ga of the Bank Company (amended) Act 1991’ for ensuring that the Bank is appropriately and effectively managed and controlled. The Board has reviewed the policies and manuals of various segments of businesses in order to establish an effective internal control system which is adequate for achieving sustainable growth through orderly and efficient conduct of business. The Directors have also checked the control procedures for ensuring safeguardof the Bank’s asset, prevention and detection of fraud and error, adequacy and completeness of accounting records, timely preparation of financial information and the efficient management of risk. The Board has overseen the policies for creating a productive internal control system which is vital for sustainable development while upholding an efficient manner of business. They have also considered the competence and fullness of accounting records, sound preparation of financial information, and systematic management of risk and overall internal control processes. The Board of Directors monitors the adequacy and effectiveness of Internal Control systems through formation of Audit Committee. While forming the Committee, all the conditions mentioned in the Banking Company’s (amended) Act 1991, Bangladesh Bank guidelines and the Corporate Governance guidelines by Bangladesh Securities and Exchange Commission were adequately addressed. The Committee has reviewed the system of internal control and management of core risks faced by the Bank. It has also reviewed the audit process, the Bank’s process for monitoring compliance with laws and regulations and codes of business conduct. The Audit Committee has reviewed the arrangements made by management for adding the control features to the existing Management Information System (MIS). The committee has also reviewed the corrective measures taken by management relating to fraud-forgery and deficiencies in internal control revealed in the previous years. It has placed all the compliance reports before the Board of Directors and regulators on a timely basis and has performed all other oversight functions relating to Internal Control Systems of the Bank. On behalf of the Board of Directors
Chairman Board of Drectors
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Statements of Audit Committee A- Statement on Audit Committee’s review to ensure that Internal Controls are well conceived, properly administered and satisfactorily monitored Prime Bank Ltd. has a defined internal control policy and guidelines for providing reasonable assurance that the Board’s objectives are attained in terms of operational activities, financial reporting, and compliance with prevailing laws and regulations. The Audit Committee through its oversight activities ensures that Management has put in place appropriate policies and procedures on internal control. A successful internal control environment requires Management’s commitment and support. Management’s goal is not to make each person an expert in internal control but to increase awareness and understanding as to why the Bank needs those and how to use them. The Audit Committee always stresses on these facts and ensures that Management takes proper measures for raising awareness of the employees about the internal control processes. The Committee frequently guides Management on issues of internal control and also gives decisions on critical issues. The Audit Committee, during the year 2015, held nine meetings to review the operational activities of the Bank and Management. Through the execution of the Internal Audit Plan, Special Investigations, and surprise inspections, the Committee ensures that internal controls are well conceived, have been properly administered and satisfactorily monitored by the Management. The Committee has been working on and monitoring closely the subject and the contents of internal control with the objective of ensuring that these are effective and workable.
B- Statement on Audit Committee’s role in ensuring compliance with Laws and Regulations The Board, Audit Committee and the Management, all play critically important roles in promoting a compliance culture in the operation and management of the banking affairs. As per the directives of the regulators, the Board sets the policy guidelines for Management compliance and it’s the Audit Committee that ensures those are strictly complied with through its oversight functions. As part of the responsibility, the Audit Committee, among others, also undertakes the following regular measures for ensuring compliance: a) Reviews effectiveness of the system of monitoring compliance with the laws and regulations upon receiving investigations reports which are again followed up for regularization through appropriate actions including disciplinary ones, where warranted. b) Establishes procedures for: (i) The receipt, retention, and treatment of the complaints by the Bank regarding accounting, internal controls or auditing matters; and (ii) The confidential and anonymous submission by the employees of the Bank of any concerns regarding questionable accounting or auditing matters. c) Reviews the findings of the examination by the regulatory agencies or other auditors. d) Reviews the process for communicating code of conduct to the Bank personnel and monitoring compliance therewith. e) Obtains regular updates from the Management and Bank’s legal counsel regarding compliance matters. In addition, the Audit Committee ensures that legal fees are settled on a timely basis and that the Bank does not have to bear any penalties in this regard. It can, therefore, be stated that the Audit Committee supervises and assures the Board that the Bank complies with all the applicable laws, rules and regulations, and also takes measures to ensure that all statutory dues are being settled on time.
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C- Statement on Audit Committee’s involvement in the review of the External Audit Functions The Audit Committee focuses on the financial management and reporting of the Bank. The Committee provides specific expertise in this critical area as effective financial management and reporting determines creditworthiness to outsiders and confirms the growth trend and successes to the insiders. These are the key determinants in establishing market value of Prime Bank – the ultimate scorecard of management’s success. The Audit Committee undertakes the following responsibilities regarding review of the external auditors’ functions: a) Reviews the external auditors’ proposed audit scope and approach, including coordination of audit efforts with internal audit team. b) Reviews the performance of the external auditors and exercises final approval on the appointment of the auditors. In performing this review, the Committee: i.
At least annually, obtains and reviews a report by the independent external auditor describing the firm’s internal qualitycontrol procedures; material issues raised by the recent internal quality-control review, and assesses the auditor’s independence in all relationships between the external auditor and the Bank.
ii.
Takes into account the opinions of Management and Internal Audit Division.
iii. Reviews and evaluates the findings and recommendations of the independent external auditors. iv. Presents conclusions with respect to the external auditors to the Board. c) Reviews and approves any non-audit work assigned to the external auditors and ensures that such work does not compromise the independence of the external auditors. d) Presents its conclusion with respect to the independence of the auditors to the Board. e) Meets separately with the external auditors to discuss any matters that the Committee or auditors believe should be discussed privately. f)
Recommends appointment/ re-appointment of external auditors.
D- Statement on Audit Committee involvement in selection of appropriate Accounting Policies The Audit Committee is a vital Committee of the Board of Directors assigned with the responsibilities of oversight of the financial reporting and disclosure process. The Audit Committee, as such, has a large degree of responsibility regarding selection of appropriate accounting policies for the Bank, and evaluation of the annual and quarterly financial statements. In addition, members of the Committee often discuss complex accounting figures, issues, and decisions made by the Management and the application of new accounting principles or regulations. Should significant complications with regard to accounting practices or personnel arise, a special investigation is instructed by the Audit Committee using outside consulting resources, if deemed necessary. External auditors are also expected to inform the Committee about a range of issues, such as their views on management’s selection of accounting principles, accounting adjustments arising from their audits, discrepancies or complexities faced in working with management, and any identified acts of fraud or illegal activities. The Audit Committee is aware that the selection and application of the company’s accounting policies must be appropriately analyzed. The Committee is aware that investors increasingly demand full transparency of accounting policies and their effects. In line with this, the Committee always encourages management to disclose trends, events, or uncertainties that would materially affect the reported financial statements. The Committee is always apprised of the evaluation criteria by Management in their selection of the accounting principles and methods. Proactive discussion between the Audit Committee and Management always takes place before signing of the annual report regarding critical accounting policies. In view of the above, the Audit Committee would like to state that it takes all necessary steps to ensure that management is taking adequate considerations when selecting accounting policies. The Committee is actively involved in selection of appropriate accounting policies that are in line with the applicable accounting standards, and annually reviews the same.
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E- Statement on the Audit Committee involvement in the review and recommendation of the Annual and Interim Financial Releases The annual and interim financial statements released by the Bank contains sensitive financial information that needs to be addressed carefully. The Audit Committee, therefore, always actively involves itself in reviewing these releases and recommends to the Management on ways to improve these financials statements. The Committee reviews and discusses with management all significant correction/adjustments (whether or not made) to ensure that all material adjustments are properly reflected in the financial reports. The Audit Committee assumes the following responsibilities with regards to annual and interim financial statements: a) Understands management’s responsibilities and representations with regard to annual and interim financial statements. b) Understands and assesses the appropriateness of management’s selection of accounting principles and policies. c) Understands management’s judgment and accounting estimates applied in financial reporting. d) Confers with both management and the external auditors about the financial statements. e) Assesses whether financial statements are complete and fairly presented in all material aspect. f)
Verifies that the financial position of the company and disclosures are clear and transparent.
g) Reviews financial statements and other information presented with it prior to release. It is to be noted that it is management’s responsibility to prepare complete and accurate financial statements and disclosures in accordance with financial reporting standards and applicable rules and regulations. The Audit Committee assures itself that the external auditors are satisfied that the accounting estimates and judgments made by management, and that management’s selection of accounting principles reflect an appropriate application of IFRS, IAS and BFRS. The appropriateness, including the degree to which management bias, if any, is evident, of the Bank’s accounting principles and underlying estimates, and the transparency of the financial disclosures in reflecting financial performance, would be the core discussion between the committee and external auditors. The committee is always interested in discussing and understanding the auditor’s views on accounting issues and actively seeks to develop a relationship with the external auditor that allows a full, frank and timely discussion of all material issues. With regard to interim reports, the Committee always has an extensive discussion with management regarding material issues before approval of the interim accounts. The Audit Committee of Prime Bank Limited has always been extensively involved in the review of the financial statements and has provided recommendations whenever needed. The Committee has duly carried out such responsibilities throughout the year 2015, to the best of their ability. On behalf of the Audit Committee,
Mr. Shamsuddin Ahmad, Ph.D. Chairman of the Audit Committee
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CORPORATE GOVERNANCE REPORT Corporate governance at Prime Bank comprises carefully
the existing Board of Directors has the following obligations
considered rules and practices by which the Board of
and duties:
Directors and Management ensures accountability, fairness
1.
Frequently asses the size and structure of the Board and
and transparency in the company’s relationship with all its
the mix of knowledge, skills, experience and perceptions
stakeholders. The goal is to maintain trust and confidence of
that may be necessary to allow the Board to perform
the stakeholders and help the businesses attain sustainability.
proficiently.
Prime Bank is a bank of many. It is an inclusive rather than an
2.
Recognize any capabilities not sufficiently represented
exclusive bank whose core business offers a wide spectrum of
and approve the procedure necessary to be certain that
financial products and services to individuals and businesses.
an applicant designated by the shareholders with those
Prime Bank is firmly convinced that a traditional banking
capabilities is nominated.
model focused on close customer relationships and advisory services best serves its purpose. Such advice is always based
3.
Casual posts, if any, are filled up by the Board in accordance with the conditions in the Companies Act and Articles of
on customers’ needs, not as a product.
the Company.
Board of Directors
Appointments of the Directors are also endorsed in the AGM by the Shareholders.
Policy on appointment of Directors Prime Bank Limited does not have its own policy on appointment of Directors, except for the very first Board that was held. PBL always complies with the prescription of the
Retirement and Re-election of Directors As per Companies Act, each year one-third of the Directors retire
regulatory authorities regarding appointment of directors.
from office at the AGM and if eligible, may offer themselves for
Bangladesh Bank circulars, BSEC notification, Bank Company
re-election by shareholders at the Annual General meeting. In
Act and Company Act are strictly followed in this regard. In
line with the requirement of BCA 1991, no Director should serve
order to be a member of the Board, a Director other than a
more than 3 years without seeking re-election at shareholders
nominated, Independent and alternate Director, must maintain
meeting. Accordingly following Directors will retire at the 21st
at least two percent shares of the company.
AGM and they are eligible for re-election:
As per the Companies Act, 1994, Directors are subject to retirement. At least one-third of the Directors shall retire by rotation in every AGM. As per the Banking Companies Act 1991, a Director may be appointed for a period of three years and the term may be prolonged for another three year.
1.
Mr. Md. Nader Khan
2.
Quazi Sirazul Islam
3.
Mrs. Marina Yasmin Chowdhury
4. Mrs. Nasim Anwar Hossain 5.
Mrs. Salma Huq
6. Uniglory Cycle Industries Ltd The term of an Independent Director is three years and may be lengthened by another three years.
(Represented by Mr. Mohammad Mushtaque Ahmed Tanvir)
7.
Mr. Tarique Ekramul Haque
With regards to nomination, removal and casual vacancy of the directors, Bank follows all relevant rules and regulations of the respective regulatory bodies. The Managing Director is appointed for a minimum period of three years subject to approval of Bangladesh Bank. The office of the Managing Director is not subject to retirement.
Independent Director As per Bank Companies Act (Amended) 1991 at least 3 of the total directors should be Independent. As per the BSEC guidelines on Corporate Governance at least one fifth of the total Directors should be Independent Directors. Therefore, in compliance with BCA 1991 and BSEC Notification No.
Composition of the Board of Directors – Non-executive
SEC/CMRRCD/2006-158/134/Admin/44
Directors and Independent Directors
2012, Board of PBL nominated three independent directors
All the directors of the Board are non-executive directors and
(almost 1/5th of total number of Directors) so that the Board
almost one-fifth is Independent. Currently, there are three
contains core skills considered appropriate in the framework
independent directors appointed by the Board and approved
of the company. The three independent directors are Dr. G. M.
by the BSEC and the shareholders in the AGM.
Khurshid Alam, Dr. Shamsuddin Ahmad and Mr. Farhad Hussain,
dated
August
07,
FCA. The Board of Prime Bank affirms that the Independent Directors appointed by the Board are in compliance with the Selection and Appointment of New Directors
clauses of corporate governance guidelines released by the
With regards to selection and appointment of new directors,
BSEC on Independent Directors.
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Independent Director’s independence
Approving
policies
relating
to
corporate
branding,
public relations, investor relations and shareholder
In order for a Director to be eligible as an Independent Director,
communication program.
the Board establishes that the Director has no substantial relationship with PBL either as a partner, shareholder or officer
The Board duly complies with the guidelines issued by
of an organization that has a relationship with PBL that would
Bangladesh Bank, BSEC, Bank Company Act and Company Act
prevent that nominee from becoming an Independent Director.
regarding the responsibility and accountability of the Board, its
For the purpose of true independence, Board decided that its
Chairman and Managing Director.
Independent Director do not hold any share of the Company; not associated with the Company’s Promoters or Directors or Shareholders who maintains one percent or more of the total
Code of Conduct for the Board of Directors
paid up share of the Company; not related with the existing
The Board of Directors follows a Code of Conduct which was
Directors or families; does not have anyother relationship,
adopted to provide guidance to directors to carry out their
whether monetary or otherwise with the company or its
duties in an honest, responsible and business like manner and
subsidiary/associate companies; not a member, Director or
within the scope of their authority, as set forth in the laws of
officer of any Stock exchange and who is not a shareholder,
the country as well as in the Memorandum and Articles of
Director or officer of any stock exchange or an intermediary of
Association of the Company.
the capital market. The Independent Director is appointed for a period of three years which may be extended by one term only. A person cannot be appointed Independent Director
The Code of Conduct states:
who has already been appointed such Director of three other
1.
listed companies. The Board ensures that all these guidelines are strictly followed by the Independent Directors appointed by them.
The Members shall act honestly, in good faith and in the best interests of the shareholders and the company.
2.
The members shall not make improper use of information acquired as a director.
3.
The members shall not take improper advantage of the position as a director.
Role and Responsibilities of the Board The Prime Bank Board is responsible for the periodic review
4. The members will be obligated to be independent in
and approval of the overall strategies, business and significant
judgment and actions and take all reasonable steps to
policies of the Bank. The Board also sets the Bank’s core values,
be satisfied as to the soundness of decision taken by the
adopts proper standards to ensure that the Bank operates with
board of directors.
integrity, and complies with the relevant rules and regulations.
5.
Confidential information acquired by the members in the course of exercise of directorial duties shall remain the
The Board’s responsibilities are, but are not limited to:
property of the company and it will be improper to disclose
Reviewing and approving the strategies and business plans
or allow it to be disclosed, unless that disclosure has been
for the Bank.
authorized by the company, or the person from whom the information has been received.
Approving the Bank’s annual budget and carrying out periodic review of the achievements by the various
6. Members shall make every effort to attend all Board and
operating divisions against their respective business
Committee Meetings during their tenure. They will not
targets.
absent themselves without good reasons or confirming leave of absence.
Prescribing the minimum standards and establishing policies on the management of credit risks and other key
7.
To maximize effectiveness of the Board/Committee Meetings, contribution of individual director shall be
areas of the Bank’s operations.
monitored and appraised on an annual basis.
nsuring that the operating infrastructure, systems of
8.
control, systems for risk identification and management,
of the meeting, shall declare beforehand the nature of their
financial and operational controls, are in place and properly
interest and withdraw from the room, unless they have a
implemented.
Reviewing the adequacy and integrity of the Bank’s internal control systems.
Overseeing the conduct and performance of the Bank’s businesses.
Reviewing succession planning and talent management plans for the Bank and approving the appointment and compensation of senior management staff.
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Approving changes in the corporate organization structure.
Board members having interest of any nature in the agenda
dispensation to speak. 9.
Training
opportunities/orientation/workshops
will
be
arranged for the members (especially for the newly inducted members) to make them acquainted with the international best practices, their fiduciary obligations, Code of Conduct etc. 10. Members shall always maintain ‘Fit and Proper Test Criteria’, clean CIB status and other obligations declared by the Primary and other Regulators. 11. Members shall be judicious about their entitlement of
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benefit/privileges as per Banking Companies Act -1991 and
in practice since inception of the Bank. This also complies
all circulars issued by Bangladesh Bank and shall be willing
with Section 1.4 of the BSEC’s notification on Corporate
to produce supporting documents, if required.
Governance Guidelines.
12. Members shall comply with Article 23.1 of the Bank’s Memorandum and Articles of Association of the Company while making Sale-Buy of Company’s share and shall refrain from making such transaction without formal declaration. Every Director will assure annually signing a confirmation that they have gone through, have complied with and will continue to comply with the set of codes approved by the Board of Directors.
Directors’ Remuneration Directors are not eligible for any remuneration other than attendance fee for the Board and its Committee Meeting. As per BRPD Circular letter No. 11, dated October 04, 2015, directors are eligible for remuneration of BDT 8,000 for attending each meeting but numbers of such Meeting are also prescribed in the said circular determining the numbers with or without remuneration.
Non-executive Director’s independence All the Directors except the Managing Director are nonexecutive Directors in the Board. None of the Directors takes part in the day to day affairs of the Company. They attend only the Board/Committee meetings to discuss the agenda reserved for the Board/Committees.
Policy on training of Board of Directors Prime Bank is fully committed to maintain highest standards of Corporate Governance & professionalism in driving the Bank’s progress on the principles of transparency and openness. For this purpose, training at home and abroad especially on the Corporate Governance is encouraged by the Board. As such, whenever opportunities arise, bank utilizes the same to train and orient its members. Recently few Directors along with the Chairman attended a workshop titled “Revisiting Corporate
Chairman of the Board The Chairman of the Bank is elected by the Board of Directors and the Board considers the Chairman independent.
Governance Regulations for Banks in Bangladesh” organized by Bangladesh Bank in association with IFC. There are also records of Directors taking part in Training Courses abroad on Corporate Governance. A Code of Conduct has been also adopted by the Board to be
Role and Responsibilities of the Chairman
followed by its Members and annual compliance of the Code
The role and responsibilities of the Chairman are:
is ensured. Besides, all relevant regulations promulgated/
As the Chairman of the Board of Directors (or Chairman of any Committee formed by the Board of Directors) does not personally possess the jurisdiction to apply policy making
circulated time to time by the concerned authorities are placed to the Board Meeting on a regular basis to keep the members updated.
or executive authority, he shall not participate in or interfere into the administration or operational and routine affairs of the bank.
Appraisal of the Board’s performance Prime Bank Limited doesn’t have a scheme for annual appraisal
The Chairman may conduct on-site inspection of any
of the board’s performance till date, but the bank is abiding
branch or financing activities under the purview of the
by the Code of Conduct prescribed by the regulators and
oversight responsibilities of the Board. He may call for
formulated by the Board. The Board members have always
any information relating to bank’s operation or ask for
taken decisions that have benefitted the bank as a whole and
investigation into any such affairs; he may submit such
they have always performed their duties accordingly. Another
information or investigation report to the meeting of
way of appraising the Board’s performance is conducted
the Board or the Executive Committee and if deemed
by analyzing the execution of the projects and proposals
necessary, with the approval of the Board, he shall take
sanctioned by it. A quarterly evaluation of classified and
necessary action thereon in accordance with the set rules
non-performing loans is continuously made by the Board. In
through the CEO. However, any complaint against the CEO
addition, evaluation of the Board also takes place at the AGM
shall have to be apprised by the Bangladesh Bank through
by the Shareholders.
the Board along with the statement of the CEO. Besides this, the Chairman may/shall assume any other responsibility if the Board assigns within the purview of the Rules, Regulations, Acts and Articles of the Bank. The Chairman’s responsibility is defined by the Board as directed by BSEC’s notification on Corporate Governance Guidelines.
Evaluation of the CEO by the Board There is a five year (2015-2019) Strategic Priorities & Action Plan (KPI) for the evaluation of the CEO/Management on an annual basis and it is revised from time to time by the Board. The CEO is also evaluated on an annual basis and is also given KPI’s for the years ahead. The Board has the capability
Chairman and CEO
to evaluate the CEO whenever it wishes so. All CEOs are
The Chairman is independent of the CEO, and this has been
evaluated after their term, and on the basis of their evaluation,
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the CEO. He shall act in such cases in accordance with
reappointment for another term is considered by the Board.
the approved service rules on the basis of the human
At the start of each year, the Board participates in extensive
resources policy and sanctioned strength of employees
discussions with the Managing Director and decides on
as approved by the Board. The Board or the Chairman of
financial and non-financial objectives. The annual financial
any committee of the board or any director shall not get
budget are considered and decided by the Board at the
involved or interfere into such affairs.
beginning of the financial year. The business and financial goals are assessed each quarter with actual accomplishments
F.
The authority relating to transfer of and disciplinary
by the Board. The non-financial successes are also evaluated
measures against the staff, except those at one tier
by the Board in each quarter. Furthermore, a yearly appraisal
below the CEO, shall rest on him, which he shall apply in
and assessment of the accomplishments of goals are made at
accordance with the approved service rules. Besides, under
the end of the year along with deviations.
the purview of the human resources policy as approved by the board, he shall nominate officers for training
A few mentionable KPIs for the CEO are to meet the annual budgetary targets of the Bank which was approved by the
Besides, the Managing Director shall assume any other
Board, maximize shareholders value through desired ROA,
responsibility if the Board assigns within the purview of the
ROI, ROE and EPS as per expectationof the Board, sustainable
Rules, Regulations, Acts and Articles of the Bank.
growth on investment and revenue for the Bank, gradually reducing the NPL ratio and improvement in the score for CAMELS rating.
Board Meetings The Board meets as required to discuss business strategy, financial performance, matters pertaining to compliance and
Knowledge and Expertise in Finance and Accounting
governance as well as reports on matters deliberated by the
The Board of Directors of Prime Bank Limited comprises
respective committees. The Board reviews, amongst others,
of members who boast a wide diversity of knowledge and
the financial performance of the Bank and subsidiaries, risk
experience in finance, economics, management, business
management and compliance reports and approve the
administration, marketing etc. This is to ensure that together,
quarterly results of the Bank at its meeting. In addition, Special
they can devise the appropriate policy for the growth of the
Board meetings are held when necessary, to deliberate on
bank while having expertise, ability to perceive matters in a
major transactions and ad-hoc matters that require the Board’s
bigger perspective and adequate independence to review the
urgent attention and decisions. A Board meeting is held at the
management in a sensible manner. The Bank’s Independent
beginning of the year to discuss the Bank’s Business plan and
Director, Mr. Farhad Hussain, FCA has vast knowledge in
budget.
Finance and Accounting and is a financial consultant as well.
Meeting papers on the proposals and reports are delivered to the Directors prior to the meetings, giving them sufficient
Role and Responsibilities of the CEO
time to evaluate the proposals. Paperless meeting has been introduced using in-house developed software. This enables
The responsibilities and authorities of the Managing Director are as follows:
the Board to function and discharge their responsibilities effectively. The minimum information required for the Board to
A. In terms of the financial, business and administrative
make an informed and effective decision includes background,
authorities vested upon him by the board, the CEO
objective, key issues, rationale, financial and non-financial
shall discharge his own responsibilities. He shall remain
impact of the proposal. Directors who are unable to attend a
accountable for achievement of financial and other
meeting due to unavoidable circumstances are encouraged to
business targets by means of business plans, efficient
provide feedback to the Chairman on matters to be deliberated
implementation thereof and prudent administrative and
for their views to be given due consideration at the meetings.
financial management. B. The CEO shall ensure compliance of the Bank Companies
Role of the Company Secretary
Act, 1991 and/or other relevant laws and regulations in discharge of routine functions of the bank.
Company Secretary is responsible for advising the Board on issues relating to compliance with the relevant laws, rules,
C. The CEO shall include information on violation of any law, rules, regulation including Bank Company Act, 1991 while presenting memos before the Board or the committee formed by the board.
as well as best practices of governance. He is also responsible for advising the Directors of their obligations and duties to disclose their interest in securities, disclosure of any conflict
D. CEO will provide all sorts of information to Bangladesh
of interest in a transaction involving the Bank, prohibited to
Bank about the violation of Banking Companies Act, 1991
deal in securities and restrictedto discloseany price-sensitive
and/ or any violation of Laws, rules and regulations.
information.
E. The recruitment and promotion of all staff of the Bank except those in the two tiers below him shall rest on
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procedures and regulations affecting the Board and the Bank,
The responsibilities of the Company Secretary comprises of: i.
Ensuring the compliance of the Bank in relation to
PRIME BANK A N N UA L R E P O RT 2 0 1 5
financial and legal practices, as well as issues of corporate
ii.
C o r p o ra t e G ove r n a n c e
x.
File the annual list of members and summary of share
governance. He acts as a point of communication
capital together with the authenticated Balance Sheet and
between the management, board of directors, company
the Profit and Loss account. Issue Dividend Warrants, bonus
shareholders, reporting in a timely and accurate manner
share certificates and make arrangement for disposal of
on company procedures and developments
fractional shares, if any.
Ensure the Bank complies with its governing document,
xi. Maintain strict confidentially of information, manage
policies, company law and any other relevant legislation
situations like conflict of interest, identify problems and
i.e. regulations with Bangladesh Bank, Securities and
implement or recommend solutions.
Exchange Commission (BSEC) and Registrar of Joint Stock Companies etc. Support and advise the Chair by ensuring the smooth functioning of the Board. Work in partnership
xii. Maintain and liaise with various corporate bodies viz. BAB, ABB, Chambers/other bodies, regulators.
with the Chief Executive and other Trustees to ensure the activities & operations of the Bank. iii. Support the Chairman in the smooth functioning of the
Vision, Mission and Strategy approved by the Board
Board. Receive agenda items from other Directors/staff
Vision/Mission approved by Directors
and ensure appropriate agenda items are tabled at Board
The Board of Directors has approved the vision and mission
meetings. This is done in consultation with the Chief
statements of Prime Bank and strictly adheres to it. They
Executive and the Chair who is responsible for preparing
strongly believe in the vision and mission set for the bank and
Board meeting agendas.
try to apply those in every business context possible. The Vision
iv. In line with Bangladesh Bank guidelines the company
and Mission statements can be found on page 6.
secretary has to act as the Secretary to the Audit Committee/Risk Management Committeeof the Board of Directors. In this area of risk mitigation, the Company Secretary has a pivotal role to play in support of the members of the Audit Committee, Risk Management Division, Audit & Inspection Division and Internal Control & Compliance Division. v.
Business objectives and areas of business focus PBL’s Board always sets business objectives and areas for focus in consistency with the market. The latest business objectives and areas of business focus can be found in the “Statement Regarding Forward Looking Approach” section of the annual report on page 11.
Act as a custodian of Banks governing documents and policies. Ensure the Bank pursues its objects as defined in its governing document. He should act as a custodian of
Strategies to achieve the business objectives
the interests of the Bank. So it is his prime duty to protect
PBL always sets up a Strategic Action Plan in the beginning of
and safeguard such interests of the Bank at all levels:
the year to align with the business objectives and strategies for
statutory, administrative, and arbitrational and in other
the year. The Board always gives direction to the management
policy matters. He should also ensure that Board meeting
of the Bank on how to steer the bank forward for the upcoming
minutes are signed by the Chair once they have been
year. Strategies set to achieve the business objectives can be
confirmed and copies filed and kept at the Bank.
found in the “Strategic Priority” section of the annual report on
vi. Ensure the appointment of Bank’s board members, that
page 10.
those appointed are not disqualified in law and are eligible to be members under the provisions of the governing documents and policies, and that the appointment procedure laid down in the governing document and policies is followed. vii. Make sure that the Directors have information to enable them to comply with the decisions and fulfill their responsibilities. This includes organizing the induction of new Directors also.
Audit Committee Chairman is an independent Non-Executive Director The Chairman of the Audit Committee is a BSEC approved independent non-executive director, who is not involved in the day to day operations of the bank. He is an experienced individual and qualified to be the Chairman of the Audit Committee. The Chairman is a Ph.D. in Economics from University of Hawaii, USA and MBA from IBA, Dhaka University.
viii. Ensure that Board meetings are held in compliance with Bank’s governing documents and arrangements for the meetings are made. ix. Confirms that Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) are run effectively and in accordance with the provisions of Bank’s governing document. This includes checking that a quorum is present. Also make sure that agendas and minutes of AGMs and EGMs are circulated timely.
Internal Audit activity Charter The Audit Committee established a terms of reference (TOR) so that it could function effectively and smoothly. The TOR was created to define the roles and responsibilities of the Audit Committee. The committee is also empowered to investigate/question employees and retain external counsel when required.
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and all employees are directed to co-operate with any
Composition of the Audit Committee
request made by the Committee
As per BSEC notification no. SEC/CMRRC/2006-158/129/ Admin/44 dated 7th August 2012 on Corporate Governance
c.
Engage outside legal or other independent professional
and Bangladesh Bank Guidelines; the current Audit Committee
advisers and obtain appropriate funding for the payment
consists of 5 members including 3 Independent Directors. All
of relevant fees and expenses.
members of the Audit Committee are non-executive directors.
Where the Committee is not satisfied with any aspect of the proposed financial reporting by the Company it shall report
All members suitably qualified
its views to the Board of the Company. In the event of any disagreement between the Committee; members and the rest
All members of the Audit Committee are qualified and have
of the Board, such matters will be resolved at Board level.
years of experience in banking and financial sectors reforms. They are also very competent and come from a variety of educational backgrounds, which brings diversity in the
3.0 Responsibilities
committee. A member of the audit committee is a managing
Financial Affairs of the Group
partner of a renowned audit firm and distinguished Fellow Chartered Accountant; hence he brings a high level of expertise
To monitor the integrity of the financial statements of the Bank (and any discussion or analysis thereof
in the areas of finance and accounting to the committee.
including annual and interim reports), and any formal announcements relating to the Bank’s actual and forecast financial performance, reviewing significant financial
Head of Internal Audit’s access in the Audit Committee
reporting judgments contained in them.
The Head of Internal Audit always has access to the audit committee and can raise his concerns whenever required.
To review any unusual items or matters brought to its attention requiring the exercise of managerial judgment affecting
Terms of Reference To steer the Audit Committee forward, a terms of reference (TOR) has been established. According to the TOR for the
the
preparation
of
the
statements
and
announcements
To provide a forum for the discussion and resolution of
Audit Committee, some of the roles and responsibilities are as
areas of disagreement in relation to the statements and
follows:
announcements, e.g. between management and the External Auditor
1.0 Purpose To monitor and review the formal arrangements established by the Board in respect of: a.
The financial reporting and narrative reporting of the Bank
b. The effectiveness of the internal controls and the risk management framework c.
Whistleblowing
d. Internal audit process e.
External auditors’ appointment/reappointment.
The Committee will act independently to ensure that the
Accounting, Financial Reporting and Regulatory Compliance
To review, and challenge where necessary, the actions, estimates and judgments of management (and any changes in them), in relation to the interim and annual financial statements before submission to the Board, paying particular attention to: (1) Significant accounting policies and practices, and any changes in them (2) Disclosures and estimates requiring a major element of judgment
interests of shareholders are properly protected in relation
(3) The extent to which the financial statements are
to financial reporting and internal control, always within the
affected by any unusual transactions in the year, the
principle of all directors having a duty to act in the interests of
methods used to account for any significant or unusual
the Bank and all directors remaining equally responsible for the
transactions where different approaches are possible,
Company’s affairs.
and how such transactions are disclosed (4) The clarity and completeness of disclosures, and the
2.0 Authority The Audit Committee is an assistive committee of the Board of
(5) Compliance with accounting standards
the Company. The Committee is authorized by the Board to:
(6) Compliance with legal and regulatory requirements
a.
(7) The going concern assumption
Investigate any activity within its terms of reference and have such direct access to the resources of the Bank as it may reasonably require
b. Seek any information that it requires from any employee,
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context within which financial statements are made
(8) The representation letter to the auditors; and (9) All material information presented with the financial
PRIME BANK A N N UA L R E P O RT 2 0 1 5
statements
C o r p o ra t e G ove r n a n c e
including
the
business
review,
and
corporate governance statements relating to the audit and risk management.
Make recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting,
To review the controls and procedures established by
on the appointment, reappointment and removal of the
management for compliance with regulatory and financial
external auditor. The Audit Committee shall oversee the
reporting requirements and with the requirements of
process for selecting the external auditor
external regulators
The Group’s Relationship with its External Auditors
To review the content of the annual report and accounts
Oversee the relationship with the external auditor, including: a) Approving the terms of engagement (and the
and advise the Board on whether, it is fair, balanced and
engagement letter) of the external auditor, including
understandable and provides the information necessary
the remuneration to be paid
for shareholders to assess the company’s performance,
b) Assessing
business model and strategy. The review undertaken by
the
external
auditor’s
effectiveness,
the Committee should assess whether the narrative is
independence and objectivity, ensuring that key
consistent with the accounting information.
partners are rotated at appropriate intervals c) Agreeing the policy for, and where required by that policy, approving the provision of non-audit services
Standards of Internal Control
by the external auditor and the related remuneration
To review the arrangements of the Bank’s systems of
d) Agreeing with the Board a policy on the employment of
internal controls in relation to financial management,
former employees of the Bank’s auditor, and monitoring
compliance with laws and regulations and safeguarding of
the implementation of this policy
assets, and the procedures for monitoring the effectiveness of such controls
Review and approve the annual audit plan, and ensure that it is consistent with the scope of the audit engagement,
To monitor any significant deficiencies and material
and coordinated with the activities of the Internal Audit
weaknesses in internal controls and disclosure controls
function
and procedures, as reported by Internal Audit and the External Auditor, and the implementation by management
Discuss with the external auditor, before the audit commences, the nature and scope of the audit and review
of appropriate remedial action
the auditor’s quality control procedures and steps taken by
To review arrangements for the receipt, retention and
the auditor to respond to changes in regulatory and other
treatment of complaints including those regarding
requirements
accounting, internal accounting controls or auditing matters. To review procedures by which employees may, in
considering the external auditor’s management letter and
confidence and with anonymity, raise concerns including
management’s responsiveness to the auditor’s findings
those of questionable financial reporting, accounting or
and recommendations
auditing matters.
To monitor and review in broad terms the scope, nature of
response to any major external audit recommendations
and review its reports, findings and recommendations
Review reports prepared by the external auditor as the Audit Committee shall require, considering management’s
the work and effectiveness of Internal Audit and to receive covering key operating risks.
Review the findings of the audit with the external auditor,
Review annually and report to the Board on the qualification, expertise and resources, and independence
Review the arrangements made by the management for
of the external auditors and the effectiveness of the audit
building a suitable Management Information System (MIS)
process, with a recommendation on whether to propose to
including computerization system and its application
the shareholders that the external auditor be re-appointed.
Review the existing risk management procedures for
The assessment should cover all aspects of the audit
ensuring an effective internal check and control system
service provided by the audit firm, and include obtaining a reporting on the audit firm’s own internal quality control
Evaluate whether management is setting the appropriate
procedures and consideration of the audit firm’s annual
compliance culture by communicating the importance of
transparency report where available
internal control and the management of risk and ensuring that all employees have understanding of their roles and
responsibilities
report should include an explanation of how the committee has assessed the effectiveness of the external
Review the corrective measures taken by the management
audit process and the approach taken to the appointment
as regards the reports relating to fraud-forgery, deficiencies
or reappointment of the external auditor, including length
in internal control or other similar issues detected by internal
of term
and external auditors and inspectors of the regulatory authority and inform the board on a regular basis
Ensure that the audit committee section of the annual
Review the audit representation letters before signature,
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giving particular consideration to any non-standard issues
PBL is placed for review and recommendation. The Committee
within the representations.
also implements an annual assessment of the efficiency of the Company’s Internal Audit function and certifies that Internal Audit has sufficient resources to accomplish its duties.
Other Responsibilities
Place compliance report before the board on quarterly
The audit committee has quite a few roles regarding the external audit functions:
basis regarding regularization of the errors & omissions, fraud and forgeries and other irregularities as detected
by the internal and external auditors and inspectors of
1. Ensure effective coordination of external audit function
regulatory authorities
Frequent and open interaction between the audit committee
Perform other oversight functions as requested by the board and evaluate the committee’s own performance on a regular basis
and the auditor is necessary to acquire the information it needs to accomplish its responsibilities to administer the company’s financial reporting processes. The quality of communications also provides opportunities to assess the auditor’s performance. The auditors should correspond with the audit committee
Audit committee’s review on internal controls The Internal Audit Division of the bank reviews the internal control systems of the bank and ensures that internal controls are considered properly managed and satisfactorily supervised. The Internal Audit Division reviews internal controls throughout all divisions/branches of the bank and then reports to the Audit Committee on their findings. The Audit Committee then
as noteworthy issues develop. Such communications will emphasis on the key accounting or auditing issues that, in the auditor’s finding, give rise to a greater risk of material misstatement of the financial statements, as well as any questions or concerns of the audit committee. Through proper communication, the audit committee ensures the effective coordination of the external audit function.
reviews the report submitted by the Internal Audit Division, and provides feedback on the lapses found. The Audit Committee also guides the Internal Audit Division on how to properly monitor internal control and ensure that internal controls are being correctly administered throughout the bank. The Audit Committee is committed that internal controls are well conceived, properly administered and satisfactorily monitored by the bank in 2015.
2. Ensure independence of external audit function The auditor must be independent of Prime Bank Limited. Audit committee is familiar with the statutory and regulatory independence requirements for auditors. The technical competency of the auditor alone is not appropriate to ensure a high-quality audit. The auditor also must exercise a high level of objectivity and professional skepticism. The audit committee’s interactions with the auditor during the audit provide numerous
Audit committee’s role in compliance with laws and
opportunities to evaluate whether the auditor demonstrated
regulations
integrity, objectivity and professional skepticism.
PBL being a part of the banking industry in Bangladesh is obliged to act in accordance with applicable laws and
3. Review the external auditors’ findings in order to be satisfied
regulations. There are several regulatory authorities, primarily
that appropriate action is being taken
Bangladesh Bank, who are associated with the company’s operation and performance. The Audit Committee supervises and guarantees the Board, that the company obeys all the applicable laws, rules and regulations of various regulatory authorities. The Audit Committee takes all measures to ensure that PBL complies with all laws and regulations and that all statutory dues are being settled timely.
There are many reviews that happen throughout the entire process during the audit committee meetings held. The audit committee extensively reviews all findings of the external auditors and ensures that management is informed and is taking action for resolving any discrepancies.Before the financial statements are signed, the audit committee reviews all the findings and ensures that they are satisfied with the actions that management has taken.
Audit committee’s contribution in the external audit function
auditor and ensure that such work does not compromise the
with management and the external auditors to ensure that the
independence of the external auditor
Company’s financial statements are objectively presented in compliance with the relevant Bangladesh Financial Reporting Standards, International Financial Reporting Standards and Bangladesh Accounting Standards in all substantial aspects, based on its review and consultations with management and the external auditors. External Auditors’ are requested to attend the Audit Committee meeting where Financial Statements of
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4. Review and approve non-audit work assigned to the external
The Audit Committee analyses the audited financial statements
External auditors should not carry out work that does not relate directly to the discharge of audit functions, if it would impair the auditors’ independence, or might give rise to a reasonable perception that their independence could be impaired. The audit committee must ensure that external auditors do not undertake any work that might compromise
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C o r p o ra t e G ove r n a n c e
their independence. If any work is being done by the external
the reliability of the information used for computation in the
auditors, the audit committee must approve before the work
financials. Management always assures that the information
commences. In short, the audit committee is responsible that
presented is fair and true and that all the information is derived
the independence of the external auditors is not comprised
from the system of the Bank.
under any circumstance.
Internal Control 5. Recommend external auditor for appointment/reappointment
A system of effective internal controls is a critical component
The audit committee does an extensive review on the audit
of bank management and a foundation for the safe and sound
work done by the auditors after the audited financial statements
operation of the organization. A system of strong internal
have been signed. The audit committee evaluates the auditors
controls can help ensure that the goals and objectives of a
on a very detailed level, and ensures that there were no threats
banking organization will be met, that the bank will achieve
to independence or any other issues with the auditors. The
long-term profitability targets, and maintain reliable financial
Audit Committee scrutinizes the applications of the auditors
and managerial reporting. Such a system can also help ensure
and recommends for appointment/reappointment for the next
that the bank will comply with laws and regulations as well as
year/AGM.
policies, plans, internal rules and procedures, and decrease the risk of unexpected losses or damage to the bank’s reputation. Internal control is a process established by the board of
Audit committee’s involvement in selection of appropriate accounting policies
directors, senior management and all levels of personnel. It is not solely a procedure or policy that is performed at a
The Audit Committee shall support the Board of Directors in
certain point in time, but rather it is continually operating at
certifying that the financial statements reflect a true and fair
all levels within the bank. The board of directors and senior
view of the company and is maintaining a good supervising
management are responsible for establishing the appropriate
system within the Bank. The Board delegates the duty to the
culture to facilitate an effective internal control process and
Audit Committee to decide on the appropriate accounting
for monitoring its effectiveness on an ongoing basis; however,
policies that are in line with applicable accounting standards as
each individual within an organization must participate in the
applicable and adopted by the ICAB, IFRS, IAS and Bangladesh
process. The main objectives of the internal control process
Securities and Exchange Commission. After choosing the
can be categorized as follows:
appropriate
accounting
policies,
the
Audit
Committee
1.
recommends the Board concerning implementation of the
Efficiency and effectiveness of activities (performance objectives);
selected accounting guidelines. The Board subsequently accepts the selected accounting policies for implementation.
2.
Reliability, completeness and timeliness of financial and management information (information objectives); and
3. Audit committee’s involvement in the review of annual and
Compliance
with
applicable
laws
and
regulations
(compliance objectives).
interim financial reports Performance objectives for internal controls pertain to the As per the Corporate Governance guideline of BSEC, the Audit Committee is expected to assess alongside with management,
effectiveness and efficiency of the Bank in using its assets and other resources and protecting the bank from loss.
the interim and annual financial statements before proposing to the Board for consent. PBL’s Audit Committee appraises
Information objectives address the preparation of timely,
the interim and annual financial releases whether audited or
reliable, relevant reports needed for decision-making within
unaudited and places it before the Board for approval. The
the banking organization. They also address the need for
audit committee always ensures that the financial statements
reliable annual accounts, other financial statements and other
reflect a true and fair view of the company and analyzes the
financial-related disclosures and reports to shareholders,
financials for any discrepancies.
supervisors, and other external parties. Compliance objectives ensure that all banking business complies with applicable laws and regulations, supervisory
Reliability of management information used for computation in financials The Audit committee ensures that the management information
requirements, and the organization’s policies and procedures. This objective must be met in order to protect the Bank’s reputation.
used for computation in the financials is true and fair. In order to ensure reliability of the information, the audit committee always has an extensive meeting with management regarding
Director’s responsibility to establish appropriate system of
issues of the financial statements. The Audit committee
internal control
queries management on issues that they find material to the
The Board of Directors has always been extremely active in
financial statements and makes sure that management has
establishing appropriate systems of internal control. The Board
a proper response to their queries. Through meetings with
of Directors has no sympathy for any type of fraud in the Bank,
management the Audit committee is able to understand
and always promotes a sound and strong internal control
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
system inside the Bank. The Board of Directors has always
Information and communication
appreciated the internal controls that have been set up by
An effective internal control system requires there are
management and have also given advice on any matters when
adequate and comprehensive internal financial, operational
required. The Board has always been very responsible and
and compliance data, as well as external market information
active in establishing an appropriate system of internal control.
about events and conditions that are relevant to decision making. Information should be reliable, timely, accessible, and
Key features of Internal Control System and the manner in
provided in a consistent format.
which the system is monitored Key features of Internal Control System are as follows: 1.
Management oversight and the control culture
2.
Risk recognition and assessment
3.
Control activities and segregation of duties
4. Information and communication 5.
Monitoring activities and correcting deficiencies
Monitoring activities and correcting deficiencies The overall effectiveness of the bank’s internal controls should be monitored on an ongoing basis. Monitoring of key risks should be part of the daily activities of the bank as well as periodic evaluations by the business lines and internal audit. The board of directors of Prime Bank performs the following activities to monitor the Internal Control System:
Management oversight and the control culture 1. The board of directors provides governance, guidance and
Periodic discussions with management concerning the effectiveness of the internal control system.
oversight to senior management. It is responsible for approving and reviewing the overall business strategies and significant
2.
policies of the organization. The board of directors has the ultimate responsibility for ensuring that an adequate and effective system of internal controls is established and maintained. Senior management is responsible for carrying out the directives of the board of directors, including the implementation of strategies and policies and the establishment of an effective system of internal control.
Timely review of evaluations of internal controls made by management, internal auditors, and external auditors.
3.
Periodic efforts to ensure that management has promptly followed up on recommendations and concerns expressed by auditors and supervisory authorities on internal control weaknesses.
4. Periodic review of the appropriateness of the bank’s strategy and risk limits.
An essential element of an effective system of internal
Through the establishment of the Audit Committee, the
control is a strong control culture. It is the responsibility of
Board of Directors monitors the effectiveness of internal
the board of directors and senior management to emphasize
control system. The Audit Committee evaluates whether
the importance of internal control through their actions and
management is setting the appropriate compliance culture by
words. This includes the ethical values that management
communicating the importance of internal control among the
displays in their business dealings, both inside and outside the
employees. They also review the corrective measures taken by
organization.
the management relating to operational lapses. Senior management of Prime Bank develops processes that
Risk recognition and assessment
identify, measure, monitor and control risks incurred by the bank; maintains an organizational structure that clearly assigns
An effective internal control system requires that the material
responsibility, authority and reporting relationships; ensures
risks that could adversely affect the achievement of the bank’s
that delegated responsibilities are being carried out effectively;
goals are being recognized and continually assessed. This
sets appropriate internal control policies; and monitors the
assessment should cover all risks facing the bank (which are
adequacy and effectiveness of the internal control system.
credit risk, country and transfer risk, market risk, interest rate
They ensure proper control through techniques such as top
risk, liquidity risk, operational risk, legal risk and reputational
level reviews, activity controls, physical controls, compliance
risk). Internal controls may need to be revised to appropriately
with exposure limit, approvals & authorizations and verification
address any new or previously uncontrolled risks.
& reconciliation of transactions of the Bank.
Control activities and segregation of duties Control activities should be an integral part of the daily activities of a bank. An effective internal control system requires that an appropriate control structure is set up, with control activities defined at every business level. These should include: top level reviews; appropriate activity controls for different departments or divisions; physical controls; checking for compliance with exposure limits and follow-up on noncompliance; a system of approvals and authorizations and, a system of verification and reconciliation.
94
Review of the adequacy of the system of internal controls by Directors In almost every Audit Committee meeting the issue of adequacy of the system of internal controls is a factor that is taken into consideration. The Audit Committee is responsible to the Board of Directors to ensure that the system of internal controls is adequate to protect against any type of fraud. The committee has reviewed the corrective measures taken by management relating to fraud-forgery and deficiencies in internal control.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
The Audit Committee places all the compliance report before
C o r p o ra t e G ove r n a n c e
the Board of Directors and regulators on a timely basis and has performed all other oversight functions in relation to Internal Control System of the Bank. In this way, the Directors review the
Identifying, monitoring, and managing the bank’s current and potential operational risk exposures
Handling “critical risks” (risks that require follow-up and further reporting)
adequacy of the system of internal controls.
Following up on reviews by and reports from Bangladesh Bank and informing the Board of issues affecting the bank’s
Identification of risks to which PBL is exposed internally and
operational risks
externally Banking industry is unique in many ways and one of the
informing the Board through Audit Committee of unusual
features that set it apart from other business is the diversity and
circumstances
complexity of the risks it is exposed to. Deregulated regimes along with globalization of business have opened new frontiers
Following up on reports prepared by Internal Audit and
Preparing management information on issues such as
that warrant risk management an even greater priority. The
IT security, physical security, business continuity, and
failure to adequately manage these risks exposes banks not
compliance.
only to business losses but also may result in circumstances that they cannot remain in business. Following are the core risk areas of banking:
used by management to identify and mitigate risk can be found in the Risk Management chapter on page 120.
1.
Credit Risk
2.
Asset and Liability/Balance Sheet Risk
Ethics and Compliance
3.
Foreign Exchange Risk
Prime Bank is always committed to establishing the highest
4. Internal Control and Compliance risk
level of business compliance and ethical standard.
5.
The Bank has an ‘Employee Code of Ethics and Business
Money laundering Risk
6. Information and Communication Technology Security Risk 7.
Environment
Banking companies in Bangladesh, while conducting day-today operations, may face some other risks both internally and externally:
More information regarding Risk management techniques
Credit risk also includes concentration risk, country risk, transfer risk, and settlement risk
Conduct’ – a framework of ethical behavior for all the employees of the organization. The leaders/managers are required to exemplify the highest standards of conduct and ethical behavior. The leaders/ managers are expected to:
Lead according to Prime Bank standards of ethical conduct, in both words and actions.
Create and maintain an environment where employees feel comfortable asking questions or reporting concerns.
Market risk (including interest rate risk in the banking book, foreign exchange risk and equity market risk)
Be diligent in enforcing the Bank’s ethical standards and taking appropriate action if violations occur.
Liquidity Risk
Operational Risk
Strategic Risk
The Employee Code of Ethics and Business Compliance also
Reputation Risk
specify the grounds of punishment to refrain employees from
Contact the Human Resources Division when in need of assistance.
any unwanted behavior. For instances, an employee shall be liable to disciplinary actions, if he/she: Strategies adopted to manage and mitigate the risks
Is convicted of any offence involving moral turpitude; or
Prime Bank adopted the following strategies to manage and
Is corrupt or may reasonably be considered to be
mitigate the risk:
Setting targets for capital ratios and capital composition
Managing the balance sheet
Managing the funding structure
Determining general principles for measuring, managing,
corrupt; or
means; or
Developing risk policies for business units
Determining the overall investment strategy
Is engaged or is reasonably suspected of being engaged in subversive activities, or is reasonably suspected of being associated with others engaged in
and reporting the bank’s risks
Assumes a style of living beyond his/her ostensible
subversive activities, and whose retention in service is therefore considered prejudicial to national security; or
Is in possession of pecuniary resources or property
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
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disproportionate to his/her known sources of income etc. The code of employee ethical behavior gives focus on the followings:
Protecting Privacy of Customers’ and Confidential Company Information,
Preventing Money Laundering and/or Fraud,
Avoiding Drug/ Substance/ Alcohol Abuse in the Workplace
help their employees to understand how ethics apply to their positions and everyday behavior. The Board of Directors of Prime Bank has approved the ‘Employee Code of Ethics and Business Conduct’ with a commitment to setting high ethical standards so that customers’ expectations and interests are protected in a compliant manner
The Board’s commitment to establishing high level of ethics
Protecting Bank’s assets
and compliance within the organization
Avoiding any conflict of interest etc.
The Board of Director has always been committed to
Each of the above stated issue is properly explained as separate
establishing a high level of ethics and compliance among all
section in the ‘Employee Code of Ethics and Business Conduct’.
employees of the organization. They have always encouraged management to ensure that everyone maintains a high ethical standard within the Bank. The Board guides management on
Integrity
principles that should be adopted and followed by everyone
The ‘Employee Code of Ethics and Business Conduct’ starts
in the Bank.
with the phrase “Uncompromising integrity”. Employees of Prime Bank are judged not only in terms of competencies, but also with their integrity. The reputation and continued success
Whistleblowing
of Prime Bank largely depend on a shared commitment to the
Whistle blowing about bad practices can help ensure that
core value of integrity. Respecting this value is the responsibility
problems are identified before it is too late. This helps
of each and every member of the organization.
prevent disasters ranging from customer mistreatment to huge financial loss. Prime Banks whistleblowing procedures encourage employees to disclose concerns using appropriate
Conflict of interest
channels before these concerns become a serious problem
The Code of Ethics and Business Conduct aware employees
which might jeopardize Bank’s reputation through negative
to avoid situations where their personal interests conflict, or
publicity, regulatory investigation, fines and/or compensation.
may appear to conflict, with those of the Bank. Employees
Whistleblowing is increasingly recognized as an important
are advised to take particular care when they are responsible
tool in the prevention and detection of corruption and other
for dealing with customers, suppliers, agents on behalf of the
malpractice. The clandestine nature of corrupt behavior means
Bank. Any failure to disclose a conflict of interest leads to a
that it may never come to light unless cases are reported by
disciplinary action.
people who discover them in the course of their work. Employees are encouraged to report any wrong-doing within
Compliance with the laws and regulations Prime Bank maintains its reputation as a law-abiding organization and a good corporate citizen. It complies with all the prevailing laws and regulations of the country. Employees are trained and guided to conduct business in compliant manner. The policy and procedures regarding Prime Bank’s business process are prepared in adherence to the laws and regulations.
Communication of the statement of ethics & business practices All employees are properly inducted to comply with Code of Ethics and conform to the relevant laws and regulations. HR Division makes sure that during joining employees read, understand the ‘Code of Ethics and Business Conduct’ and acknowledge the same by signing. HR continuously raises awareness on regular interval among employees to ensure that business decisions and actions undertaken by employees are completely in compliance with the prevalent rules and regulations. The leaders/managers of the Bank are mandatorily required to communicate and
96
the Bank. The Head of Internal Control and Compliance and Human Resources Divisions are the primary channel to report any incident. The Reporting channels offer the employees the opportunity to report while maintain their identity confidential. However, from experience Prime Bank understands that an effective whistleblowing policy demands for a shift in the culture. The Bank has a division named Internal Control and Compliance Division which dedicatedly works to ensure effective controls mechanism in the entire business entity.
Remuneration Committee Composition and Charter Prime Bank Ltd. has a Management Committee which comprises Managing Director, Deputy Managing Directors and other Heads of Division to review, discuss and decide on important business issues. In addition to the regular roles and responsibilities, the Committee assist in formulation of remuneration related policies and practices in alignment of the Bank’s short and long-term business objectives. The roles and responsibilities of the committee are the
PRIME BANK A N N UA L R E P O RT 2 0 1 5
followings:
Review the effectiveness of remuneration policy to ensure that whether the Board’s set objectives and expectations are being met;
Ensure that an effective remuneration policy, procedure and practice are in place, aligned with the Bank’s strategy, and is applied consistently for all employee levels.
C o r p o ra t e G ove r n a n c e
widened opportunities to realize their diverse potentials fully as well as benefit the organization by demonstrating value creating behaviors. To ensure long term sustainability, Prime Bank has a special focus on skill and merit based recruitment and selection process, highly competitive remuneration package, adequate training and development programs, career growth with succession planning, high-performance culture and pleasant
Ensure that the structure and mix of fixed and variable
working atmosphere where employees are able to escalate
pay and other elements are in alignment with the
their grievance and receive counseling.
overall business objectives;
Guide and give suggestion to HR team during
Recruitment and selection process with ‘best-fit’ ethos
preparation and review of any policy or process related
followed by clearly defined policy and procedures
to compensation and benefits;
The recruitment and selection in Prime Bank follows the ‘best
Ensure that all benefits, including retirement benefits
fit’ approach. As per Bank’s requirement Human Resources
and other financial arrangements, are justified,
Division ensures that the potential candidates are properly
appropriately valued and promoting the performance
assessed, selected and placed on-time as per required
based reward & recognition etc.
competencies (KSA – Knowledge, Skill & Attributes) and experience. Prime Bank has a recruitment policy that clearly states the criteria and procedures to recruit fresh and lateral
Disclosure of key policies with regard to remuneration of
entrants. The Bank has a Management Trainee Program which
directors, senior management and employees
is aimed to recruit outstanding fresh graduates and develop
All employees including the Senior Management employees
them as the future leaders of Prime Bank Ltd.
are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability. The remuneration also stresses on ensuring internal and external pay equity.
Ensuring adequate learning & development opportunities through effectively designed training programs and on-thejob experience PBL continuously thrives to transform Human Resources to
Meetings and work performed
Human Capital through appropriate learning and development
The committee holds meeting on a regular interval throughout
initiatives in every aspects of work area. HR Division regularly
the year. So, if any remuneration related issue needs committee’s
undertakes effectively designed training programs targeting
attention, it is placed as agenda for necessary review. However,
the right group of employees through proper training
if required, the meeting is held on need basis to review and
need assessment. The Bank has a separate HR Training &
discuss any remuneration related issue exclusively. In 2015,
Development Centre.
total 06 meetings were held by the Management Committee. Well-crafted compensation & benefits package to have a Disclosure of Remuneration of Directors, Chairman, Chief
positive impact on employees’ overall well-being
Executive and Senior Executives
PBL has a flexible compensation and benefits system that
The Directors of the Board are paid only honorarium for
helps ensure pay equity, is linked with performance that is
attending Board or Committee meetings. On the other hand,
understood by employees, and keeps in touch with employee
the Managing Director is paid salary and allowances as fixed
desires and what’s coveted in the market, while maintaining a
by the Bangladesh Bank (the details are shown in page number
balance with the business affordability.
316). The total cost related to employee compensation is
All employees are paid competitive remuneration package. The
shown in the page number 315.
structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability.
Human Capital Employees are the key driving force of Prime Bank’s continuous success
Ensuring horizontal and vertical career growth PBL always plans for employees so that they can advance their
A group of motivated and engaged employees with diverse
career goals. This includes advancement into more responsible
talents are the key asset of Prime Bank. Prime Bank is highly
positions. The company supports career opportunities
reputed in the market as an employer of choice. The Bank has
internally so that talented employees are placed in upgraded
positioned itself with a performance-driven rewarding work
positions and thereby enables them to deliver their greatest
culture; where employees are treated with respect and receive
value to the organization. In addition to vertical career growth,
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
employees may also grow horizontally. Whenever possible
the workplace and social protection for employees’ families,
Human Resources Division mobilizes employees across
better prospects for their personal development and social
different functions and branches; thus assisting them to
integration.
progress with varied skills and experience.
Communication to Shareholders & Stakeholders Succession planning for the talents in different layers of the
Company’s policy/strategy to facilitate effective
organizational hierarchy
communication with shareholders and other stakeholders
Besides
and
Prime Bank ensures that all shareholders are notified at least 2
development, PBL also gives effort to identify and retain the
encouraging
individual
employee
growth
weeks before the AGM so that all shareholders may attend on
human resources who can potentially be the successors of
the day. Also all other types of accounts (Quarterly and Half
mission critical roles. PBL acknowledges that Succession
yearly) or information are updated on the website and notified
Planning & Management is vital to the continued success of
to all stakeholders on a duly basis. The Bank tries to maintain
the Bank. PBL continuously assesses organizational, divisional
liaison with all major shareholders as much as possible and
and team capability gaps to identify, develop and retain the
ensures that all stakeholders are informed about the bank’s
successors in a timely manner to meet the demands of the
activities on a routine basis. PBL also engages with all types of
future.
stakeholders as much as possible to ensure that information is effectively communicated.
Comprehensive performance management program to
The
reward employees and drive further development
shareholders of the Bank and use the Bank’s AGM as further
Directors
appreciate
the
importance
of
general
opportunities to communicate with them. PBL provides copies PBL has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. This performance appraisal system is considered as crucial for the Bank as this is a very important tool to identify and distinguish the performers and non-performers. Prime Bank believes that a well-executed performance appraisal system can help reward the deserving employees, as
of the annual report in order that these are made available to them well in advance for detail and constructive discussion. It is the company’s policy to give the shareholders the opportunity to ask questions about its activities and prospects at the AGM. The Board also structures these meetings so that shareholders can vote separately on each matter, by proposing separate resolutions for each item to be considered.
well as help ensure further development program for the rest. Company’s policy on ensuring participation of shareholders Reward & recognition program to meet employees’ intrinsic psychological need for appreciation PBL has a well-designed Reward & Recognition program that gives special attention to employees’ actions, efforts, behavior and performance. It meets the intrinsic psychological need for appreciation of employees’ efforts and supports business strategy by reinforcing certain behaviors (e.g., extraordinary accomplishments) that contribute to Bank’s success.
in the Annual General Meeting and providing reasonable opportunity for the shareholder participation in the AGM PBL tries its utmost to ensure that all shareholders can participate in the AGM. Annual Reports are sent at least 2 weeks before the AGM to ensure all shareholders are notified about the event date, place and time. Also, PBL always ensures that AGM is held at a convenient place where all shareholders may attend. Notices to shareholders are made by publication in the daily newspapers and through the digital media as well. To
Grievances and counseling Since employee’s behavior affects work discipline, HR Division always encourages employees to report if they have any work
ensure compliance with regulatory bodies, PBL ensures that it publishes in two widely circulated newspapers in English and Bangla and sent to the stock exchanges and BSEC.
related grievance. In PBL there is formal procedure to address
PBL ensures effective communication with the shareholders
the employee grievance. Time to time HR Division also counsels
and encourages shareholder participation at the AGM. PBL
employees as part of its job as people’s advocate.
connects with the investors through AGM, EGM, Annual Report and Company’s website. All of the Bank’s publications to the market may be retrieved through the Company’s website.
Ensuring a decent workplace where employees can
Shareholders are offered the chance to interrogate the Board
participate in work with respect
regarding the operation of the Bank. They are also presented
Prime Bank believes that the business can grow favorably if
the ability to query the Company’s auditors concerning topics
the organization enables employees through creating and
linked to the audit of the Company’s financial statements at the
maintaining a decent workplace. In PBL, there is a decent
AGM.
work environment where employees can work with dignity,
Environmental and Social Obligation
have the freedom to express opinions, can participate in the
Description of the company’s policies and practices relating
decision making process that affect their lives, and receive
to social and environmental responsibility of PBL
equal treatment and opportunity. PBL ensures security in
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A natural and fresh environment, efficient use of reserves
been active in social activities throughout the year 2015, and
and appreciation for people’s well-being and safety are
will remain to do so in the future.
what PBL has always believed in. In harmony with this, PBL is constantly working towards decreasing consumption of energy (especially electricity, water and gas) at its branches, removal of use of hazardous substances from its practices and
Specific activities undertaken by the PBL regarding environmental and social responsibilities
reducing waste generation. The importance is on diminishing
PBL has always been active regarding its activities for the
paper transactions to the extent that the Credit Committee has
environment. One of its achievements was to make the Credit
already been made paperless, and PBL is moving forward and
Committee paperless in 2014. It is also in the process of issuing
thinking about implementing it more through the branches.
a green manual for how to make all branches and divisions
Board and its Committee Meetings are also made paperless
more environmental friendly. Also, solar panels have been set
through using in-house built software. One of the key objectives
up in quite a few branches as well, and the initiative has been
for financing manufacturing companies is to ensure that they
taken to install more solar panels in branches in the future.
try to lessen their carbon footprint.
Environmental activities during the year can be found more in
Bangladesh Bank has taken steps to inspire green banking
details in the Green Banking Report on page 206.
in Bangladesh through the issuance of guidelines on green
PBL has always been an active member of society and has tried
banking and Environmental Risk Management (ERM). It is
to enhance people’s lives and its employees as well. Prime Bank
always inspiring banks in lessening paper communications and
Foundation was solely initiated for the purpose of Corporate
fitting solar power system in branches and giving refinance
Social Responsibility. PBL’s social activities can be found
to the solar energy, bio-gas and effluent treatment plant (ETP)
on the Prime Bank Foundation chapter on page 176 and its
sectors at eased interest rates.
commitment to its employees can be found in the Employee’s
PBL has always been committed to the environment and also
Report on page 211.
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BOARD MEETING 2015 Sl No.
100
Name
Designation
Presence of Directors in the Meetings During their Tenure No. of Present Meetings
Absent
Remuneration /Meeting
Remuneration Drawn
Chairman
15
13
02
5000 X 11 8000 X 2
Tk. 71,000.00
Mr. Khandker Mohammed Khaled
Vice Chairman
15
01
14
5000 X 1
Tk. 5,000.00
Mr. M A Khaleque
Vice Chairman
15
--
15
--
-Tk. 51,000.00
1.
Mr. Azam J Chowdhury
2. 3. 4.
Mr. Md. Nader Khan
Director
15
09
06
5000 X 7 8000 X 2
5.
Quazi Sirazul Islam
Director
15
14
01
5000 X 11 8000 X 3
Tk. 79,000.00
6.
Mr. Md. Shirajul Islam Mollah
Director
15
08
07
5000 X 7 8000 X 1
Tk. 43,000.00
7.
Mr. Mafiz Ahmed Bhuiyan
Director
15
12
03
5000 X 10 8000 X 2
Tk. 66,000.00
8.
Mr. Md. Shahadat Hossain
Director
15
15
--
5000 X 12 8000 X 3
Tk. 84,000.00
9.
Mrs. Marina Yasmin Chowdhury
Director
15
10
05
5000 X 8 8000 X 2
Tk. 56,000.00
10.
Mrs. Nasim Anwar Hossain
Director
15
14
01
5000 X 11 8000 X 3
Tk. 79,000.00
11.
Mrs. Salma Huq
Director
15
09
06
5000 X 7 8000 X 2
Tk. 51,000.00
12.
Mr. Nafis Sikder
Director
15
01
14
5000 X 1
Tk. 5,000.00
13.
Mr. Imran Khan
Director
15
04
11
5000 X 2 8000 X 2
Tk. 26,000.00
14.
Mr. Md. Mushtaque Ahmed Tanvir (Inducted on 13.05.2015)
Director
10
07
03
5000 X 4 8000 X 3
Tk. 44,000.00
15.
Mr. Md. Waheed Murad Jamil (Inducted on 28.09.2015)
Director
02
02
--
8000 X 2
Tk. 16,000.00
16.
Mr. Tarique Ekramul Haque (Inducted on 10.12.2015)
Director
01
--
01
--
--
17.
Mr. Shamsuddin Ahmed Ph.D. (Inducted on 01.04.2015)
Independent Director
12
12
--
5000 X 9 8000 X 3
Tk. 69,000.00
18.
Dr. G M Khurshid Alam (Inducted on 01.04.2015)
Independent Director
12
12
--
5000 X 9 8000 X 3
Tk. 69,000.00
19.
Mr. M Farhad Hussain FCA (Inducted on 01.04.2015)
Independent Director
12
09
03
5000 X 6 8000 X 3
Tk. 54,000.00
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
BOARD MEETING 2015 Sl No.
Name of The Past Directors
Designation
Presence of Directors in the Meetings During their Tenure No. of Present Meetings
Absent
Remuneration /Meeting
Remuneration Drawn
1.
Mrs. Nazma Haque
Director
14
09
05
5000 X 8 8000 X 1
TK. 48,000.00
2.
Mrs. Muslima Shirin
Director
04
03
01
5000 X 3
TK. 15,000.00
3.
Prof. Ainun Nishat
Director
03
02
01
5000 X 2
TK. 10,000.00
4.
Prof. Dr. Md. Aslam Bhuiyan
Director
03
02
01
5000 X 2
TK. 10,000.00
5.
Mr. Manzur Murshed
Director
03
02
01
5000 X 2
TK. 10,000.00
Remuneration /Meeting
Remuneration Drawn
EXECUTIVE COMMITTEE MEETING 2015 Presence of Directors in the Meetings During their Tenure Sl No.
Name
Designation
No. of Present Meetings
Absent
Chairman
22
21
01
5000 X 15 8000 X 6
TK.123,000.00
Vice Chairman
22
08
14
5000 X 5 8000 X 3
TK.49,000.00
Mr. Md. Shirajul Islam Mollah
Member
22
16
06
5000 X 11 8000 X 5
TK.95,000.00
4.
Mr. Mafiz Ahmed Bhuiyan
Member
22
19
03
5000 X 13 8000 X 6
TK.113,000.00
5.
Mr. Md. Shahadat Hossain
Member
22
22
--
5000 X 16 8000 X 6
TK.128,000.00
6.
Mrs. Salma Huq
Member
22
06
16
5000 X 5 8000 X 1
TK.33,000.00
7.
Mrs. Nasim Anwar Hossain
Member
22
19
03
5000 X 14 8000 X 5
TK.110,000.00
Remuneration /Meeting
Remuneration Drawn
1.
Quazi Sirazul Islam
2.
Mr. Imran Khan
3.
AUDIT COMMITTEE MEETING 2015 Sl No.
Name
Designation
Presence of Directors in the Meetings During their Tenure No. of Present Meetings
Absent
1.
Mr. Shamsuddin Ahmed Ph.D. (Included on 23.04.2015)
Chairman
07
07
--
5000 X 5 8000 X 2
TK. 41,000.00
2.
Mr. Khandker Mohammed Khaled
Member
09
--
09
--
--
3.
Mr. Md. Nader Khan (Included on 23.04.2015)
Member
07
05
02
5000 X 3 8000 X 2
TK. 31,000.00
4.
Dr. G M Khurshid Alam (Included on 23.04.2015)
Member
07
07
--
5000 X 5 8000 X 2
TK. 41,000.00
5.
Mr. M Farhad Hussain FCA (Included on 23.04.2015)
Member
07
07
--
5000 X 5 8000 X 2
TK. 41,000.00
101
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
AUDIT COMMITTEE MEETING 2015 Sl No.
Name of Past Member
Designation
Presence of Directors in the Meetings During their Tenure No. of Present Meetings
Absent
Remuneration /Meeting
Remuneration Drawn
1.
Prof. Ainun Nishat
Chairman
02
02
--
5000X2
Tk.10,000.00
2.
Mr. M A Khaleque
Member
01
01
--
5000X1
Tk.5,000.00
3.
Prof. Dr. Md. Aslam Bhuiyan
Member
02
01
01
5000X1
Tk.5,000.00
4.
Mr. Manzur Murshed
Member
02
02
--
5000X2
Tk.10,000.00
RISK MANAGEMENT COMMITTEE MEETING 2015 Sl No.
1.
Name
Mrs. Nasim Anwar Hossain
Designation
Presence of Directors in the Meetings During their Tenure No. of Present Meetings
Absent
Remuneration /Meeting
Remuneration Drawn
5000 X 4 8000 X 1
TK. 28,000.00
Chairperson
05
05
--
Member
05
01
04
5000 X 1
TK. 5.000.00 TK. 18,000.00
2.
Mr. Khander Mohammed Khaled
3.
Mr. Shamsuddin Ahmed Ph.D. (Included on 23.04.2015)
Member
04
03
01
5000 X 2 8000 X 1
4.
Dr. G M Khurshid Alam (Included on 23.04.2015)
Member
04
04
--
5000 X 3 8000 X 1
TK. 23,000.00
5.
Mr. M Farhad Hussain FCA (Included on 23.04.2015)
Member
04
02
02
5000 X 2
TK. 10,000.00
Remuneration
Remuneration
/Meeting
Drawn
TK. 5,000.00
TK. 5,000.00
RISK MANAGEMENT COMMITTEE MEETING 2015 Sl No.
1.
102
Name of Past Member
Mr. Mafiz Ahmed Bhuiyan
Designation
Director
Presence of Directors in the Meetings During their Tenure No. of Present Meetings 01
01
Absent --
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
THE PATTERN OF SHAREHOLDING ALONG WITH NAME WISE DETAILS OF: i) Parent/Subsidiary/Associated Company and other related: Nil ii) Shareholding of CEO, CFO, Company Secretary & Head of Internal Audit: Nil Sl No. 1.
Name of Executives
% of Shares as at 31.12.2015
Chief Executive Officer and his spouse and minor children
-
2.
Chief Financial Officer and his spouse and minor children
-
3.
Company Secretary and his spouse and minor children
-
4.
Head of Internal Audit and his spouse and minor children
-
iii) Shareholding of Directors: Sl No
Name of the Directors
Designation
% of shares at 31.12.2015
01
Mr. Azam J Chowdhury (Representative of East Coast Shipping Lines Limited)
Chairman
2.00 (share holding of East Coast Shipping Lines Limited)
02
Khandker Mohammad Khaled
Vice Chairman
2.78
03
Mr. M.A. Khaleque
Vice Chairman
2.12
04
Quazi Sirazul Islam
Director
2.00
05
Mrs. Nasim Anwar Hossain
Director
2.27
06
Mr. Md. Nader Khan
Director
3.69
07
Mr. Md. Shahadat Hossain
Director
2.70
08
Mr. Md. Shirajul Islam Mollah
Director
2.01
09
Mrs. Marina Yasmin Chowdhury
Director
2.05
10
Mr. Mafiz Ahmed Bhuiyan
Director
2.00
11
Mrs. Salma Huq
Director
3.13
12
Mr. Nafis Sikder
Director
2.51
13
Mr. Imran Khan
Director
2.00
14
Mr. Waheed Murad Jamil (Representative of Mawsons Limited)
Director
2.00 (Shareholding of Mawsons Limited)
15
Mr. TariqueEkramul Haque
Director
2.00
16
Mr. Mohammad Mushtaque Ahmed Tanvir (Representative of Uniglory Cycle Industries Ltd.)
Director
2.02 (Shareholding of Uniglory Cycle Industries Ltd.)
17
Mr. Shamsuddin Ahmad, Ph.D
Independent Director
0.00
18
Dr. G. M. Khurshid Alam
Independent Director
0.00
19
Mr. M. Farhad Hussain, FCA
Independent Director
0.00
20
Mr. Ahmed Kamal Khan Chowdhury
Managing Director
0.00
iv) Shareholding of Senior Executive (Top five salaried executives other than CEO, CFO, CS, HIA): Sl No.
Name of Executives
% of Shares as at 31.12.2015
1.
Mr. Md. Tabarak Hossain Bhuiyan, Deputy Managing Director
-
2.
Mr. Habibur Rahman, Deputy Managing Director
-
3.
Mr. Rahel Ahmed, Deputy Managing Director
-
4.
Mr. Md. Touhidul Alam Khan, Deputy Managing Director
-
5.
Mr. Ahmed Shaheen, Deputy Managing Director
-
v) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details) - Nil
103
C o r p o ra t e G ove r n a n c e
104
PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
REPORT ON COMPLIANCE OF BSEC’S NOTIFICATION ON CORPORATE GOVERNANCE BSEC Checklist: (Report under Condition No. 7.00)
Condition No.
Title
Compliance Status (Put in the appropriate column) Complied
1.0
Board of Directors
1.1
Board’s size shall not be less than 5 and more than 20
1.2
Independent Director
Remarks (if any)
Not complied
-
1.2 (i)
Independent director: At least 1/5th of the total number of directors
1.2 (ii)
For the purpose of this clause “independent director” means a director.
1.2 (ii) a)
Independent director does not hold any share or holds less than one percent (1%) shares of total paid up capital.
1.2 (ii) b)
Independent Director is not a sponsor of the company and is not connected with the company’s Sponsor Or Director Or Shareholder who holds 1% or more shares of the company (certain family members are also required to comply with this requirement).
1.2 (ii) c)
Independent director does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies.
1.2 (ii) d)
Independent directors are not the members, directors or officers of any stock exchange.
1.2 (ii) e)
Independent director is not the shareholder, director or officers of any member of Stock Exchange or an Intermediary of the capital market.
-
1.2 (ii) f)
Independent director is/was not the partners or executives during preceding 3 (three) years of concerned company’s statutory audit firm.
--
-
1.2 (ii) g)
Independent directors is not the independent director in more than 3 (three) listed companies.
-
1.2 (ii) h)
Independent director is not convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a non-bank financial institution (NBFI).
-
1.2 (ii) i)
Independent director has not been convicted for a criminal offence involving moral turpitude.
-
1.2 (iii)
The independent director shall be appointed by the Board of Directors and approved by the Shareholders in the AGM.
1.2 (iv)
The post of independent directors cannot remain vacant for more than 90 days.
-
1.2 (v)
The Board shall lay down a Code of Conduct of all Board Members and Annual Compliance of the Code to be recorded.
-
-
-
1.2 (vi)
The tenure of office of an Independent Directors shall be for a period of 3 (three) years which may be extended for 1 (one) term only.
1.3 1.3 (i)
Qualification of Independent Director (ID) Independent director shall be knowledgeable individual with integrity who is able to ensure required compliance.
105
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Condition No.
Title
Compliance Status (Put in the appropriate column) Complied
Remarks (if any)
Not complied
The independent director must have at least 12 (twelve) years of 1.3 (ii)
corporate management/ professional experiences along with
-
N/A
-
-
other requisites. 1.3 (iii) 1.4 1.5
In special cases above qualification may be relaxed by the Commission Separate Chairman and CEO and their clearly defined roles and responsibilities. Directors Report to Shareholders
1.5 (i)
Industry outlook and possible future developments in the industry
-
1.5 (ii)
Segment-wise or product-wise performance.
-
1.5 (iii)
Risks and concerns
-
.
1.5 (iv)
Discussion on cost of goods sold, gross profit margin and net profit margin
1.5 (v)
Discussion on continuity of any Extra-Ordinary gain or loss
PBL does not have such gain or loss.
1.5 (vi)
Basis for related party transaction- a statement of all related party transactions should be disclosed in the annual report
-
1.5 (vii)
Utilization of proceeds from public issues, right issues and/ or through any others instruments.
1.5 (viii)
An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Offer, Direct Listing etc.
N/A
-
1.5 (ix)
If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.
N/A
-
1.5 (x)
Remuneration to directors including independent directors.
-
1.5 (xi)
The financial statements prepared by the management of the company present fairly its state of affairs, the results of its operation, cash flows and changes in equity.
-
1.5 (xii)
Proper books of account of the company have been maintained.
-
-
.
Appropriate accounting policies have been consistently applied in 1.5 (xiii)
preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards
1.5 (xiv)
106
(IFRS)/Bangladesh Financial Reporting Standards (BFRS), as --applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.
1.5 (xv)
The system of internal control is sound in design and has been effectively implemented and monitored.
-
1.5 (xvi)
There are no significant doubts upon the company's ability to continue as a going concern.
-
1.5 (xvii)
Significant deviations from the last year’s operating results of the company shall be highlighted and the reasons thereof should be explained.
-
1.5 (xviii)
Key operating and financial data of at least preceding 5 (five) years shall be summarized.
-
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Condition No.
Title
C o r p o ra t e G ove r n a n c e
Compliance Status (Put in the appropriate column) Complied
1.5 (xix) 1.5 (xx) 1.5 (xxi) 1.5 (xxi) a)
If the company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given. The number of Board meetings held during the year and attendance by each director shall be disclosed.
Remarks (if any)
Not complied
N/A
-
-
The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by: Parent/Subsidiary/Associated Companies and other related parties (name wise details);
-
1.5 (xxi) b)
Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);
-
1.5 (xxi) c)
Executives (top five salaried employees of the company other than stated in 1.5(xxi)b);
-
1.5 (xxi) d)
Shareholders holding ten percent (10%) or more voting interest in the company (name wise details).
-
1.5 (xxii)
In case of appointment/re-appointment of a Director the Company shall disclose the following information to the Shareholders:
1.5 (xxii) a)
a brief resume of the Director;
-
1.5 (xxii) b)
Nature of his/her expertise in specific functional areas.
-
1.5 (xxii) c)
Names of companies in which the person also holds the directorship and the membership of committees of the board.
-
-
2.0
Chief Financial Officer, Head of Internal Audit & Company Secretary
2.1
Appointment of CFO, Head of Internal Audit and Company Secretary and their clearly defined roles, responsibilities and duties.
2.2
Attendance of CFO and the Company Secretary at Board of Directors meeting
3
Audit Committee:
3 (i)
Audit Committee shall be the sub-committee of the Board of Directors.
3 (ii)
The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the Company and in ensuring a good monitoring system within the business.
3 (iii)
The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.
3.1
-
Constitution of the Audit Committee
3.1 (i)
The Audit Committee shall be composed of at least 3 members.
-
3.1 (ii)
Constitution of Audit Committee with Board Members including one Independent Director.
-
3.1 (iii)
All members of the Audit Committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management experience.
3.1 (iv)
Filling of Casual Vacancy in Committee
-
3.1 (v)
The Company Secretary shall act as the secretary of the Committee.
-
3.1 (vi)
The quorum of the Audit Committee meeting shall not constitute without at least 1 independent director.
-
107
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Condition No.
Title
Compliance Status (Put in the appropriate column) Complied
3.2 3.2 (i)
3.2 (ii)
3.3
Not complied
Chairman of the Audit Committee Chairman of the Audit Committee shall be an Independent Director. Chairman of the audit committee shall remain present in the Annual General Meeting (AGM).
-
-
Role of Audit Committee
3.3 (i)
Oversee the financial reporting process.
3.3 (ii)
Monitor choice of accounting policies and principles.
3.3 (iii)
Monitor Internal Control Risk management process.
3.3 (iv)
Oversee hiring and performance of external auditors.
3.3 (v)
Review along with the management, the annual financial statements before submission to the board for approval.
3.3 (vi)
Review along with the management, the quarterly and half yearly Financial Statements before submission to the Board for approval.
3.3 (vii)
Review the adequacy of internal audit function.
3.3 (viii)
Review statement of significant related party transactions submitted by the management.
3.3 (ix)
Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors.
3.3 (x)
When money is raised through Initial Public Offering (IPO)/ Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/ applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc.), on a quarterly basis, as a part of their quarterly declaration of financial results.
N/A
-
-
3.4.
Reporting of the Audit Committee
3.4.1
Reporting to the Board of Directors
3.4.1 (i)
The Audit Committee shall report on its activities to the Board of Directors.
3.4.1 (ii)
The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:
-
3.4.1 (ii) a)
Report on conflicts of Interests.
3.4.1 (ii) b)
Suspected or presumed fraud or irregularity or material defect in the internal control system;
3.4.1 (ii) c)
Suspected infringement of laws, including securities related laws, rules and regulations;
NIL
3.4.1 (ii) d)
Any other matter which shall be disclosed to the Board of Directors immediately.
NIL
3.4.2
Reporting of anything having material financial impact to the Commission.
NIL
Reporting to the Shareholders and General Investors.
NIL
3.5 4
108
Remarks (if any)
External/Statutory Auditors should not be engaged in:
4 (i)
Appraisal or valuation services or fairness opinions.
-
4 (ii)
Financial information systems design and implementation.
-
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Condition No.
C o r p o ra t e G ove r n a n c e
Compliance Status (Put in the appropriate column)
Title
Complied
Remarks (if any)
Not complied
4 (iii)
Book-keeping or other services related to the accounting records or financial statements.
-
4 (iv)
Broker-dealer services.
-
4 (v)
Actuarial services.
-
4 (vi)
Internal audit services.
-
4 (vii)
Any other service that the Audit Committee determines.
-
4 (viii)
No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of
-
their audit assignment of that Company. 4 (ix) 5
Audit/certification
services
on
compliance
of
corporate
governance as required under clause (i) of condition No.7
Subsidiary Company
5 (i)
Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company.
-
5 (ii)
At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company.
-
5 (iii)
The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company.
-
5 (iv)
The Minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the Subsidiary Company also.
-
5 (v)
The Audit Committee of the holding company shall also review the Financial Statements, in particular the investments made by the Subsidiary Company.
-
6
Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO): They have reviewed financial Statements for the year and that to
-
-
-
-
7 (i)
The company shall obtain a Certificate from a Professional Accountant/Secretary (CA/CMA/CS) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.
-
7 (ii)
The directors of the company shall state, in accordance with the Annexure attached, in the directors' report whether the company has complied with these conditions.
-
6 (i)
the best of their knowledge and belief: These financial statements do not contain any materially untrue
6 (i) a)
6 (i) b)
statement or omit any material fact or contain statements that might be misleading. These financial statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.
6 (ii)
7
There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct. Reporting and Compliance of Corporate Governance:
109
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
MANAGEMENT TEAM
110
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
CORPORATE MANAGEMENT
Syed Faridul Islam Deputy Managing Director
Rahel Ahmed Deputy Managing Director
Ahmed Shaheen Deputy Managing Director
Ahmed Kamal Khan Chowdhury Managing Director
Md. Tabarak Hossain Bhuiyan Deputy Managing Director
Habibur Rahman Deputy Managing Director
Md. Golam Rabbani Deputy Managing Director
Md. Touhidul Alam Khan Deputy Managing Director
111
C o r p o ra t e G ove r n a n c e
MANAGEMENT COMMITTEE
ASSET LIABILITY COMMITTEE
112
PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
MANAGEMENT RISK COMMITTEE
IT STEERING COMMITTEE
113
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
MD Ahmed Kamal Khan Chowdhury
DMD Md. Tabarak Hossain Bhuiyan Habibur Rahman Md. Golam Rabbani Rahel Ahmed Md. Touhidul Alam Khan Ahmed Shaheen Syed Faridul Islam
SEVP Md. Ezaz Hossain Hasan Mohiuddin Bhuiyan Md. Iqbal Hossain Md. Anwarul Islam Kazi Mahmood Karim Mohammed Ehsan Habib A. O. M. Rashed Ziaur Rahman Mohd. Rafat Ullah Khan
EVP Md. Shahin Alam Abu Ashraf Siddique Sk. Matiur Rahman Imtiaz Ahamed Bhuiyan Md. Amzad Hossain Shahidur Rahman Khan Nuhal Ahmed Choudhury A K M Kamal Uddin Syed Md. Nazmul Huque Muhammad Anowarul Islam Sheikh Mortuza Ahmed Md. Omar Kabir Mohammad Jashim Uddin Mir Md. Hassanul Zahed Md. Mashiur Rahman Abu Zafar Md. Sheikhul Islam Farhad Uddin Md. Shahadat Hossain Md. Shahjahan Majumder Syed Tofail Ali Abdus Salam Khan S. H. Mukhter Ahmad Md. Iftekhar Uddin
SVP Md. Moniruzzaman Md. Hafizur Rahman Mallick Mohd. Afzal Hossain Anwarul Hoque Md. Milon Miah Md. Shahidul Islam Md. Omar Faruque Md. Ramiz Uddin Miah Sarqume Mohd. Kabir Md. Mahiuddin Ahmed A B M Habibur Rahman Kazi Tozammel Huq Syed Sahadat Hossain Md. Giash Uddin Mozammel Hoque Mohammed Zakaria Md. Salah Uddin Md. Shamsuddin Md. Amir Hossain Majumder
114
Wasequddin Ahmed Chowdhury Farhad Ahmad Khan Mohammed Abul Kalam Kamruzzaman Khairul Kabir Muhammad Muzahid Hossain Md. Habibur Rahman Syeda Nazma Parvin Md. Abdul Quddus Md. Shahidul Alam Kazi Zillur Rahman Md. Amanullah Mohd. Jamil Hossain Md. Tarique Parvez Jewel Taher Jamil Md. Shaiful Hossain Md. Abdul Matin Md. Safiul Amin Md. Abul Kasem Md. Feroz Al Azad Nurul Momen Khan
VP Md. Toufiqur Rahman Ayeni Md. Moniruzzaman Md. Kabirul Hasan Md. Shahidul Islam Ashraf Uddin Ahmed Sharif Uddin Choudhury Dewan Arfanul Alam Mollah Farid Ahmed Md. Ibrar Md. Masudur Rahman Kazi Azharul Islam A S M Azizul Karim Md. Jafar Hasan Md. Showkat Kamal Sarker A K M Enamul Haque Md. Abdul Bari Mollah Abu Taher Md. Zakaria Harunur Rashid Chowdhury Syed Tazul Islam Mohammad Yaqub Mostafa Hasan Kazi Moinul Haque Dorothy Sultana A N M Baki Billah Mohammad Aminul Islam Morshed Ahammed Ali Mohammad Nurul Huda Debashis Chakraborty Md. Mozahid Kabir Md. Golam Haider Md. Khaled Anwar Md. Rezaul Haque Md. Firdous Alam Amirul Alam Chowdhury Md. Reza Hossain Mohammed Abu Shayem Md. Arman Uddin Bhuiyan Mohammad Nazim Uddin Md. Tanveer Reza Bidyut Kumar Das Md. Mamunur Rashid Md. Iqbal Hasan-Ul-Huq Tofail Ahmed Farid Ahmed Md. Mahbub Alam Sharmin Akther
Md. Abul Kalam Azad
Nighat Mumtaz
Md. Nur-A-Kaosar
Ahmed Masudul Goni
Md. Hasanuzzaman Chowdhury Fakhruddin Mahmud Siddique Mohammad Masud Shahjahan Mohammad Aminur Rahman Faisal Nurul Amin Saif-Ul-Alam Md. Al-Amin Tanvir Ahmed Mahboob Muhammad Rashed Iqbal Md. Moniruzzaman
SAVP A H M Be-darul Alam Goni Md. Alamgir Ajmal Hoque Chowdhury Md. Yusuf Ali Md. Ariful Hoque Md. Ahsan Habib Md. Rabiul Islam Md. Rezwan Uddin Swhel Md. Nazrul Islam Mohammad Shawkat Ali Florence Sutopa Majumder Shah Mohd. Zakir Hossain Syed Delwar Hossain Md. Kamrul Islam Kamrun Nahar Md. Mainul Kabir S M Khurshed Alam A K M Abdul Alim Ibne Khabir Ekram Ullah Chowdhury Md. Touhiduzzaman Mohammad Jahangir Bhuiyan Nazrul Islam Md. Hashmot Ali Mollah Md. Moinul Hasan Mohammad Anisur Rahman A K M Khairul Basher Md. Aminur Rahman Akanda Md. Rabiul Ahasan Sirajul Hoque Md. Nazrul Islam Mohammad Ashrafuzzaman S M Parvez Kabir Md. Mobasshirul Islam Md. Nuruzzaman Md. Abdur Raafi A T M Ahsan Khandoker Raihan Ali Md. Taj Uddin Ahmed Md. Syadur Rahman Md. Ruhul Quisth Syed Mahammed Ali Suhel Amal Chandra Basak Md. Emdad Hossain Md. Mizanur Rahman Mohammad Nazmul Hossain Mohammad Kamal Uddin Mohammad Khurshid Alam Sharmin Ahmed Md. Saidur Rahman Dipu K. M. Sakhawat Hossain Md. Rashaduzzaman Nahida Sultana Sabina Rahman Khan Mohammed Samiullah
AVP Mohd. Baqui Billah Md. Walidul Islam Md. Saidur Rahman Mohammad Abdus Sattar Imran Ahmed Nazneen Akhter S M Shahidul Islam Shamima Pervin Md. Shamsul Hoque Md. Rejaul Karim Afzalun Nahar Md. Mizanur Rahman M Faroque Hossain Suhrawardy Mohammad Raihan Shaheed Quazi Anwarul Azim A B M Saidul Islam Siddique Ahmed Md. Rezaul Karim Md. Adil Uddin Shah Mohammad Mohsin Mohammad Rafiqul Islam Md. Mobinul Haque Mohammad Sazzad Hossain Khan Md. Abu Muhit Md. Mahfuzur Rahman Masood Mizan Md. Saiful Hasan Md. Faridul Islam Mir Mobashir Hussain A K M Humyun Kabir Mohammad Noor-E-Alam Siddique Md. Nasir Uddin Ashis Bhattacharjee Mohammad Sazzad Hossain Shahid Uddin Ahmed Munshi Abdus Salim Rupan Kanti Paul Mohammad Abu Ali Samiul Haque Giash Uddin Ahmed Mohammad Shakhawat Hossain Arifa Jabeen S M Shahidul Islam Mohammad Mamunur Rashid Muhammad Fazlul Hoque Ibrahim Ali Mohammed Javed Iqbal Sabina Easmin Khondaker Abdul Matin Masud Uddin Ahmed Md. Ariful Islam Sarafat Ullah Muhammad Mahmud Hasan Kazi Muhammad Rezaul Karim Md. Fazle Rabby Md. Abu Sayeed Mohammad Mamunur Rahman Md. Hasan Jamal Mohammad Badrul Anam Shubir Kumar Barua Salah Uddin Iftikhar Ahmed Chowdhury Mahmood Khan Takiyan Chowdhury Nusrat Hossain
Head of Counter Guarantee
Segment Head West-I & II
Financial Administration Division
HR Division
Public Relations Department
Head of Offshore Banking
Segment Head East
(e.g. NGO/UN & Multilateral Agencies)
Agriculture & Green Banking
Head of Cash Management
Segment Head South
Area Head Chittagong
New Initiative
Head of Transaction Banking
Marketing Division
Head of Structured Finance
Head of Trade Service
Head of Treasury
DMD Structured Finance, Trade, Treasury & Transaction Banking
Segment Head North
DMD Commercial Banking
Area Head Dhaka
DMD Corporate & Institutional Banking
Wholesale Banking
BPM+Management Reporting & MIS
SME Banking Division
Information Security Division
IT Infrastructure & Planning
Retail Banking Division
Credit Administration Division
Monarch
Head of SmallMidium Segment
Vigilence Department
Compliance Department
Monitoring Department
ICC & Govt. Relations
DMD ICC & Govt. Relations
Head of LargeMidium Segment
IT Service & Support
ADC Department
Card Department
Consumer Banking Division
IT Project Management
Head of Small Segment
All Branches
Head of Operations (Branches)
DMD SME & Consumer Banking
Risk Management Division
Credit Risk Management Division
DMD & CRO
Managing Director
Board
International Division
Head of Small Corporate
Islamic Banking Division
COO
Audit
AML Department
Operations Division
Head of Women Entrepreneur Development Unit
Facility Management Division
Legal Division
Recovery Division
DMD Recovery, Legal & FMD
Board Secretariat
Audit Committee of the Board
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CORPORATE ORGANOGRAM
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GROUP CORPORATE STRUCTURE
Bangladeshi Companies
Prime Bank Investment Ltd. (99.99%)
Prime Bank Securities Ltd. (95%)
Prime Bank Limited
Prime Bank Exchange Co. Pte. Ltd. Singapore (100%)
Prime Exchange (UK) Ltd. (100%)
Overseas Companies
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Prime Finance (Hong Kong) Ltd. (100%)
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CEO/CFO DECLARATION TO THE BOARD 26th April, 2016
Board of Directors Prime Bank Limited Adamjee Court Annex Building-2 119-120 Motijheel Commercial Area Dhaka-1000
SUB: CEO/CFO DECLARATION TO THE BOARD
The following is provided to the Board of Directors of Prime Bank Limited in our capacity as the persons responsible for performing the functions of Managing Director & CEO and Chief Financial Officer of the Bank. In accordance with the notification of Bangladesh Securities and Exchange Commission No.SEC/ CMRRCD/2006-158/134/ Admin/44 dated 07, August, 2012 we declare that for the financial year ended 31 December, 2015: i.
ii.
We have reviewed the financial statements for the year and that to the best of our Knowledge and belief:
these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws;
There are, to the best of knowledge and belief, no transactions entered into by the Bank during the year which are fraudulent, illegal or violation of the Bank’s code of conduct.
Ahmed Kamal Khan Chowdhury Managing Director & CEO
Chief Financial Officer
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REPORT ON RISK MANAGEMENT BY CHIEF RISK OFFICER Report on Risk Management by Chief Risk Officer
before sanctioning or renewing any credit proposals. Since
Identifying, measuring, monitoring and controlling various type
the Bank has significant exposure in RMG sector, a separate Merchandiser Team has been formed with people having
of risks are vital for ensuring the health of a Bank as well as the whole financial systems. In addition to the traditional risks faced by the Banks in credit and market risks, various operation risks are created due to following reasons:
adequate experience in RMG operation. This has enhanced the Bank’s capability to identify risks and mitigate them on time. In order to shift to risk adjusted return on capital, borrower’s rating
Increasing use of automated technology
is considered while considering any price adjustment. This is encouraging the borrowers to come under rating procedure of
Growing importance of IT integration and shared
rating agencies.
services across financial institutions and entities
Necessity of reducing earnings volatility and achieving cost efficiencies
Shifting from vanilla type products to technology based products which are creating more complexity in product and product development
Increasing customer needs
Evolving outsourcing arrangements and increasing dependency
Increasing focus by regulators on legal, fraud, and compliance issues
This has necessitated development of enterprise wise risk management framework for the Banks. Prime Bank Limited (PBL) is increasingly focusing on development of appropriate risk management framework for managing risks of the Bank. Risk Management Division has been set up which shall monitor and report various type of risks and develop appropriate risk culture within the Bank. The Division has been working on identifying the gaps in the risk management procedure of the Bank, placing those issues to Risk Management Unit comprising of members from all key business / risk areas and following up for rectification. Major activities of RMD include preparing Risk Management Paper, performing stress testing, vetting of different Product Program Guidelines, process manuals, developing various risk models and acting as an operation layer for Internal Capital Adequacy Assessment.
Operational Risk Management Internal Control, Compliance & Government Relations Division is responsible for monitoring the transactions of the branches as per guidelines to develop a compliance culture. The division has adequate manpower for monitoring the operational risks in banking transactions and the whole monitoring process is being done through both off-site and on-site supervision.
Information Technology Risk PBL has an IT audit team, which has been formed as per the Central Bank’s guideline. The team conducts IT Audit in each branch on a periodic basis and provides suggestions to higher management. Moreover, independent IT Security Department has been formed to assess the IT related risks faced by the Bank and suggest appropriate measures to mitigate risk.
Market Risk Market risk is actively monitored by the Treasury Division of the Bank. As per stress testing, the Bank is unlikely to face any major risks in liquidity, interest rates and foreign exchange. A system based Value at Risk (VaR) Model is being used by the Bank to assess the risk related to the Foreign Exchange position. Treasury Mid office monitors risk limits including position limits and stop loss limits for the trading book and reviews periodically. Interest rate risk is monitored through the use of re-pricing gap analysis and duration analysis.
Credit Risk Management Increased focus has been given in managing Credit Risk Management. Total Credit Administration Process has been
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Environmental & Social Risk
centralized which have mitigated various risks arising from human error in branch banking. Similarly, all Branches came under the umbrella of centralized Trade Service process during the year 2015. To reduce the residual risks the security related documents were revalidated by legal firms and also cross
PBL has incorporated ERM policy in the CRM policy manual and made Environmental Risk Rating (EnvRR) and Environmental Due Diligence (EDD) mandatory in the credit proposals. During the year 2015, 192 borrowers have been assessed for their environmental risk. Prime Bank has financed various projects which are environment friendly. During 2015, the bank has
examined by the independent audit firms. Corrective measures have been taken as per the audit report issued. Periodical Stock verification and insurance coverage has been made mandatory
extended credit facility for vermin-compost production in Jessore. Moreover, the Bank has financed BDT 6467.72 million in 22 projects having ETP. The Bank has already installed solar
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panels at 25 branches as well as 13 ATM booths and SME unit
Concentration Risk, Liquidity Risk, Reputation Risk, Strategic
offices as part of its commitment to the usage of renewable
Risk, Settlement Risk etc. PBL assessed its additional capital
energy resources. Human Resource Training & Development Center of the Bank arranged 13 Green Banking training
requirement under Pillar 2 and submitted the statements on Internal Capital Adequacy Assessment Process (ICAAP) to
Programs for 340 employees during the year 2015 to familiarize
Bangladesh Bank. PBL has also been conducting stress testing
with the Green Banking aspects. Yet our effort will continue for
on its financials on quarterly basis and reporting the outcomes
making our business sustainable which will ultimately improve
to Bangladesh Bank, as a part of Pillar 2 risk management.
the quality of “life” in the long run. Pillar 3: Market Discipline Pillar 1 Risk Management
PBL always delivers the appropriate disclosures not only to
PBL has been maintaining capital above the minimum capital
meet the regulatory requirements but also as per international
requirement as against Credit, Market and Operational risk. The Bank has proper credit risk mitigation process in place.
best practices. Disclosures on the position of PBL’s risk profile, capital adequacy, and risk management system has been
Moreover, PBL is consistently trying to rate its corporate borrowers not only to have expert opinion on the borrowers but also to have capital relief. As of December 2015, PBL has 47.91 percent of corporate borrowers rated through External Credit Assessment Institutions (ECAIs). Through borrower rating, PBL achieved capital relief of 8,679.42 million during 2015 compared to capital relief of 6,970.10 million during 2014. In terms of Capital Adequacy, PBL was well ahead of minimum capital requirement of 10 percent in all the four quarters of 2015, to be exact Capital to Risk weighted Asset Ratio of the Bank was 12.94% at the end of March, 12.41% at the end of June, 13.27% at the end of September and 12.83% at the end of December, 2015. Besides, Proper organizational structure and procedures are also in place to ensure mitigation of operational risk and market risk.
included in this Annual Report also. As per the Bank Companies Act 1991 (Amended up to 2013), and as guided by the Bangladesh Bank BRPD Circular no. 11 dated October 27, 2013 the Risk Management Committee (RMC) of the Board has been formed to look after the risk management issues of the Bank.
Pillar 2 Risk Management The key principle of the Supervisory Review Process (SRP), the second Pillar of Basel-II is that “Banks shall have a process for assessing overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital at an adequate level”. SRP covers additional risks like Residual Risk,
Revised Regulatory Capital Framework for banks in line with Basel III Bangladesh Bank vide BRPD Circular No – 18 dated December 21, 2014 issued “Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III)” with effect from January 01, 2015. The new guidelines aimed to strengthen the quality and quantity of the regulatory capital base and enhance the risk coverage of the capital framework. PBL is well poised for implementing Basel III phase by phase during the period 2015-2019. It is mentionable that, PBL is maintaining much higher Common Equity Tier-1 (CET1) capital ratio than the prescribed minimum ratio of 4.5% by Bangladesh Bank. Last of all but not the least, PBL always had the reputation of being one step ahead and committed to continue the same in the coming days.
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RISK MANAGEMENT REPORT
Risk is the probability that an investment’s actual return will be
like Head Office Credit Review Committee (HOCRC),
partial or full of the original investment. As such the Prime Bank Limited (PBL) manages the risk through coordinated steps to
Asset Liability Committee (ALCO), Management Committee (MANCOM), Central Compliance
keep the loss at a tolerable limit which includes but not limited
Committee,
to control and monitoring.
Committee (MRS) and Management Risk Committee
The objective of risk management is to identify and analyze
(MRC) for managing and monitoring of risk throughout
risks and manage their consequences. Basel II/III Accord,
the organization; In addition to these Committees, a
the standards of Risk Management as guided by the Bank for International Settlements (BIS) and particularly Basel Committee on Banking Supervision (BCBS), has been applied by bank regulators across the world. The Central Bank of Bangladesh i.e. Bangladesh Bank also issued guidelines which forms the basis of risk management of all scheduled banks in Bangladesh. The guidelines require that the banks adopt
Risk Management Forum has also been introduced by Risk Management Division to capture and mitigate operational risk at different level of activities through combined effort. To assist this forum and formally capture various events, an online module named Risk Platform has also been developed.
enhanced policies and procedures of risk management. PBL’s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment, measurement procedures and continuous monitoring. PBL continues to focus on improving its risk management systems not only to ensure compliance with regulatory requirements but also to ensure better risk-adjusted return and optimal capital utilization keeping in mind of the business objectives. For sound risk management, PBL manages risk in strategic layer, managerial layer, and operational layer. The risk management process of the bank operates under following structure:
The Board approves overall risk management policies of the Bank in line with the regulatory guidelines; The Board also sets the Risk Appetite of the Bank at the beginning of the year. Executive Committee (EC) of the Board is responsible for all sort of decision making as set by the Board. All decisions taken by EC are ratified by the Board afterward; Audit Committee (AC) of the Board reviews the internal audit reports of the bank and operational risk and assesses whether internal control of the Bank is proper or not; Risk Management Committee (RMC) of the Board oversees the overall Risk Management of the Bank.
For managing risk, PBL established Credit Risk Management Division (CRM), Credit Administration Division (CAD), Recovery Division, Legal Division, Internal Control and Compliance Division (ICCD), Internal Audit & Inspection Division and Risk Management Division (RMD). For managing money laundering risk, Branch Anti Money Laundering Compliance Officer (BAMLCO) for every Branch under dedicated Chief Anti Money Laundering Compliance Officer (CAMLCO) has been placed;
Management
Reporting
System
Risk Management Committee of the Board: To oversee the risk management of the Bank, the Board has formed a Risk Management Committee as per the guidelines of Bangladesh Bank. The Committee supervises various risks arise from credit, foreign exchange, internal control and compliance, money laundering, information technology, operation, interest rate, liquidity etc. Presently five (05) members of the Board of Directors are representing in the Risk Management Committee. During 2015 Five (05) RMC meetings were held and thirty four (34) memos were placed before the RMC. The agendas discussed in the RMC meeting are as below: Sl 1 2
The committee also reviews risk management policies & guidelines, loan approval limit and submits to the Board for necessary revision each year;
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PBL also formed various risk management committees
different than expected which includes the possibility of losing
Number of Memo
Name of the Memo Compliance status of RMC meeting
5
Risk Management Paper / Risk Management Report
4
3
Stress Testing
4
4
Borrower Rating
4
5
Risk Management Framework
2
6
Comprehensive Risk Management Rating by Bangladesh Bank
2
7
Submission of Statement on ICAAP
2
8
Formation of Basel Unit
1
9
Submission of Green Banking Policy
1
10
Allocation of Internal limit for Off Balance Sheet exposure
1
11
Non complied observations of core risk questionnaire for calculate core risk rating
1
12
Business Continuity Recovery Site
2
13
Strengthening and updating Management System
14
Plan
and
Disaster the
Risk
Core Risk Inspection by Bangladesh Bank on ALM, ICC, ICT, AML
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Internal Capital Adequacy Assessment Process (ICAAP) is one
Risk Management Process Risk management is to balance the trade-off between risk and return and ensure optimum risk-adjusted return on capital. The risk management function of PBL strives to proactively
of the largest part of planning and controlling of risk. Monitoring: Risk monitoring is the most challenging task in the whole risk management cycle as monitoring helps the Bank to
anticipate vulnerabilities at the transaction as well as at the portfolio level, through quantitative and qualitative examination
identify earlier any probable risk that may take in place in many
of the embedded risks. Risk is managed through a framework
actually incurred lie within the prescribed limits, thus ensuring
of policies and principles approved by the Board of Directors
an institution’s capacity to bear those risks.
which ensures that the Bank operates within its risk appetite.
The above process of risk management is being undertaken by
The policies and procedures established for this purpose are continuously benchmarked with international best practices.
PBL which implies that if any risk(s) remains un-attended, that will be addressed through the repetition of the process which
Furthermore, the Internal Capital Adequacy Assessment
started with identification of those factors and the process
Process (ICAAP) of the Bank assesses all the significant risks
continues.
cases. Risk monitoring also helps to track whether the risks
other than the risks under Pillar-1 of Basel III and calculates the additional capital requirement.
Credit Risk Management Management of Credit Risk in PBL
Identification
Monitoring
Planning & Controlling
Measurement
Aggregation
Identification: A Bank’s risks have to be identified before they can be measured and managed. Typically PBL distinguishes Credit risk, Market risk, Liquidity risk, Operational risk, Islamic banking risk and Information & Communication Technology (ICT) risk. Besides these, concentration risk, strategic risk, residual risk, reputation risk, settlement risk, environmental & climate risk etc are covered under Internal Capital Adequacy Assessment Process (ICAAP). Measurement: The consistent assessment of the above mentioned types of risks is an essential prerequisite for successful risk management. For example, in order to assess credit risk associated with any corporate financing proposal, PBL carries out various risk assessment like financial spreadsheet analysis, credit risk grading and other risk like concentration related to the borrower and the relevant industry. Aggregation: PBL closely monitors aggregate risk in order to minimize its exposure to adverse financial developmentssuch as a credit crunch or even insolvency- arising from a counterparty or client. While aggregating risks, it is important to take into account correlation effects which cause a Bank’s overall risk differing from the sum of the individual risks. This applies to risks both within a risk category as well as across different risk categories. Planning & Controlling: PBL takes into consideration the business strategy while planning and setting control for mitigating risk. As risk management is the trade-off between risk and return, PBL always tries to manage the risk without hampering the business growth and stakeholders return.
While financial institutions have faced difficulties over the years for a multitude of reasons, the major cause of serious banking problems continues to be directly related to lax credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention to changes in economic or other circumstances that can lead to a deterioration in the credit standing of a Bank’s counterparties. Credit risk is most simply defined as the potential that a Bank’s borrower or counterparty will fail to meet its obligations in accordance with agreed terms. The goal of credit risk management is to maximize a Bank’s risk adjusted rate of return by maintaining credit risk exposure within acceptable parameters. The effective management of credit risk is a critical component of a comprehensive approach to risk management and essential to the long-term success of any banking organization. That is why a risk based asset review framework has also been put in place wherein the frequency of asset review would be higher for high exposure cases and/or poor credit rating. Sound practices that the Bank is trying to ensure are
Establishing an appropriate credit risk environment;
Operating under a sound credit granting process;
Maintaining an appropriate credit administration measurement and monitoring process;
Ensuring adequate controls over credit risk
The following sets of principles are used for the sustainable risk management culture: Balancing Risk and Return: Risk is taken considering the interest of Bank’s stakeholders, in line with Bank’s strategy and within its risk appetite. Responsibility: All employees ensure that risk-taking is disciplined and focused. Accountability: Risk is taken only by delegated authorities and where there is appropriate infrastructure and resources. PBL maintains a clear and transparent process for all risk-taking decisions. Anticipation: PBL seeks to anticipate future risks and ensures awareness of all known risks. Competitive advantage: The
bank
seeks
to
achieve
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competitive advantage through efficient and effective risk
Data collection check list and limit utilization format
management and control. The credit risk management policy
are prepared for regular assessment. Internal Audit
of PBL operates under the following broad principles:
& Inspection Division independently reviews the risk assessment at the time of conducting internal audit.
A. Establishing an appropriate Credit Risk environment The Board of Directors is responsible for approving and reviewing the credit risk strategies and policies of the bank periodically. The strategy reflects Bank’s tolerance for risk and the level of profitability the bank expects to achieve for
PBL also performs borrower rating to assess its borrowers for ensuring sound asset quality.
The bank has established overall credit limit at every level for groups of legally connected borrowers including individual borrowers and counterparties that aggregate in comparable
incurring various credit loss.
and meaningful manner for different types of exposures, both
Senior management is responsible for implementing the
in the banking & trading book and on & off balance sheet.
credit risk strategy approved by the Board and for developing
PBL always complies with the prevailing banking regulations
standard policies and procedures for identifying, measuring, monitoring and controlling any type of risk associated with
regarding Single Borrower Exposure Limit set by the Bangladesh Bank from time to time. Credit facilities to a single customer (Individual, Enterprise, Company, Corporate, Organization, and Group) are being treated as Large Loan if total limit amount exceeds 10 percent of the total capital of the Bank. As per BRPD Master Circular no. 05 dated April 09, 2005 on Single Borrower Exposure Limit, PBL has always maintained the percentage ceiling of Large Loan Portfolio exposure.
the strategy. Such policies and procedures address credit risk of the Bank’s activities and at both the individual credit and portfolio level. PBL ensures that the risks inherent in products and activities which are apparently new to the bank are subject to adequate procedures and controls before being introduced or undertaken, and approved in advance by the Board of Directors or its appropriate committee. In order to streamline risk control features in a more effective manner, PBL has put in place Standard Operating Procedure (SOP) in line with internationally accepted best practices. Moreover, the Bank has centralized its corporate credit to ensure better management of corporate borrowers. Besides, Credit Risk Management Division also set different limits in regards to sector concentration, area concentration, Off-Balance Sheet Exposure etc.
B. Operating under a sound credit granting process PBL follows sound, well defined credit-granting criteria. These criteria include a thorough assessment of the borrower or the counterparty, as well as the purpose and structure of the credit, and its source of repayment.
Credit facilities are allowed in a manner so that asset growth can be maintained ensuring optimum asset quality and without compromising the Bank’s standard of excellence;
The bank has a clearly-established process in place for approving new credits as well as the extension of existing credits. A thorough credit risk assessment is done before granting loans. The Credit Risk Assessment includes borrower risk analysis, industry risk analysis, historical financial analysis, projected financial performance, conduct of account, and security against the proposed loan. The assessment originates from relationship manager/ account officer and is reviewed by Head Office Credit Review Committee. The Credit analyst or executive duly delegated by proper authority approves the credit proposals. Executive Committee of the Board approves the proposals beyond the delegated authority limit of the Management. The Board of Directors also reviews the proposals approved by the Executive Committee. All credit extensions are made on an arm’s length basis. In particular, credits to related companies and individuals are monitored with particular care and other appropriate steps are taken to control or mitigate the risks of connected lending. Credit granting process at PBL operates within the defined risk limit so that the bank can achieve its growth target and superior return on capital.
PBL carefully avoids name lending. Credit facility is being granted on business consideration with absolute due diligence;
Risks inherent in a credit proposal are being identified and appropriate mitigating steps are taken accordingly;
C. Maintaining an appropriate credit administration, measurement and monitoring process
Collateral offered against a credit facility is properly valued and verified by the concerned Relationship
A system has been put in place by the bank for ongoing administration of various credit risk-bearing portfolios. Dedicated independent risk management units are developed for these purposes. Dedicated committees at management level have been set up to monitor risk. PBL segregated the total credit process into Relationship Management/Marketing, Credit Approval/Risk Management, Credit Administration to improve the knowledge levels and expertise in each department and to impose controls over the disbursement of authorized loan facilities and obtain an objective and independent judgment of credit proposals. Credit Administration Division completes security documentation after getting approval from Credit
Officer or Relationship Manager periodically. In addition, the same collateral is valued and verified by an enlisted surveyor of the bank which is now applicable for all customers irrespective of any amount;
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Risk grading of the accounts is being done as per the Bangladesh Bank’s guidelines. Any credit approval/ sanction are subject to the banking regulations in force or imposed by the regulatory body from time to time and subject to changes of the Bank’s policy.
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Risk Management Division and ensures adherence to
in force. Any deviations from the internal policy of the bank
approved terms and other requirements before limit creation
are well documented and subject to approval from Board of
and disbursement. To minimize credit losses, monitoring procedures and systems are placed which provides an early
Directors. The portfolio is well diversified with respect to sector and industry. Concentration of credit is carefully avoided to
indication of the deteriorating financial health of a borrower.
minimize risk.
Early Alert system is an example of such monitoring
PBL takes into consideration of potential future changes in
procedures. An Early Alert Account is one that has risks or
economic conditions while assessing individual credits and
potential weaknesses of a material nature requiring monitoring,
credit portfolios. An important element of sound credit risk
supervision, or close attention of the management. If
management involves discussing what could potentially go
such weaknesses are left uncorrected, they may result in deterioration of the repayment prospects for the asset or in
wrong with individual credits and within the various credit portfolios, and factoring this information into the analysis of the
the Bank’s credit position at some future date with a likelihood
adequacy of capital and provisions.
of being downgraded. Early identification, prompt reporting and proactive management of Early Alert Accounts are prime responsibilities of all Relationship Managers / Officers and the whole process is a continuous one. An Early Alert Report is completed by the Relationship Manager and sent to the approving authority in Credit Risk Management Division for any account that is showing signs of deterioration. The Risk Grade is also changed and referred to Credit Risk Management Division for assistance in recovery. The bank has also put a system in place for monitoring the condition of individual credits including determining the adequacy of provisions and reserves. The guidelines established by the Bangladesh Bank for Credit Information Bureau (CIB) reporting, provisioning and write-off of bad and doubtful debts and suspension of interest are followed meticulously in all cases. Provision is maintained for any shortfall in the Forced Sale Value (FSV) to cover total loan outstanding once an account is classified. PBL also has information systems and analytical techniques that enable the management to measure the credit risk inherent in all on- and off-balance sheet activities. PBL has taken initiative to make management information system more robust and sophisticated for monitoring the asset quality of the Bank. At present total limit loading and disbursement procedure of the Bank is fully centralized within Credit Administration Division. As a result, CAD now producing various MIS reports for monitoring purpose e.g overdue report, EOL report, disbursement report etc. All credit approvals are given complying with the requirements of Bank’s Memorandum and Articles of Association, the Bank Company Act-1991(amended up to 2013), as amended from time to time, the Bangladesh Bank’s circulars, guidelines and other applicable laws, rules and regulations, Bank’s Credit Risk Management Policy, Credit Operational Manual and all relevant circulars that are currently
Sales
Acquisition/ Credit-specific Customer
Collect and Review data
D. Ensuring adequate controls over credit risk PBL has established a system of independent, ongoing credit review and the results of such reviews are communicated directly to the Board of Directors and senior management. PBL ensures that the credit-granting function is being properly managed and that credit exposures are within levels, consistent with prudential standards and internal limits. The bank has established and enforced internal controls and other practices to ensure that exceptions to policies, procedures and limits are reported in a timely manner to the appropriate level of management. Prime Bank Limited has taken initiative to introduce Risk Based Pricing Model and the model has already been developed and currently under scrutiny of senior management and Risk Management Committee of the Board. After getting approval from the Board of Directors, the Risk Based Pricing Model will be in place for pricing corporate loans. Benefits of Risk Based Pricing are:
Enhance shareholders value by ensuring that credit risk associated with the transaction is appropriately measured and priced
Enable the Bank to know well ahead of time, what kind of price will satisfy its risk/return preferences
Enhance the achievement of credit portfolio goals and objectives.
PBL also has a system in place for managing problem credits and various other workout situations. All NPLs are assigned to Account Manager(s) within the Recovery Division, who is responsible for coordinating and administering the action plan / recovery of the account and serve as the primary customer contact after the account is downgraded to doubtful.
Risk Analysis
Credit Review
Collateral and Risk assessment
Approval
Processing
Documentation
Implementation
Credit approval process in PBL sub-divided into a large number of individual process steps
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Environmental Risk Management Environmental risk may be defined as an actual or potential threat of adverse effects on living organisms and environment by effluents, emissions, wastes, resource depletion, etc., arising out of an organization’s activities. These affects increase risks as they bring an element of uncertainty or possibility of loss in
liquidity position, anticipated future funding requirement, sources of fund, options for reducing funding needs, present and anticipated asset quality, present and future earning capacity, present and planned capital position. ALCO manages the liquidity risk by:
Environmental Risk Management is the process of identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable environmental risks. An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy (or combination
Setting tolerance limit for cumulative cash flow mismatches,
the context of a financing transaction.
Setting limit on loan to deposit ratio and
Setting limits on dependence on institutional deposits which are volatile in nature.
of strategies) in proper management of future events having
From the liquidity statement it can be seen that out of total deposit liabilities of Tk. 194,825 million, contractual maturity
impact on the environment.
of liability within 1 year is Tk. 130,576 million. In the liquidity
Environmental risk is one of the several risks that the Bank must take into account while assessing financing opportunities as it affects credit risk to a great extent. As environmental risk is a facilitating element of credit risk, the Bank has integrated Environmental Risk Management with Credit Risk Management in all aspects.
statement it is apparent that there is moderate negative gap till 1-3 months bucket due to high exposure in fixed term deposits. There exists moderate positive gap in other buckets which conforms that pressure from liquidity is minimal. In reality, above 85 percent of fixed term deposits are renewed on maturity. As such, the negative gap actually converts into positive gap.
As instructed by the Bangladesh Bank, PBL has incorporated Environmental Risk Management guidelines into Credit Risk Management Policy. PBL use Environmental Risk Rating (EnvRR) for both financing of new, green field projects as well as those pertaining to existing facilities.
If the EnvRR is high, then the proposal for financing will have to be approved by the Board or its Executive Committee.
If the EnvRR is low or moderate, then the financing decision can be undertaken on the basis of the usual credit risk management guidelines.
If the EnvRR is unclear, then it is required for the Bank to collect more information from the borrower so as to gain an understanding of the inherent risks and arrive at a high/moderate/low decision. If a risk factor is not applicable, it may be excluded from the total number of questions used in calculating.
Wherever the EnvRR is “High”, the credit risk management function will ensure that additional conditions / covenants are included.
Cost Of Deposit 8.41%
1st Quarter
8.17%
2nd Quarter
7.85%
3rd Quarter
Short Notice Deposit (SND), 1,401.33 Sundry Deposit, 1,242.42
7.69%
4th Quarter
Savings Deposit, 2,510.58
Current Deposit, 1,130.86 Others, 790.01
Deposit Mix (Figures in Crore)
Other Deposits under Scheme, 4,640.55
Liquidity Risk Management Liquidity risk is the failure to meet obligations leading to an inability to support normal business activity and to meet liquidity regulatory requirements. Liquidity risk can arise due to market liquidity or funding liquidity. Market liquidity risk is the risk of the inability to sell assets due to lack of liquidity in the market. Funding liquidity risk is the risk of the inability to meet liabilities when they fall due or can only be met at abnormal high price. To manage liquidity risk, PBL maintains diversified and stable funding base comprising of core retail, corporate and institutional deposits. The principle responsibility of the liquidity risk management of the bank rests with Treasury Division which maintains liquidity based on historical requirements, current
124
Fixed Deposit, 8,781.52
Market Risk Management Market risk is defined as the risk of losses in on and off-balance sheet positions arising from adverse movements in market prices which may impact the Bank’s earnings and capital. The purpose of market risk management framework is to minimize the risk of loss and maximize profit in trading portfolio. The risk may pertain to interest rate related instruments (interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Besides, the Bank is also exposed to liquidity or funding risk.
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Market Risk management is guided by well laid policies,
negative gap in the second quarter and positive gaps in the
guidelines, processes and systems for the identification,
other quarters. If interest rate increases by 1 percent, the Bank
measurement, monitoring and reporting of exposures against various risk limits. The Asset Liability Management Committee
will enjoy a positive earning of Tk. 18.26 million during 1 year period and vice versa. The impact is very insignificant compared
(ALCO) meets periodically and reviews the positions of trading
to total revenue of the Bank and also within the acceptable
groups, interest rate sensitivity, sets deposit and benchmark
limit as stipulated by the Bangladesh Bank. The statement also
lending rates and determines the asset liability management
shows that there will be 3.05% impact on quarterly net profit
strategy, as deemed fit, in light of the current and expected business environment. Treasury Front office has developed
which is also within the stipulated limit of 10 percent.
MAT policy to manage stressed liquidity. Treasury mid office
Moreover interest rate risk is also monitored through DEAR or
has been formed which is responsible to monitor, measure and
Daily Earnings at Risk. DEAR is defined as the estimated potential loss of a portfolio’s value over a one-day period as a result of
analyze the risks inherent in treasury operations of the Bank.
adverse movement in market conditions, such as changes in
Treasury back office before formation of Mid office used to monitor risk limits including position limits and stop loss limits
interest rates, foreign exchange rates or market volatility.
for the trading book and reviews periodically. For managing and monitoring foreign exchange risk PBL has started calculation of Value at Risk (VaR). Interest rate risk is monitored through the use of re-pricing gap analysis and duration analysis. Interest rate risk is further monitored through the ALCO. PBL uses various tools like structural liquidity profile, stress testing etc for measuring liquidity risk. PBL maintains diversified sources to facilitate the bank to meet funding requirements. Market Risk
Interest Rate Risk
Equity Risk
Foreign Exchange Risk
Commodity Risk
Interest Rate Risk Interest rate risk is the risk of losing profit by an interest-bearing asset, such as a loan or a treasury bond etc due to variability of interest rates. In general, as rates rise, the price of a fixed rate
Foreign Exchange Risk Management It is the risk that the bank may suffer losses as a result of adverse exchange rate movements during a period in which it has an open position in an individual foreign currency. In addition, the bank is also exposed to interest rate risk and settlement risk on account of its foreign exchange business. Foreign exchange risks are measured and monitored by Mid office under CRM Division. To evaluate the extent of foreign exchange risk, a Liquidity Gap Report is prepared for each currency. Gap or mismatch of maturities can arise due to a customer transaction resulting in a long or a short position for the bank. The Net Open position Limit (NOP) of the Bank is ± USD 56.66 million which is equivalent to ± BDT 4,447.80 million on overnight basis as fixed by Bangladesh Bank. The actual Net Open Position (NOP) of the Bank as on December 31, 2015 was Tk. 289.80 million which is equivalent to USD 3.69 million. The overall exposure does not exceed the stipulated limit.
Value at Risk (VaR) (at 99% confidence level) Amount in USD
bond will fall, and vice versa. 7,341.98
PBL monitors interest rate risk through duration gap analysis, sensitivity analysis, and Daily Earning At Risk (DEAR) analysis. The short term impact of changes in interest rates is on the bank’s Net Interest Income (NII). In a longer term, changes in interest rates impact the cash flows on the assets, liabilities and off-balance sheet items, which raise the risk of losing the net worth arising out of all re-pricing mismatches and other interest rate sensitive position. Maturity grouping of rate sensitive assets and liabilities of the Bank (see table on Interest Rate Risk Analysis) shows moderate
4,817.55
4,078.79
4,358.82
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Furthermore Foreign Exchange Risk is also measured and monitored through Value at Risk (VaR) under variance – covariance method. The Value-at-Risk is the maximum loss that the Bank is likely to face within a given time period with (usually) a 95% (high) & 99% (really high) probability.
Equity Risk Management
Duration Gap 1.18
1.1 1.09
1.08
March-15
June-15
September-15
December-15
Equity risk is defined as losses due to changes in market price of equity held by the bank. To measure and identify the risk, mark to market valuations of the share investment portfolios are done. Mark to market valuation is done against a predetermined limit. Equity Risk of the Bank is also monitored through analysis of own investment on shares by subsidiaries, margin loan against investment in share by subsidiaries and loan statement against shares.
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Furthermore, PBL measures equity risk through stress
Regular review of system and network by Management
testing by devaluing equity portfolio held by the bank 10%,
Committee (MANCOM) and Management Reporting
20% and 40% under minor, moderate and major shock level respectively. During 2015, Capital to Risk weighted Asset Ratio
System Committee (MRSC)
(CRAR) was greater than 10% under all equity shock levels.
Internal Audit & inspection Division of the Bank undertake Risk Based Internal Audit, Comprehensive audit, special audit and IT audit of branches and departments at Head Office for review of the operation
Share, 33.05
and compliance of statutory requirement respectively Loan to own Brokerage, 380
Loan to other Brokerage, 70.72
and submit the major audit findings to Audit Committee of the Board. Upon getting guidelines
Capital Market Exposure
Total Capital Market Exposure, 856.02
from the Committee Internal Control & Compliance communicate with related branches for immediate compliance on mentioned issues and thereafter submit the updated compliance status to the Audit
Loan to Stock Dealer, 1 Equity i Investmentt in Merchant Banks, 371.25
Operational Risk Management Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Operational risks vary in their components. Some are very high occurrence with low impact and some are low occurrence with high impact risks. Third consultative paper of Basel-II recommended following event based classification of operational risks:
Internal fraud;
External fraud;
Employment practices and workplace safety;
Client, products and business practices;
Damage to physical assets;
Business disruption and system failure;
Execution, delivery and process management.
In PBL, operational risks are identified and measured in the following manner:
Risks are identified with reference to the relevant policy manuals, processes, procedures and practices;
Controls are evaluated as per Departmental Control Function Check List (DCFCL);
Incident reporting and analysis of causes and actions taken on losses from both internal & external fraud and control lapses;
Review of safety and control measures of premises.
Risk control and measurement in PBL are as under:
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Manuals and Standard Operating Procedures are in place and implementation of those are regularly monitored;
As per KPMG’s guideline and based on feedback of respective branches and divisions a policy on Access Control Management of the Bank’s Core Banking Software T24 has been developed & approved by the top management of the Bank;
Committee of the Board.
Self-Assessment of Anti-Fraud Internal Control are being carried out with due diligence under the purview of best practices in the banking industry.
Risk Based Internal Audit (RBIA) is being carried out by Internal Audit & Inspection Division.
Independent Anti Money Laundering (AML) Inspection is being conducted at branch level by Internal Audit & Inspection Division.
Segregation of duties procedure are in place.
IT Audit is being carried out on regular basis
Establishing a Data Center for backup of data and information
Regular testing of system’s back-up procedure and contingency plan
and
multi-tier
approval
Prevention of Money Laundering Money Laundering means properties acquired or earned directly or indirectly through illegal means or illegal transfer or use of legally earned money, conversion and concealment of ownership and source of fund. Bangladesh Bank through BRPD Circular No. 17 dated October 07, 2003 advised the scheduled commercial banks operating in the country to put in place effective risk management system which includes Money Laundering Risk Management among others. PBL has updated Anti Money Laundering Guidelines in 2012, which includes Senior Management commitment to the antimoney laundering program. The Management has developed such a culture for the Bank so that all the employees strictly adhere to each and every provision of Money Laundering Prevention Act 2012 and Anti-Terrorism Act-2009 with amendment of 2012. Later Circular was issued for compliance of the Anti-Terrorist (Amended) Act-2013. All employees of the Bank, irrespective of the position they hold, are accountable to the Top Management and regulatory bodies for their activities which might directly or indirectly relate to money laundering. Details of Anti Money Laundering activities are included in the ‘Corporate Governance’ chapter of this Annual Report. For mitigating the risks, the management of the Bank has formed Anti Money Laundering Department. The Bank has also nominated CAMLCO, Deputy CAMLCO centrally and BAMLCO at branches for monitoring compliance issues related to Anti
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Money Laundering. The regulatory requirements are being
possible forgone profits to PLS deposit holders. In order
complied with the guidelines.
to reduce Shari’ah non-compliance risk, the Muraqibs
The CAMLCO of the Bank has been participating in the CAMLCO Conference organized by Bangladesh Bank every year. The Central Bank has been arranging district level AML related training for employees of all schedule Banks operating in the district(s).
regularly conducted Shari’ah audit. Fiduciary risk is controlled through Bank’s risk management process.
Information & Communication Technology Risk Management We are living in an era of information and communication technology and the banks have become more technology
Internal Control and Compliance
driven these days. Use of computer, internet has become a
Internal Control and Compliance is a management process
common practice in the banking industry. There are certain
designed to achieve effectiveness and efficiency of operations,
risks involved in the use of information and communication
reliable financial reporting and compliance with laws and
technology. This risk may arise from malfunction of system,
regulations.
failure of network, lack of knowledge about the use of technology, virus attack, hacking etc.
Internal Audit & Inspection Division conducts internal audit in all the Branches of our Bank to identify lapses/irregularities related to account opening, preparation and update of KYC and other related issues, preparation of accurate Transaction Profile (TP) and to build up the knowledge about AML issues/matters and forwards those to Internal Control & Compliance for follow-up. Pillar 1 and Pillar 2 of Basel Accord also focuses on operational risk and supervisory review respectively attaching considerable importance to internal control & compliance and on supervision & monitoring. As prescribed in the Bangladesh Bank core risk guideline on Internal Control & Compliance, Management Committee (MANCOM) of PBL reviews the overall effectiveness of internal control system. The chapter on ‘Corporate Governance’ of this Annual Report contains detail discussion on internal control & compliance measures of the Bank.
PBL has a robust network infrastructure with scalable, secure, redundant and load balanced architecture to support its customers regarding the on-line transactions with highest level of security. PBL uses world renowned Active Devices in its network infrastructure. PBL has adopted world class Core Banking Software “TEMENOS T24” and also implemented Disaster Recovery (DR) site which is located in Uttara to make sure that the bank operates smoothly under unavoidable circumstances. PBL has an IT audit team also, formed as per the Central Bank’s guideline. The team conducts IT Audit in each branch on a periodic basis and provides suggestions to higher management. IT Division is also managing IT related training programs to make sure that employees are aware of IT risk related issues. The chapter on ‘Corporate Governance’ in this Annual Report contains details of IT audit.
Islamic Banking Risk Management Islamic banking is becoming a popular mode of banking because of its Shari’ah complied principles. In many countries, there are separate Islamic banking banks and also banks which are operating under both conventional and Islamic mode of banking. In addition to the investment risk, market risk, liquidity risk and operational risk there are other risks in Islamic banking operation.
Shari’ah Non-Compliance Risk arises from the failure
Information Security Management Information security (ISec) describes activities related to the protection of information and information infrastructure assets against the risks of loss, misuse, disclosure or damage whereas Information security management (ISM) describes controls that an organization needs to implement to ensure that it is sensibly managing these risks.
of the banks to comply with Shari’ah rules and regulations. As more and more banks are operating under both conventional and Islamic banking, it is becoming increasingly important to comply with Shari’ah rules and regulations for the sustainability
Information Security Department conducting Information Security Risk Assessment of various Applications, Systems & Business Processes on regular basis with consideration of latest vulnerabilities, threats and information security breaches. In consequence Information Security Department have conducted
of Islamic banking. Based on historical reviews, the potential areas of Shari’ah non-compliance is assessing potential profits that cannot be recognized as eligible profits under Shari’ah Principle.
assessment on Internet Banking System-Altitude, Debit & Credit Card Production systems and its operational activities, Storage Area Network (SAN), User Role review at Core Banking SystemTemenos T24 & Others during the year 2015.
Fiduciary risk is the risk that arises from Bank’s failure to perform in accordance with explicit and implicit standards applicable to their fiduciary responsibilities. As a result of losses in investments, banks may become insolvent and therefore unable to (i) meet the demands of current account holders for repayment of their funds and (ii) safeguard the interests of their PLS (Profit Loss Sharing) deposit holders. Banks may fail to act with due care when managing investments resulting in the risk of
Information Security Department directly reports to Chief Risk Officer. Their findings are also being discussed in IT Steering Committee and Management Risk Committee.
Internal Capital Adequacy Assessment Process (ICAAP) The Bank conducts ICAAP process every year as stipulated by the Bangladesh Bank. ICAAP is aimed at ensuring that the bank maintains an amount of capital commensurate to its risk
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profile and improves upon its risk management systems and
Basel-III, in respect of capital measurement and capital
framework. It involves realistic assessment of the level of risks
standards, aligns capital of a bank more closely with the
inherent in the business operations of the bank and setting aside adequate capital to cover all such risks like Residual Risk,
underlying risk. With a view to smooth implementation of Basel III Accord, The management of PBL decided to conduct Credit
Concentration Risk, Liquidity Risk, Reputation Risk, Strategic
Rating for Corporate Borrowers through External Credit Rating
Risk, Settlement Risk etc. The assessment is done considering
Assessment Institutions (ECAIs).
the operational presence, activities, and processes etc.
Capital Management is one of the key strategic issues these
Monitoring all the material risks also forms part of ICAAP. In short, ICAAP is integrated into the management and decision
days in the banking business. Borrower rating not only plays
making process and is reflected in the processes and business operations of the Bank.
an important role in improving capital adequacy of the bank through capital relief but also helps the bank to understand the risk associated with the borrowers. In this regard, RMD calculates capital relief on the basis of rated customers
Risk Management Paper
quarterly.
As per Bangladesh Bank (BB) requirement, Risk Management Division (RMD) prepares Risk Management Report which is presented in the meeting of Management Risk Committee (MRC) on monthly basis. At the end of each quarter, Risk Management Report along with the minutes is submitted to Bangladesh Bank by Risk Management Division. Risk Management Report is a comprehensive document related to risk issues which is being placed in the Management Risk Committee’s monthly meeting. It also allows identification and mitigation of risk under necessary guidance of the Senior Management of the Bank.
As a result of vigorous effort and continuous persuasion, out of total 741 nos. of eligible corporate borrowers of PBL, rating of 355 nos. of borrowers (47.91 percent of eligible corporate borrowers) has been completed till December 31, 2015. Moreover, rating of 91 no. of SME borrowers has been completed till December 31, 2015. The rating distribution of the 446 Corporate & SME borrowers of PBL is as follows:
Bangladesh Bank Rating Grade
No. of Rated
Percentage of
Borrowers
Total Rated
of PBL
Borrowers
Corporate
SME
Corporate
SME
60
1
16.90%
1.10%
In addition to the prescribed format of Bangladesh Bank, PBL has incorporated various analyses on Credit Risk, Market Risk, Liquidity Risk, Operational Risk as well as Strategic Risk.
BB Grade 1
Risk Management Paper is also being submitted to the Risk Management Committee of the Board and the decisions are being communicated with relevant divisions of the bank for necessary initiatives.
** Risk weight for unrated exposure is 125 percent.
Borrowers’ Rating
Stress Testing
BB Grade BB Grade-5, 0.90% BB Grade-1 , 13.68%
BB Grade-4, % 15.02%
Borrowers Rating Distribution
BB Grade-2, 31.39%
BB Grade 2
135
5
38.03%
5.49%
BB Grade 3
134
40
37.75%
43.96%
BB Grade 4
23
44
6.48%
48.35%
3
1
0.90%
1.10%
355
91
100%
100%
BB Grade 5 Total
A stress test, in financial terminology, is an analysis or simulation designed to test the ability of a given financial institution to deal during forecasted economic crisis. Instead of doing financial projection on a “best estimate” basis, a bank or its regulators do stress testing where it looks at how robust institutions is in certain crashes, a kind of “What-If” scenario analysis. This type of analysis has become increasingly widespread, and has been taken up by various governmental bodies as a regulatory requirement on certain financial institutions to ensure adequate capital allocation to cover potential losses incurred during extreme, but plausible, events.
BB Grade-3,, 39.01%
As prescribed by Bangladesh Bank (BB), all banks in Bangladesh assessing credit risk under the Standardized Approach of the Risk Based Capital Adequacy framework (Basel III), where External Credit Assessment Institutions (ECAIs) duly recognized by BB performs borrower rating against which risk weight mapped with the credit rating category and risk weighted assets (RWA) is determined for calculating the capital requirement of banks against credit risk.
128
Stress testing framework as provided by Bangladesh Bank assesses the impact on Capital to Risk Weighted Asset Ratio (CRAR) due to minor, moderate and major level of shock in terms of credit risk, exchange rate risk, liquidity risk, equity price risk and interest rate risk. Stress testing for credit risk assesses the impact of increase in the level of Non-Performing Loans (NPLs) of the banks.
Performing loan directly downgraded to B/L: RMG It is a measure of the concentration risk where the bank has the highest investment. It assumes that 3 percent, 9 percent and
PRIME BANK A N N UA L R E P O RT 2 0 1 5
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15 percent of the performing loan will be directly downgraded
percent and 6.34 percent in minor, moderate and major levels
to B/L category in minor, moderate and major levels of shock
of shock respectively when considering individual shock. PBL is
respectively. CRAR of PBL will be 12.81 percent, 12.78 percent and 12.74 percent in minor, moderate and major levels of shock
reducing the exposure of large loan borrower and focusing on diversification of credit portfolio. Moreover, the Bank is trying to
respectively when considering individual shock.
secure more collateral coverage to avert any negative impact on capital due to default of top large loan borrowers. However, the bank is continuously monitoring the performance of large
Sector
loan borrowers.
RMG 12.91
13.26
13.24 13.22
12.87 12.83
12.81
12.39
12.78 12.74
Negative shift in NPLs categories It represents the shift of a loan from one NPL category to
12.35 12.31
Minor
Moderate
NPLs categories in minor, moderate and major levels of shock respectively. CRAR of PBL will be 12.65 percent, 9.50 percent and 9.21 percent in minor, moderate and major levels of shock respectively when considering individual shock.
-1 5
15
De c
Se
M
Ju n
p-
-1 5
ar -1 5
the next NPL category. It is based on the assumption of 5 percent, 10 percent and 15 percent downward shift in the
Major
Negative Shift in NPL Categories 11.31 9.73
15
9.5 9.21
c-
p-
15 n-
Minor
10.79
De
10.08
Ju
ar M
12.65
12.74
12.01
-1 5
10.83 10.32
15
12.57
It is a measure of the concentration risk where the bank has the second highest investment. It assumes that 3 percent, 9 percent and 15 percent of the performing loan will be directly downgraded to B/L category in minor, moderate and major levels of shock respectively. CRAR of PBL will be 12.82 percent, 12.79 percent and 12.77 percent in minor, moderate and major levels of shock respectively when considering individual shock.
Se
Performing loan directly downgraded to B/L: Textile
Moderate
Major
Sector
Textile
13.27
Decrease in the Forced Sale Value (FSV) of the collateral
13.26 13.26
12.88 12.76
12.82 12.64
12.79 12.77
5 De
c1
p15 Se
Ju
M ar
-1
n15
5
12.42 12.43 12.44
Minor
Moderate
Major
It represents the Bank’s condition when FSV of collateral decreases sharply. It is based on the assumption that FSV of collateral will fall by 10 percent, 20 percent and 40 percent in minor, moderate and major levels of shock respectively. CRAR of PBL will be 12.70 percent, 12.57 percent and 12.30 percent in minor, moderate and major levels of shock respectively when considering individual shock. Decrease in FSV of Collateral 13.04
Increase in NPLs due to default of top large loan borrowers
12.8
12.7
12.7
It represents the scenario of the bank when top large borrowers default. It is assumed that top 3, 7 and 10 borrowers of the bank will default in minor, moderate and major levels of shock respectively. CRAR of PBL will be 9.46 percent, 7.02
12.57
12.47 12.33
12.26 12.01
12.3
12.11 11.8
8.99 7.3 6.57
6.16
7.02
Moderate
c15 De
15 p-
15 n-
Minor 6.77
Se
9.46
8.72
8.43
M
ar
11.1
10.75
Ju
-1 5
Increase in NPL due to default of Top large loan borrowers
Major
6.34
Minor
Moderate
Major
c15 De
p15 Se
15 nJu
M ar
-1 5
Increase in NPLs It represents the condition of the bank when Non-Performing Loans increases significantly. It is based on the assumption that 3 percent, 9 percent and 15 percent of performing loans will be downgraded to Bad & Loss category having 100%
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provisioning requirement in minor, moderate and major
and major levels of shock respectively when considering
levels of shock respectively. Capital Adequacy Ratio (CAR) of
individual shock.
PBL will be 12.14 percent, 10.42 percent and 7.75 percent in minor, moderate and major levels of shock respectively when Equity shock
considering individual shock.
It represents the Bank’s condition when market value of share falls sharply. It is based on the assumption that share
Increase in NPLs 12.62
12.47
11.92
11.52
10.91 9.57
price will change by 10 percent, 20 percent and 40 percent in minor, moderate and major levels of shock respectively.
12.14
10.98 9.42
10.42
Capital Adequacy Ratio (CAR) of PBL will be 12.61 percent, 12.40
8.42 7.75
percent and 11.96 percent in minor, moderate and major levels of shock respectively when considering individual shock. Equity Shock
-1 5
15
11.85 11.29
De c
Interest rate shock 12.43 11.58
12.09 10.74
11.35
10.61
Moderate
10.62
10.08
6.11
c15
13.26 13.26 13.25 12.93 12.93 12.92
12.83 12.82 12.81
Major
c15 De
p15 Se
n15 Ju
0.48
15
5 p1
nJu
Se Moderate
Major
For absorbing different shocks under Stress Testing, PBL took the following measures:
Exposure on large loan customers are being monitored closely
Emphasize on enhancing collateral coverage against large loan exposure;
Encouraging focus on SME lending;
Regular loans are being monitored closely in order to avoid classification;
Persuading unrated Corporate and SME customers to bring them under the umbrella of ECAI’s credit rating.
12.4 12.39 12.39
-1 5
0.94
15
15 ar M
Minor
Foreign Exchange Risk
M ar
4.90
Major
It represents the condition of the bank when exchange rate changes significantly. It is based on the assumption that exchange rate will change by 5 percent, 10 percent and 15 percent in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.83 percent, 12.82 percent and 12.81 percent in minor, moderate
130
10.85
1.69
De
15
Ju
Se
p-
n1
5
5 -1 ar M
2.75
Foreign exchange shock
Moderate
De c
Combined Shock
5.71
Moderate
Major
When all the shocks are considered together, Capital Adequacy Ratio (CAR) of PBL will be 10.85 percent, 4.90 percent and 0.48 percent in minor, moderate and major levels of shock respectively. So, the Bank can absorb minor level of shock only when all the shocks are considered together. However, for absorbing other levels of shock which is very unlikely in the industry, the bank may require additional capital and reserve.
6.86
Minor
11.96
-1 5
15
Minor
10.82
Minor
12.61 12.4
De c-
11.69 10.98 10.26
p-
15 nJu
M
It represents the condition of the bank when interest rate changes significantly. It is based on the assumption that interest rate will change by 1 percent, 2 percent and 3 percent in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.09 percent, 11.35 percent and 10.61 percent in minor, moderate and major levels of shock respectively when considering individual shock.
10.9
11.79
Major
Interest rate shock
12.26 11.58
12.54
10.15
Se
Moderate
12.91 11.48
ar -1 5
Minor
Se
M
Ju n
p-
-1 5
ar -1 5
12.58 12.21
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Interest Rate Risk Analysis for 1 percent change in the market rate of interest as on 31.12.2015 1- 90 days
Over 3 month to up to 6 month
Over 6 month to up to 9 month
Over 9 month to up to 1 year
Rate Sensitive Assets
86,758,083,871.55
22,320,159,542.34
12,689,095,801.97
6,946,761,875.59
Rate Sensitive Liabilities
84,017,477,048.35
25,020,440,563.18
10,483,078,627.90
6,811,568,028.52
Gap
2,740,606,823.20
(2,700,281,020.84)
2,206,017,174.07
135,193,847.07
Cumulative GAP
2,740,606,823.20
40,325,802.36
2,246,342,976.44
2,381,536,823.51
1%
1%
1%
1%
6,757,660.66
99,433.49
5,538,927.89
5,872,282.58
Accumulated earning impact to date
6,757,660.66
6,857,094.15
12,396,022.03
18,268,304.61
Earning Impact / Avg. Quarterly Net Profit
1.13%
1.15%
2.07%
3.05%
Particular
Adjusted Interest rate Change Quarterly earnings impact (Cum. Gap*IRC)
Bank’s Exposure to Foreign Exchange Risk as on 31.12.2015 Amount in BDT Short Term Foreign Currency Holdings Currency
Long Term Foreign Currency Holdings
Assets In FCY
Liabilities In FCY
Net Short Term Position
Assets In FCY
Liabilities In FCY
Long Term Net Position
Overall Net Position
1
2
3=1-2
4
5
6=4-5
7=3+6
USD
12,587,118,199
12,421,676,513
165,441,686
-
165,441,686
EUR
181,598,628
170,302,331
11,296,297
-
11,296,297
GBP
60,044,552
19,507,182
40,537,370
-
40,537,370
JPY
7,531,701
-
7,531,701
-
7,531,701
CHF
8,410,862
-
8,410,862
-
8,410,862
CAD
3,923,583
-
3,923,583
-
3,923,583
AUD
3,858,040
-
3,858,040
-
3,858,040
SGD
59,973,958
40,828,907
-
40,828,907
SAR
5,082,055
-
5,082,055
-
5,082,055
SEK
2,862,492
-
2,862,492
Total
19,145,051
2,920,404,070 12,630,631,077
289,772,993
-
2,862,492 -
-
-
289,772,993
131
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
MARKET DISCIPLINE DISCLOSURE ON RISK BASED CAPITAL (BASEL-III) 1. Scope of Application Qualitative
a)
disclosure
The name of the top corporate entity in the group to which Prime Bank Limited this guidelines applies.
b)
An outline of differences in Prime Bank Limited has 5 (Five) subsidiaries viz. (i) Prime Bank Investment the basis of consolidation for limited, (ii) Prime Bank Securities Limited, (iii) Prime Exchange Co. (Pte.) accounting and regulatory purposes, with a brief description of the entities within the group (a) that are fully consolidated; (b) that are given a deduction treatment; and (c) that are neither consolidated nor deducted (e.g. where the investment is risk-weighted).
Limited, Singapore, (iv) PBL Exchange (UK) Limited and (v) PBL Finance (Hong Kong) Limited.
A brief description of the Bank and its subsidiaries are given below: Prime Bank Limited: The Prime Bank Limited (“the Bank�) was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch from April 17, 1995 under the license issued by Bangladesh Bank. Presently the Bank has 145 (One Hundred and Forty Five) branches including 18 (Eighteen) SME Centers/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong Port, Chittagong. Out of the above 145 branches, 05 (five) branches are designated as Islamic Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5 (Five) subsidiary Companies (3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering in 1999 and its shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share. The principal activities of the Bank are to provide all kinds of commercial banking services to its customers through its branches.
Subsidiaries of PBL: i.
Prime Bank Investment Limited:
Prime Bank Investment Limited (PBIL) is a subsidiary company of Prime Bank Limited incorporated as a public limited company on April 27, 2010 with the registrar of Joint Stock Companies, vide certificate of incorporation no.C84266/2 dated 28 April 2010 which has commenced its business on the same date. The main objectives of the company are to carry out the business of fullfledged merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services etc.
ii.
Prime Bank Securities Limited:
Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies Act 1994. The main objectives of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company. The company commenced its operation from May 2011.
132
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iii.
Prime Exchange Co. (Pte.) Limited, Singapore:
Prime Exchange Co. (Pte.) Ltd., Singapore a fully owned subsidiary company of Prime Bank Limited was incorporated in Singapore on January 06, 2006 and commenced its remittance business with one (1) Branch from July 08, 2006. In 2011 the Company has also opened another Branch located at Jurong East Branch, Block: 134 #01-305 Jurong Gateway Road, Singapore 600134. The principal activities of the company are to carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried on or undertaken by remittance and exchange house.
iv.
PBL Exchange (UK) Limited:
PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and Wales under registration no. 7081093 dated 19 November 2009. The company is a wholly owned subsidiary of Prime Bank Limited. The company commenced its operation on 02 August 2010 with three Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF.
v.
PBL Finance (Hong Kong) Limited:
PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong) Limited was incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business Registration no. 58197431 both dated April 7, 2011). PBL Finance (Hong Kong) Limited obtained Money Lending Licenses # 307/2011 issued by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011 with one branch located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong. c)
d) Quantitative disclosure
Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group. The aggregate amount of capital deficiencies in all subsidiaries not included in the consolidation that are deducted and the name(s) of
Not applicable
Not applicable
such subsidiaries.
2. Capital Structure Qualitative disclosure
a) Summary information on the terms and conditions of the main features of all capital instruments, especially in the case of capital instruments eligible for inclusion in CET1, Additional Tier 1 or Tier 2.
As per Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for Banks in line with Basel III) introduced by Bangladesh Bank, ‘Common Equity Tier-1 (CET 1)’ Capital of PBL consists of (i) Paid-up Capital, (ii) Non-repayable Share Premium Account, (iii) Statutory Reserve, (iv) Retained Earnings and (v) Minority Interest in Subsidiaries. Prime Bank does not have ‘Additional Tier 1 (AT 1)’ Capital since it did not issue any instrument that meets the qualifying criteria for Additional Tier 1 Capital. Subsidiaries did not issue AT 1 capital to third parties as well. Tier-2 Capital consists of (i) General Provision (eligible for inclusion in Tier 2 will be limited to a maximum 1.25 percentage points of credit risk weighted assets calculated under the Standardized Approach) (ii) Subordinated Debt/Instruments issued by the Banks that meet the qualifying criteria for Tier 2 Capital. (iii) Revaluation Reserves (50% of Fixed Assets & Govt. Securities and 10% of equity instruments) subject to regulatory adjustment/ deduction i.e. 20% for 2015.
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b) The amount of Tier-1 capital with separate disclosure of:
Solo
Consolidated Taka in Crore
Common Equity Tier 1 (CET 1) Capital: Fully Paid up capital
1,029.35
Non repayable share premium account Statutory reserve
224.12
224.12
873.50
873.50
General reserve
Quantitative
-
2.80
183.59
185.47
Minority interest in subsidiaries
-
-
Dividend equalization account
-
-
2,310.56
2,315.25
Retained earnings
disclosure
1,029.35
Sub-Total Additional Tier 1 Capital Total Tier 1 Capital Tier 2 Capital Total amount of Tier 1 and Tier 2 capital c) Regulatory Adjustments/Deductions from capital d) Total eligible capital
-
-
2,310.56
2,315.25
650.07
649.93
2960.63
2965.18
(32.35)
(35.00)
2,928.28
2,930.18
3. Capital Adequacy: Qualitative disclosure
a) A summary discussion of the bank’s approach to assessing the adequacy of its capital to support current and future activities.
The Bank has adopted Standardized Approach (SA) for computation of capital charge for credit risk and market risk, and Basic Indicator Approach (BIA) for operational risk. Assessment of capital adequacy is carried out in conjunction with the capital adequacy reporting to the Bangladesh Bank. The Bank has maintained Capital to Risk Weighted Asset Ratio (CRAR) at 12.74% & 12.69% for stand-alone and for consolidated group respectively. As per guideline, Bank is required to maintain a Capital Conservation Buffer (CCB) of 2.50%, comprised of Common Equity Tier-1 (CET-1) Capital, above the regulatory Minimum Capital Requirement (MCR) of 10%. The following table shows shat Bank has adequate Tier-1 & Tier-2 Capital to maintain all the ratios at the required level. It has covered both MCR as well as CCB with its eligible capital after considering all regulatory adjustments. The Bank’s policy is to manage and maintain its capital with the objective of maintaining strong capital ratio and high rating. The Bank maintains capital levels that are sufficient to absorb all material risks. The Bank also ensures that the capital levels comply with regulatory requirements and satisfy the external rating agencies and other stakeholders including depositors. The main objective of the capital management process in the Bank is to ensure that Bank has adequate capital to meet up its all sorts of obligations any time.
Solo Particulars b) Capital requirement for Credit Risk c) Capital requirement for Market Risk d) Capital requirement for Operational Risk Total Risk Weighted Assets (RWA)
Quantitative disclosure
Total Regulatory Capital (Tier 1 & Tier 2) Capital To Risk Weighted Asset Ratio (CRAR) Common Equity Tier 1 (CET 1) Capital to RWA Ratio e) Tier 1 Capital to RWA Ratio Tier 2 Capital to RWA Ratio f)
134
Minimum Capital Requirement (MCR) Capital Conservation Buffer (2.50% * RWA)
Consolidated Taka in Crore 20,225.61
20,133.50
581.83
708.73
2,176.85
2,242.25
22,984.29
23,084.49
2,928.28
2,930.18
12.74%
12.69%
10.00%
9.96%
10.00%
9.96%
2.74%
2.73%
2,298.43 574.61
2,308.45 577.11
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Minimum Tier 1 Capital Ratio: 6.00%, Minimum Total Capital Ratio: 10.00%,
Capital Conservation Buffer: 2.50%, Minimum Total Capital plus Capital Conservation Buffer: 12.50%.
4. Credit Risk: Qualitative disclosure
a) The general qualitative disclosure requirement with respect to credit risk, including: i) Definitions of past due and With a view to strengthening credit discipline and bring classification and impaired (for accounting provisioning regulation in line with international standard, a phase-wise program for classification and provisioning was undertaken by the Bank purposes); as per Bangladesh Bank circulars issued from time to time. In this regard, all the loans and advances/investments are grouped into four categories for the purpose of classification, namely (i) Continuous Loan, (ii) Demand Loan, (iii) Fixed Term Loan and (iv) Short-term Agricultural and Micro Credit. They are classified as follow: Continuous & Demand Loan are classified as: Sub-standard- if it is past due/overdue for 03(three) months or beyond but less than 06 (six) months; Doubtful- if it is past due/overdue for 06 (six) months or beyond but less than 09 (nine) months; Bad/Loss- if it is past due/overdue for 09 (nine) months or beyond. In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting up to Taka 1 million is not repaid within the due date, the amount of unpaid installment(s) are treated as “past due or overdue installment”. Such types of Fixed Term Loans are classified as under: Sub-standard- if the amount of past due installment is equal to or more than the amount of installment(s) due within 06 (six) months, the entire loans are classified as “Sub-standard”. Doubtful- if the amount of past due installment is equal to or more than the amount of installment(s) due within 09 (nine) months, the entire loans are classified as “Doubtful. Bad/Loss- if the amount of past due installment is equal to or more than the amount of installment(s) due within 12(twelve) months, the entire loans are classified as “Bad/Loss”. In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting more than Taka 1 million is not repaid within the due date, the amount of unpaid installment(s) are treated as “past due or overdue installment”. Such types of Fixed Term Loans are classified as under: Sub-standard- if the amount of past due installment is equal to or more than the amount of installment(s) due within 03 (three) months, the entire loans are classified as “Sub-standard”. Doubtful- if the amount of past due installment is equal to or more than the amount of installment(s) due within 06 (six) months, the entire loans are classified as “Doubtful”. Bad/Loss- if the amount of past due installment is equal to or more than the amount of installment(s) due within 09 (nine) months, the entire loans are classified as “Bad/Loss”. Short-term Agricultural and Micro Credit will be considered irregular if it is not repaid within the due date as stipulated in the loans agreement and will be classified as under: Sub-standard- if the irregular status continues after a period of 12 (twelve) months, the credits are classified as “Sub-standard”. Doubtful- if the irregular status continue after a period of 36 (thirty six) months, the credits are classified as “Doubtful”. Bad/Loss- if the irregular status continue after a period of 60 (sixty) months, the credits are classified as “Bad/Loss”. A Continuous loan, Demand loan or a Term Loan which remained overdue for a period of 02 (two) months or more, is treated as “Special Mention Account (SMA)”.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
ii)
Description of approaches The Bank is required to maintain the following general and specific provision followed for specific and general in respect of classified and unclassified loans and advances / investments allowances and statistical on the basis of Bangladesh Bank guidelines issued from time to time: methods;
Particulars Rate General provision on unclassified Small and Medium Enterprise 0.25% (SME) financing. General provision on unclassified loans and advances/investments other than Consumer Financing, Loans to Brokerage House, 1% Merchant Banks, Stock Dealers etc., SMA as well as SME Financing). General provision on interest receivable on loans / investments. 1% General provision on off-balance sheet exposures (Provision has been made on the total exposure and amount of cash margin & value of eligible collateral were not deducted while computing 1% off-balance sheet exposure). General provision on unclassified loans and advances/ investments for housing finance, loans for professionals to set- 2% up business under consumer financing scheme. General provision on the unclassified loans to Brokerage House, Merchant Banks, Stock Dealers, etc. General provision on unclassified amount for Consumer Financing.
2%
5% General provision on outstanding amount of loans kept in Special Mention Account (SMA) will be at the same respective rate as stated above (0.25% to 5%) as per BRPD Circular No. 05 dated 29.05.2013. Specific provision on Sub-Standard loans and advances / investments. 20% Specific provision on Doubtful loans and advances / investments. 50% Specific provision on bad / loss loans and advances / invests. 100% Quantitative disclosure
136
b) Total gross credit risk exposures Total gross credit risk exposures broken down by major types of credit broken down by major types of exposure of the Bank: Particulars Taka in Crore credit exposure. Secured Overdraft/Quard Against TDR 2,477.67 Cash Credit/Mudaraba 2,266.35 Loan (General) 3,209.79 House Building Loan 330.14 Loan Against Trust Receipts (LTR) 530.36 Payment Against Documents (PAD) 3.19 Retail Loan 1,445.11 Lease Finance/Izara 535.02 Credit Card 112.25 SME Loan 80.43 Hire Purchase 622.55 Other Loans & Advances 2,765.00 Bill purchased/discounted-Inland 382.86 Bill purchased/discounted-Foreign 425.73 Total 15,186.45 distribution of Geographical distribution of exposures, broken down in significant areas c) Geographical exposures, broken down in by major types of credit exposure of the Bank: Particulars Taka in Crore significant areas by major types Urban: of credit exposure. Dhaka Zone 10,544.41 Chittagong Zone 3,169.27 Khulna Zone 553.89 Rajshahi Zone 363.11 Barishal Zone 12.13 Sylhet Zone 117.81 Rangpur Zone 84.16 Sub-Total 14,844.79 Rural: Dhaka Zone 165.09 Chittagong Zone 85.40 Khulna Zone 7.82 Rajshahi Zone 53.99 Sylhet Zone 29.36 Sub-Total 341.66 Grand Total (Urban + Rural) 15,186.45
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
d) Industry or counterparty type Industry or counterparty type distribution of exposures, broken down by distribution of exposures, broken major types of credit exposure of the Bank: down by major types of credit Particulars Taka in Crore exposure. Commercial Lending 2,913.20 Export Financing 585.36 House Building Loan 330.15 Retail Loan 1,445.11 Small & Medium Enterprises (SME) 1,782.12 Special Program Loan Staff Loan 2.36 Other Loans & Advances (SOD) 170.57 Loans, Advances & Lease/Investments to Managing 175.53 Director / CEO and other senior executives Industrial Loans/Investments (Details are given below) 7,782.05 Total 15,186.45 Industrial Loans/Investments Particulars Taka in Crore Agriculture 196.84 Textile Industries 529.71 Food and allied industries 381.91 Pharmaceutical Industries 60.93 Leather , Chemical, Cosmetics, etc. 40.22 Tobacco Industries 88.02 Cement and Ceramic Industries 326.99 Service Industries 2074.21 Transport & Communication Industries 313.98 Other Industries including bills purchased and discounted 3,769.24 Total
7782.05
e) Residual contractual maturity Residual contractual maturity break down of the whole portfolios, broken breakdown of the whole portfolio, down by major types of credit exposure of the Bank: broken down by major types of Particulars Taka in Crore credit exposure. Repayable on Demand Up to 1 month 3,781.36 Over 1 month but not more than 3 months 2,998.24 Over 3 months but not more than 1 year 4,106.18 Over 1 year but not more than 5 years 4,126.82 Over 5 years 173.85 Total 15,186.45 f) By major industry or counterparty type: i) Amount of impaired loans and if The amount of classified loans and advances/investments of the Bank are available, past due loans, provided given below as per Bangladesh Bank guidelines. separately; Particulars Taka in Crore Continuous Loans & Advances 4,016.85 Demand Loans & Advances 4,832.52 Term Loans & Advances 6,153.38 Short Term Agro Credit and Micro Credit 183.70 Total 15,186.45 ii) Specific and general provisions; Specific and general provisions were made on the amount of classified and and unclassified loans and advances/investments, off-balance sheet exposures and off-shore banking units, interest on receivable, diminution in value of investment and other assets-suspense of the Bank according to the Bangladesh Bank guidelines. Particulars Taka in Crore Provision on classified loans/investments
532.66
Provision on unclassified loans/investments Provision on Off-balance sheet exposures Provision for Off-shore Banking Units Provision for interest receivable on loans & advances/ investments Provision for other assets
191.50 115.69 53.84
Provision for diminution in value of investments. Total
0.95 11.25 6.83 912.72
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iii) Charges for specific allowances During the year the specific and general provisions were made on the and charge-offs during the period. amount of classified and unclassified loans and advances/investments, off-balance sheet exposure, off-shore banking units, interest on receivable, diminution in value of investment and other assets-suspense of the Bank as per Bangladesh Bank guidelines. Particulars Provision on classified loans/investments Provision on unclassified loans/investments Provision on Off-balance sheet exposures Provision for Off-shore Banking Units Provision for interest receivable on loans & advances/ investments Provision for other assets Provision for diminution in value of investments Provision for impairment loss for investment in subsidiaries Total g)
Taka in Crore 269.00 29.30 6.84 3.99 1.79 0.70 3.11 314.73
Gross Non Performing Assets (NPAs). Non Performing Assets (NPAs) to Outstanding loans and advances. Movement of Non Performing Assets (NPAs).
Particulars Opening balance
Taka in Crore 1,121.46
Addition/adjustment during the year Closing balance
66.82 1,188.28
Particulars Opening balance
Movement of specific provisions Provisions made during the period for NPAs. Transferred from unclassified loan & advances including OBU Write-off Recoveries of amounts previously written off Closing Balance
Taka in Crore 416.53 269.00 (162.66) 9.79 532.66
5. Equities: Disclosures for Banking Book Positions Qualitative disclosure
a) The general qualitative disclosure requirement with respect to equity risk, including: Differentiation between holdings on which capital Investment in equity securities are broadly categorized gains are expected and those taken under other into two parts: objectives including for relationship and strategic i) Quoted Securities (Common or Preference Shares & reasons; and Mutual Fund) that are traded in the secondary market (Trading Book Assets).
• Discussion of important policies covering the valuation and accounting of equity holdings in the banking book. This includes the accounting techniques and valuation methodologies used, including key assumptions and practices affecting valuation as well as significant changes in these practices.
138
ii) Unquoted securities include shares of Central Depository Bangladesh Limited (CDBL), investment in SWIFT and Market Stabilization Fund (MSF). The primary aim is to investment in these equity securities for the purpose of capital gain by selling them in future or held for dividend income. Dividends received from these equity securities are accounted for as and when received. Both Quoted and Un-Quoted equity securities are valued at cost and necessary provisions are maintained if the prices fall below the cost price.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Solo
At cost
Consolidated
Taka in Crore At market At cost value
At market value
b) Value disclosed in the balance sheet of investments, as well as the fair value of those investments; for quoted securities, a comparison to publicly quoted share values where the share price is materially
29.70
22.87
153.14
86.32
different from fair value. The cumulative realized gains (losses) arising from Quantitative
c) sales and liquidations in the reporting period.
disclosure
• Total unrealized gains (losses) d)
• Total latent revaluation gains (losses)
0.008
4.75
(6.13)
(66.82)
-
-
• Any amounts of the above included in Tier-2 capital. e) Capital requirements broken down by appropriate equity groupings, consistent with the bank’s methodology, as well as the aggregate amounts and the type of equity investments subject to any supervisory provisions regarding regulatory capital requirements (10% on market value). • Specific Market Risk
2.29
8.63
• General Market Risk
2.29
8.63
6. Interest Rate Risk in the Banking Book (IRRBB) Qualitative disclosure
a) The general qualitative disclosure requirement including the nature of IRRBB and key assumptions, including assumptions regarding loan prepayments and behavior of non-maturity deposits, and frequency of IRRBB measurement.
Interest rate risk is the risk where changes in market interest rates might adversely affect a bank's financial condition. Changes in interest rates affect both the current earnings (earnings perspective) as well as the net worth of the bank (economic value perspective). To evaluate the impact of interest rate risk on the net interest margin, Prime Bank monitors the size of the gap between rate sensitive assets and rate sensitive liabilities in terms of the remaining period to repricing. Repricing refers to the point in time when adjustments of interest rates on assets and liabilities occur owing to new contracts, renewal of expiring contracts or that a contract specifies a floating rate that adjusts at fixed time intervals. A maturity mismatch approach is used to measure Prime Bank’s exposure to interest rate risk. A positive mismatch means that more assets than liabilities are repriced in a given period. With a positive mismatch, a rise in market interest rates will have a positive effect on the bank's earnings. On the other hand, a negative mismatch, where more liabilities are repriced than assets in a given period, means a drop in earnings if interest rates had increased. The table presented below is showing the Interest Rate Risk Analysis of Prime Bank Limited. The analysis shows that Bank may have a positive earnings impact of Taka 0.676 crore in the first quarter and only Taka 0.009 crore in the second quarter (its negative gap offset by previous quarter’s positive gap), for a total year-to-date positive earnings impact of Taka 0.685 crore. In the third quarter, the total year-to-date accumulated earnings impact continues to be positive with an increasing trend (Taka 2.75 crore). Here, it is observed that accumulated earnings for the year 2015 owing to a 1% increase in interest rate is a gain of Taka 1.83 crore. The rule of thumb suggests that quarterly gaps, causing an earnings impact of 10% of the Bank’s average quarterly net profit for each 1% change in interest rates, should be carefully handled by the Bank’s Management. The last row of the following table reveals that earnings impact on Prime Bank’s average quarterly net profit is very insignificant and remains within the acceptable limit as prescribed by Bangladesh Bank.
139
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Interest Rate Risk Analysis (for 1% change in the market rate of interest) Quantitative disclosure
increase (decline) in b) The earnings or economic value
Particulars
(or relevant measure used by management) for upward and downward rate shocks according Rate Sensitive Assets to management’s method for Rate Sensitive Liabilities measuring IRRBB, broken down GAP by currency (as relevant). Cumulative GAP Adjusted Interest Rate Changes (IRC) Quarterly earnings impact (Cum. GAP * IRC) Accumulated earning impact to date Earning impact/Avg. quarterly net profit
1 to 90 days 8,675.81 8,401.75 274.06 274.06
Over 3 Over 6 Over 9 months months months to up to 6 to up to 9 to up to 1 months months year Taka in Crore 2,232.02 1,268.91 694.67 2,502.04 1,048.31 681.16 (270.02) 220.60 13.51 4.03 224.63 238.14
1.00%
1.00%
1.00%
1.00%
0.676
0.009
0.553
0.587
0.676
0.685
1.24
1.83
1.13%
1.15%
2.07%
3.05%
7. Market Risk: Qualitative disclosure
a) i) Views of Board of Directors Market risk is the possibility of losses of assets in balance sheet and off(BOD) on trading/ investment balance sheet positions arising out of volatility in market variables i.e., interest activities. rate, exchange rate and price. Allocation of capital is required in respect of the exposure to risks deriving from changes in interest rates and equity prices in the bank’s trading book, in respect of exposure to risks deriving from changes in foreign exchange rates and commodity price in the overall banking activity. The total capital requirement for banks against their market risk shall be the sum of capital charges against: Interest rate risk Equity position risk
Foreign exchange (including gold) position risk throughout the bank’s balance sheet and Commodity risk.
ii) Methods used to measure Measurement Methodology: Market risk. As banks in Bangladesh are now in a stage of developing risk management models, Bangladesh Bank has suggested the banks for using Standardized Approach for credit risk capital requirement for banking book and Standardized (rule based) Approach for market risk capital charge in their trading book. Maturity Method has been prescribed by Bangladesh Bank in determining capital against market risk. In the maturity method, long or short positions in debt securities and other sources of interest rate exposures, including derivative instruments, are slotted into a maturity ladder comprising 13 time-bands (or 15 time-bands in case of low coupon instruments). Fixedrate instruments are allocated according to the residual term to maturity and floating-rate instruments according to the residual term to the next re-pricing date. In Standardized (rule based) Approach the capital requirement for various market risks (interest rate risk, price, and foreign exchange risk) are determined separately. The total capital requirement in respect of market risk is the sum of capital requirement calculated for each of these market risk sub-categories. e.g.: a. Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk; b. Capital Charge for Equity Position Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk; c. Capital Charge for Foreign Exchange Risk = Capital Charge for General Market Risk; d. Capital Charge for Commodity Position Risk = Capital charge for general market risk.
140
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C o r p o ra t e G ove r n a n c e
iii)
Market
Risk
Management Treasury Division manages the market risk and ALCO monitors the
system.
activities of treasury Division in managing such risk.
iv) Policies and processes for To mitigate the several market risks the bank formed Asset Liability mitigating market risk.
Management Committee (ALCO) who monitors the Treasury Division’s activities to minimize the market risk. ALCO is primarily responsible for establishing the market risk management and asset liability management of the Bank, procedures thereof, implementing core risk management framework issued by the regulator, best risk management practices followed by globally and ensuring that internal parameters, procedures, practices/polices and risk management prudential limits have been set up and followed. The Treasury Division are taking following measures to minimize the several market risks: i) Foreign exchange risk management: it is the risk that the bank may suffer losses as a result of adverse exchange rate movement during a period in which it has an open position in an individual foreign currency. This risk is measured and monitored by the Treasury Division. To evaluate the extent of foreign exchange risk, a liquidity Gap report is prepared for each currency. ii) Equity Risk: Equity risk is defined as losses due to changes in market price of the equity held. To measure and identify the risk, mark to market valuation of the investment portfolios of share is being done. Mark to market valuation is done against a predetermined limit. At the time of investment, following factors are taken into consideration: a. Security of Investment b. Fundamentals of securities c.
Liquidity of securities
d. Reliability of securities e.
Capital appreciation
f.
Risk factors and
g. Implication of taxes etc.
Quantitative disclosure
b)
The capital requirements for:
Solo
Consolidated Taka in Crore
Interest rate risk
50.71
50.71
Equity position risk
4.57
17.27
Foreign exchange risk and
2.90
2.90
Commodity risk Total Capital Requirement
-
-
58.18
70.87
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8. Operational Risk: Qualitative disclosure
system to Operational risk is defined as the risk of loss resulting from inadequate or a) i) Views of BOD on reduce Operational Risk failed internal processes, people and systems or from external events. This definition includes legal risk but excludes strategic and reputation risk. It is inherent in every business organization and covers a wide spectrum of issues. The Board of Directors (BOD) of the Bank and its Management firmly believe that an effective internal control systems has been established within the Bank to ensure adequacy of the risk management framework and compliance with a documented set of internal policies concerning the risk management system which mainly include, # Top-level reviews of the Bank's progress towards the stated objectives; # Checking for compliance with management controls; # Policies, processes and procedures concerning the review, treatment and resolution of non-compliance issues; and # A system of documented approvals and authorizations to ensure accountability to the appropriate level of management. Bank has ensured some other internal practices to be in place as appropriate to control operational risk. Examples of these include: # Close monitoring of adherence to assigned risk limits or thresholds; # Maintaining safeguards for access to, and use of, bank’s assets and records; # Ensuring that staffs have appropriate expertise and training; # Regular verification and reconciliation of transactions and accounts. The BOD has modified Bank’s operational risk management process by issuing a high level standard like SOP, supplemented by more detailed formal guidance. This explains how the bank manages operational risk by identifying, assessing, monitoring, controlling and mitigating the risk, rectifying operational risk events, and implementing any additional procedures required for compliance with local regulatory requirements. The Bank maintains and tests contingency facilities to support operations in the event of disasters. Additional reviews and tests are conducted in the event that any branch of the bank is affected by a business disruption event, to incorporate lessons learned in the operational recovery from those circumstances. Plans have been prepared for the continued operation of the bank’s business, with reduced staffing levels. ii) Performance gap of executives Human Resources and staffs. People: The Prime Assets! Prime Bank Limited has a favorable image as an employer of choice. The Bank has positioned itself with a performance-driven rewarding work culture; where employees are treated with respect and receive widened opportunities to realize their diverse potentials fully as well as benefit the organization by demonstrating value creating behaviors. A group of motivated and engaged employees with diverse talents are one of the strengths of Prime Bank. Prime Bank has a special focus on converting the human resources into the human capital, i.e., ‘knowledge, competency, attitude and behavior embedded in employees’. Manpower Planning and Recruitment The recruitment and selection of Prime Bank follows the ‘best fit’ approach. As per Bank’s requirement, Human Resources Division ensures that the potential candidates are properly assessed, selected and placed on-time as per required competencies (KSA – Knowledge, Skill & Attributes) and experience. Prime Bank has a recruitment policy that clearly states the criteria and procedures to recruit fresh and lateral entrants. The Bank has a Management Trainee Program which is aimed to recruit outstanding fresh graduates and develop them as the future leaders of the Bank.
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Diversity in Workplace Prime Bank believes that diverse, heterogeneous teams generate greater creativity, innovation and business development. Prime Bank is aware of the fact that an inclusive culture maintains and drives workforce diversity by fostering the exchange of ideas and collaboration among individuals and across groups. To speak simply, the constant success of PBL depends in part on maintaining a plurality of perspectives. No. of employees by age group and gender: Age group
No. of Emp. Percentage Gender Male Below 30 yrs 481 16.39% Female Male 30 - 40 yrs 1,771 60.36% Female Male 40 - 50 yrs 540 18.40% Female Male 50 years and above 142 4.84% Female 2,934
100%
No. of Emp. 336 145 1,364 407 464 76 135 7
Total
2,934
PBL practices equal employment opportunity for competent candidates regardless of their gender, age, locality or ethnicity. While recruiting fresh graduates, PBL source the pool from different recognized public and private universities; with a view to creating a diverse work force. Besides, the ration of male and female employees has been increasing over the time. Currently, approximately 21.00% of employees are female. Gender diversity among employees: Gender
No. of Employees
Percentage
Male
2299
78.36%
Female Total
635 2934
21.64% 100.00%
Increasing ratio of Female over the years: Year
% of Female Employees
2011
18.59%
2012
19.77%
2013
20.52%
2014
21.00%
2015
21.64%
The ration of male and female employees has been increasing over the time. Currently, approximately 602 of the employees are female. PBL is gradually encouraging the women to take up leadership opportunity which will ensure a more balanced work force. Learning & Development Prime Bank continuously thrives to transform Human Resources to Human Capital through appropriate learning and development initiatives in every aspects of work area. HR Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment. The ‘Management Trainee Development Program’ of Prime Bank is designed for newly recruited Management Trainees (MTs) who receive job rotation across the country and different functions in a structured process. This effectively designed program provides ample opportunities to acquire necessary knowledge, skills and on-the-job-experience. All the MTs who were recruited in 2014 are going through the development program. In 2014, Prime Bank’s internal HR Training and Development Centre arranged training on 62 different topics for 4,370 enthusiastic participants. Besides, a total of 644 employees were sent to participate in various training programs/conferences in home and abroad. In total, the number of participants who participated in trainings/conferences has increased by 48% over the last year.
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The whole capacity building efforts is pivoted on the unique understanding of banking sector as well as required behavioral skills to create a group of competent professionals with strong leadership skill. The banking sector is complex and diverse with evolving nature of threats and the risks. So, the training module is updated time to time for employees of the Bank in the changing context of financial market. Compensation & Benefits Prime Bank has a flexible compensation and benefits system that helps to ensure pay equity, is linked with performance that is understood by employees, and keeps in touch with employee desires and what’s coveted in the market, while maintaining a balance with the business affordability. The compensation and benefits are regularly reviewed through market and peer group study. The well-crafted total rewards help the Bank to attract, motivate and retain talent that produces desired business results. All employees are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability. Other than monthly competitive base pay and a good number of allowances, Prime Bank has variety of market-competitive benefits schemes. The various cash and non-cash benefits include: Company car for Top Level Executives, Car maintenance allowance, Leave fair assistance allowance, Medical treatment allowance, Maternity benefits, Car loan facility, House loan facility, Staff loan at discounted interest rate, House furnishing allowance, Travel allowance, Festival bonus, Annual leave etc. PBL also provides long-term as well as retirement benefits to employees, like: Leave encashment, Provident fund, Gratuity benefit, Retirement benefit, Partial and full disability benefit, Death benefit to family members etc. Career Progression & Succession Planning PBL always plans for employees so that they can advance their career goals. This includes advancement into more responsible positions. The company supports career opportunities internally so that talented employees are placed in upgraded positions and thereby enables them to deliver their greatest value to the organization. In addition to vertical career growth, employees may also grow horizontally. Whenever possible, Human Resources Division mobilizes employees across different functions and branches; thus assisting them to progress with varied skills and experience. Besides encouraging individual employee growth and development, the Bank also gives effort to identify and retain the human resources who can potentially be the successors of mission critical roles. Prime Bank acknowledges that Succession Planning & Management is vital to the continued success of the Bank. So, the Bank continuously assesses organizational, divisional and team capability gaps to identify, develop and retain the successors in a timely manner to meet the demands of the future. Performance Management Program Prime Bank has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. The performance evaluation is a step by step by process where an employee first rates himself/herself. Then s/he is rated by the first level supervisor and then finally by the second level supervisor. To ensure a proper performance evaluation and rate the employees based on their comparative performance, the line Management is guided by the Human Resources Division. This performance appraisal system is considered as crucial for the Bank as this is a very important tool to identify and distinguish the performers and non-performers. Prime Bank believes that a well-executed performance appraisal system can help to reward the deserving employees, as well as help to ensure further development program for the rest.
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The comprehensive performance management also includes an assessment of employees’ functional and leadership competencies. This appraisal process helps to identify the competency gap and training needs of employees. All permanent employees of PBL undergo annual performance appraisal process. Reward & Recognition Program The Bank has a well-designed Reward & Recognition program that gives special attention to employees’ actions, efforts, behavior and performance. It meets the intrinsic psychological need for appreciation of employees’ efforts and supports business strategy by reinforcing certain behaviors (e.g., extraordinary accomplishments) that contribute to Bank’s success. Followings are the different cash and non-cash awards given to employees for their exemplary works:
The Chairman’s Star of the Stars Award (CSS)
CEO’s Banker with Exceptional Service Traits Award (BEST)
Outstanding Recovery Initiative Award (ORI)
Commendable Branch Performance Award (CBPA)
Trainees with Outstanding Performance Award (TOP)
Around the Year Appreciation Award (AAA) etc.
Decent Workplace Prime Bank has a decent work environment where employees can work with dignity, have the freedom to express opinions, can participate in the decision making process that affect their lives, and receive equal treatment and opportunity. The Bank is committed to ensure the best practices in compliance with the labor code of the country. Bank Management believes that the business can grow favorably if the organization enables employees through creating and maintaining a decent workplace. In Prime Bank, employees have the right to exercise freedom of association or collective bargaining following the legal procedure of country laws. However, employees have never formed or wanted to form any collective bargaining agency. The Bank follows non-discriminatory approach in all HR policies and practices. The salary of an employee is determined based on his/her competency, experience and performance. During the period of 2015 neither any incident regarding discrimination nor any grievance related to labor practices nor human right has been reported. The Bank neither employs child labor nor has any provision for forced labor. Employees have the right to resign from their employment serving proper notice period and following the internal procedures. Ensuring a decent workplace also encompass Bank’s investment decisions as well as agreements with the suppliers and contractors. For instance, human right, as appropriate, is covered as an integral part of decision making for major financial investments. Among all the significant investments, garments and manufacturing industry contain major stakes where issues related to human rights are more relevant and critical. Hence, any such investment agreement is subject to screening of human right issues along with other criteria. On the other hand, all the agreements of Prime Bank with suppliers or contractors undergo due assessment process which requires complying with Labor Code and other applicable laws of the country. Moreover, the procurement decisions are also subject to conformity with International Labor Conventions. The team involved in procurement visits suppliers and contractors’ premises on need basis to monitor working conditions and other relevant issues like labor practices, human right etc. The security personnel employed by the Bank are formally trained and aware of policies and procedures regarding human right issues. The training requirement also applies to third party organizations that provide security personnel to the Bank.
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The most recent addition to encourage female employees at the workplace is that they are now able to avail child day-care facility in Motijheel area. Female employees having offices in Motijheel and peripheral area now can avail child day-care facility where they can keep their children in a safe and secured environment. This will not only help to retain female employees but will relieve them of the dilemma of leaving their child/children at home. Code of Ethics and Business Conduct Prime Bank is always committed to establish the highest level of business compliance and ethical standard. The Bank has an ‘Employee Code of Ethics and Business Conduct’ – a framework of ethical behaviour for all the employees of the organization. Prime Bank maintains its reputation as a law-abiding organization and a good corporate citizen. It complies with all the prevailing laws and regulations of the country. Employees are trained and guided to conduct business in compliant manner. The policy and procedures regarding Prime Bank’s business process are prepared in adherence to the laws and regulations. All employees are properly inducted to comply with Code of Ethics and conform to the relevant laws and regulations. HR Division makes sure that during joining employees read, understand the ‘Code of Ethics and Business Conduct’ and acknowledge the same by signing. The Board of Directors of Prime Bank approved the ‘Employee Code of Ethics and Business Compliance’ with a commitment to set the high ethical standards so that customers’ expectations and interests are protected in a compliant manner. Employees are encouraged to report any wrong-doing within the Bank. The Head of Internal Control and Compliance and Human Resources Divisions are the primary channel to report any incident. Openness in communication to foster the exchange of knowledge and ideas Employee communications and consultation are the lifeblood of any business. Proper exchange of information and instructions helps the Bank to function more efficiently and provides the opportunity to build greater trust among employees and management in discussing issues of mutual interest. To ensure effective employee communications, management takes a positive lead. The Management has introduced a Whistleblower Protection Policy which intendeds to encourage and enable employees and others to raise serious concerns internally so that the Management can address and correct inappropriate conduct and actions. Employees have an avenue to report concerns about violations of code of ethics or suspected violations of law or regulations. The policy covers the protection of a whistleblower in two important areas -- confidentiality and against retaliation. An employee who retaliates against someone who has reported a violation in good faith is subject to discipline up to and including termination of employment. Additionally, now there is an avenue to report sexual harassment in the workplace. The policy aims to ensure a working environment in line with our values, where all individuals are treated equally, fairly and with dignity and also foster compliance with governing laws pertaining to sexual harassment. Such policy creates awareness about the nature of offences and the consequences of an offender. This not only fosters a neutral environment but gives a feeling of assurance that any wrong doing will be strictly addressed by the Management. In addition to day to day regular communication, Prime Bank has arranged a Town Hall Meeting for 2015 on 12th December, 2015 for the employees of Dhaka Division to discuss on the contemporary issues on Centralization and Broad banding. Such meeting is a first for Prime Bank Limited and it has allowed employees with the opportunity to interact with the top Management and place their concerns regarding the recent changes. This sort of initiative helps to build an improved management-employee relation as it creates an avenue for one to one interaction.
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Any operational changes are properly planned and managed. Management follows a participative approach during any major transformation followed by prior communication to the employees. Since there is no trade union or employee association, no notice period regarding operational change is stipulated by any collective agreement. Achievements of 2015: The relentless pursuit of HR Division continues throughout the year. Furthermore, it aims to ensure excellence in all HR policies and practices in line with the mission and vision of the Bank. Followings are some of the mentionable activities done in the year 2015:
Successfully implemented and ran automation projects including Performance Appraisal System to enhance employee efficiency
Initiated, developed and successfully implemented Broad banding pay structure policy for employees to attract, motivate and retain performers.
Successfully amended/ introduced TE/DE Policy, Sexual Harassment Policy, Whistle Blowing Policy, Leave Policy, Service Rule Book Update etc.
Prime Bank is moving forward with the transformational initiatives in order to grow up with the challenge of tapping opportunities to meet both organizational and employee needs. The transformational phase started with introducing HR as “Strategic Business Partner” which already generated value in people & process management. Prime Bank is working to ensure an employee centric work culture with automated HR services & delivery and with focused skill development for employees. In coming days HR will pursue solid contemporary thoughts and action plans to draw results in many fronts as the Change Agent for Employee & Business Development.
Human Resources Accounting in PBL: To understand and draw an inference on how well the Human Resources are yielding on the investment made, Prime Bank tracks the profit and related HR costs. In this process, the costs of recruitment, training, compensation, other direct cost related to employees are measured to estimate the overall investment. The costs are then compared with several parameters. This analysis helps the Bank to have an outlook and make prudent decisions on future HR investment. Valuing the human resources and measuring the direct impact of the cost spent for employees is difficult as there is no specific or widely adopted method. Human Resources accounting is the process of valuing human resources as assets. Presently, this is not accounted in the conventional accounting practices. The period of existence of a set of human resources in an organization cannot be predicted; hence treating and valuing them as assets in strict sense is not plausible. However, Followings are some of the parameters which are tracked year on year. (Taka in Million) Particulars
2015
2014
Salary cost per employee
1.23
1.15
Operating cost per employee
2.10
2.01
Operating income per employee
4.11
4.18
Profit before provision per employee
2.01
2.17
Profit before tax per employee
0.94
1.27
Salary cost as percentage of operating cost
58.41
57.09
Salary cost as percentage of operating income
29.83
27.48
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iii) Potential
Risk factors/Potential external events:
external
It is needless to say that there are certain risk factors which are external
events
in nature and can affect the business of the Bank. The factors discussed below can significantly affect the business:
General business and political condition Performance of Prime Bank greatly depends on the general economic conditions of the country. The political unrest during first quarter of the year has an impact on decrease in bank’s loan exposures. Many factors like lack of confidence of private investors, infrastructural development, scarcity of gas & electricity, inflation etc. are responsible for lessening private sector investment growth which affects banks’ lending. Political stability is the main precondition to attract private sector investment which directly linked with the credit growth of commercial banks.
Changes in credit quality of borrowers Risk of deterioration of credit quality of borrowers is inherent in banking business. This may be the result of global economic crisis and supply side distortion. Signals received from the global outlook are mixed. While Europe is floundering in near recession, US recovery is evident if not robust. Both ‘global economic outlook’ and ‘national outlook’ are not that congenial for the borrowers to run their own business profitably enough to run banks’ loan installments. It has ultimately put an impact on banks’ asset quality. Deterioration in credit quality requires provisioning.
Changes in policies and practices of regulatory bodies to revise practices, pricing and responsibilities of the financial institutions PBL is subject to regulations and compliance of regulation is must. Changes in policies with regard to interest rates, loan pricing, spread etc. have significant effect on the performance of the Bank. Bangladesh Bank is expected to continue its persuasion to reduce the spread and charges further which is likely to affect the performance. Changes in provisioning requirement have also affected the performance of the bank.
Implementation of Basel-III in Bangladesh After finding numerous weaknesses in the global regulatory framework and in banks’ risk management practices, the regulatory authorities have focused on streamlining the global capital and liquidity rules (Basel III) with a view to improving and strengthening the banking sector’s ability to absorb shocks arising from financial and economic stress. The table presented in the ‘Capital Adequacy’ part of this document shows shat Prime Bank has adequate Tier-1 & Tier-2 Capital to maintain all the ratios at the required level. It has covered both Minimum Capital Requirement (MCR) as well as Capital Conservation Buffer (CCB) with its eligible capital after considering all regulatory adjustments.
Volatility in equity market The Bangladesh Securities and Exchange Commission and the stock exchanges improved their supervisory role but the equity market is still volatile. The ongoing political unrest has also added to the volatility. If volatility continues it is likely to affect the performance of the Bank.
The risk of litigation In the ordinary course of business, legal actions, claims by and against the bank may arise. The outcome of such litigation may affect the financial performance of the Bank.
Success of strategies PBL is proceeding with its strategic plan and its successful implementation is very important for its financial performance. Major deviation due to external and internal factors will affect the performance of the Bank.
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iv) Policies
Operational Risk is the risk of financial losses related to breakdown in
and
internal control and corporate governance. Such breakdown can be the
processes for mitigating
result of human error, inadequate or failed internal process and technical system, fraud or any other adverse external event. Operational risk may be
operational
the most devastating and at the same time most difficult to anticipate. Risk
risk.
Management Division (RMD) of the bank is primarily responsible to drive and look after the overall risk management function including operational risk management. RMD under the leadership of Chief Risk Officer (CRO) is entrusted to ensure:
Drive and populate the culture of pro-active risk identification and mitigation.
Lead bank wide integrated risk management approach. Validate and improve the reliability and effectiveness of business operation and the operations of the risk management framework.
Quickly identify the Bank’s operational deficiencies. Increase accuracy and visibility of risk information. Designing of organizational structure by clearly defining roles and responsibilities of individuals to support the identification, assessment, control and reporting of key risk indicators; Formulation of overall risk assessment and management policies, methodologies, guidelines and procedures for risk identification, risk measurement, risk monitoring, defining an acceptable level of risk, mitigation of all the core risks in line with their respective guidelines provided by Bangladesh Bank; Reviewing and updating all risks on systematic basis as necessary at least annually, preferably twice a year, ensuring that adequate controls exist and that the related returns reflect these risks and the capital allocated to support them. Beside the six core risks and operational risk, following risks are also being reviewed by RMD: Legal Risk; Reputation risk; Environmental & social risk; Insurance Risk; Strategic risk; and Sustainability Risk Setting the portfolio objectives and tolerance limits/parameters for each of the risks; Developing organizational capability in ensuring safety of the employees; Development of information systems/MIS inflow and data management capabilities to support the risk management functions of the Bank. Ensure compliance with the core risks management guidelines at the department level, and at the desk level; The unit will work under bank’s organizational structure and suggest to the management to take appropriate measures to overcome any existing and potential financial crisis; Analysis of self-resilience capability of the Bank; Initiation to measure different market conditions, vulnerability in investing in different sectors; The unit will also work for substantiality of capital to absorb the associated risk in banking operation.
Activities undertaken by “Risk Management Division” since inception and recent approaches Risk Management Division (RMD) is the propagator of effective risk management across the bank; Aligned the division’s structure and committees in line with the central bank directives/circulars; Ensured all the regulatory reporting are prepared and submitted on time;
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Reviewed Product Program Guidelines (PPG) and suggested a standard template to bring discipline and uniformity in managing asset and liability products.
Driving the initiatives of business continuity management across the bank;
Ensured that development or review of internal processes/policies/ guidelines/Manuals are vetted by RMD;
RMD played a vital role in determining strategies in consistency with risk management policy, which can measure, monitor, and maintain acceptable risk level of the bank;
Prudently oversaw Capital Management, Internal Capital Adequacy Assessment Process (ICAAP), Credit Risk, Market Risk (Foreign Exchange Risk, Interest Rate Risk, and Equity Risk), Liquidity Risk, Operational Risk (Internal Control & Compliance Risk, Reputation Risk, and Money Laundering Risk) as guided by the central bank;
RMD analyzed the overall portfolio of the Bank through Risk Management Paper, Stress Testing and ICAAP, also effectively engaged in preparation of efficient Management Information System (MIS) report for the higher management and for the Risk Management Committee of the Board.
Risk Management Division has recently formed a Risk Management Forum (RMF), a common platform among the all divisions for driving the culture of pro-active risk identification and escalation of risk across the bank. The member of Risk Management Forum meets regularly in monthly meeting to analyze identified/potential risks and suggest mitigation followed by monitoring.
Risk Management Division (RMD) has developed an online module named ‘Risk Platform’ for escalation and reporting of identified & anticipated risk events of the Bank proactively to the management as part of integrated risk management approach. Stress Testing in PBL: Stress testing framework as provided by Bangladesh Bank assesses the impact on CAR due to minor, moderate and major level of shock in terms of credit risk, exchange rate risk, liquidity risk, equity price risk and interest rate risk. Stress testing for credit risk assesses the impact of increase in the level of Non-Performing Loans (NPLs) of the banks for the following scenario
Performing loan directly downgraded to B/L- Sector wise Concentration 1
Performing loan directly downgraded to B/L- Sector wise Concentration 2
Increase in NPLs due to default of top large loan borrowers
Negative shift in NPLs categories
Decrease in the Forced Sale Value (FSV) of the collateral
The stress testing based on the financial performance of the Bank as on December 31, 2015 has also been completed which shows that the bank has adequate capital to absorb minor level of shocks for combined shock. However, for absorbing moderate and major levels of shock which is very unlikely in the industry, the bank may require additional capital. The Banks operating in Bangladesh shall compute the capital requirements for operational risk under the Basic Indicator Approach (BIA). Under BIA, the capital charge for operational risk is a fixed percentage, denoted by ‘D (alpha)’ of average positive annual gross income of the bank over the past three years. Figures for any year in which annual gross income is negative or zero, should be excluded from both the numerator and denominator when calculating the average. The capital charge may be expressed as follows:
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v) Approach
K = [(GI 1 + GI2 + GI3) D]/n
for calculating capital charge
WhereK = the capital charge under the Basic Indicator Approach
for
operational
GI = only positive annual gross income over the previous three years (i.e.,
risk.
negative or zero gross income if any shall be excluded) D = 15 percent n = number of the previous three years for which gross income is positive. Gross income: Gross Income (GI) is defined as “Net Interest Income” plus “Net non-Interest Income”. It is intended that this measure should: i) be gross of any provisions; ii) be gross of operating expenses, including fees paid to outsourcing service providers; iii) exclude realized profits/losses from the sale of securities held to maturity in the banking book; iv) exclude extraordinary or irregular items; v) exclude income derived from insurance.
Particulars
Quantitative disclosure
b) The capital requirement for operational risk
Solo Basis
Consolidated
Taka in Crore 217.69
224.23
9. Liquidity Ratio: Qualitative Disclosure
(a)
- Views of BOD on system to reduce Liquidity Risk - Methods used to measure Liquidity Risk - Liquidity risk management system - Policies and processes for mitigating Liquidity Risk. Bank is maintaining the ratios mentioned in the Bangladesh Bank guideline considering all the relevant factors, policies and procedures to mitigate Liquidity Risk. A brief discussion on the emergence of those ratios and their interpretation is stated in the following part: In the aftermath of the financial crisis of 2008-09, the Basel Committee of Banking Supervision (BCBS) emphasized on a program of sustainability revising its existing guidelines with a goal to promote a more resilient banking sector through further restructuring of the existing approach by strengthening global capital and liquidity rules within the global regulatory framework. BCBS proposed two liquidity ratios in December 2009 i.e. 1. Liquidity Coverage Ratio (LCR) and 2. Net Stable Funding Ratio (NSFR). Following that Bangladesh Bank vide its BRPD Circular No-07 dated March 31, 2014, declared the road map for implementing the Revised Regulatory Capital Framework for banks in line with Basel III in Bangladesh starting from the year 2015. According to the revised road map issued vide BRPD Circular No. 18/2014, from January 2015 and onwards Banks have to maintain a standard LCR and NSFR, the minimum standard of which is defined by Bangladesh Bank. Prior to LCR and NSFR, Cash Reserve Ratio (CRR), Statutory Liquidity Reserve (SLR), and Advance Deposit Ratio (ADR) were grossly used as benchmark parameter of measuring a bank’s liquidity in most of the countries. But in the wake of financial crisis due to the limitations, as well as ineffectiveness of those ratios, the BCBS suggested more reforms in the liquidity measures like LCR and NSFR which are more relevant with the structure and mix of Bank’s balance sheet as well as funding. For the LCR, the stock of high quality liquid assets is compared with expected cash flows over a 30 day stress scenario. The expected cash outflows are to be covered by sufficient liquid, high quality assets. It aims to ensure that a bank maintains an adequate level of unencumbered, high-quality liquid assets that can be converted into cash to meet its liquidity needs for 30 calendar days. The minimum standard set by BB is that LCR shall be greater than or equal to 100. On the other hand, the NSFR compares available funding sources with funding needs resulting from the assets on the Balance Sheet. Like the LCR, the NSFR calculations assume a stressed environment. It aims to limit over-reliance on short-term wholesale funding (mostly interbank) during times of abundant market liquidity, increase stability of the funding mix, encourage better assessment of liquidity risk across all on- and off-balance sheet items, and promotes funding stability. The minimum standard set by BB is that NSFR shall be greater than 100.
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Quantitative
(b)
Disclosures
- Liquidity Coverage Ratio (LCR): 180.99% - Net Stable Funding Ratio (NSFR): 108.33% - Stock of High quality liquid assets: BDT 7,989.73 crore - Total net cash outflows over the next 30 calendar days: BDT 4,414.46 crore - Available amount of stable funding: BDT 20,604.17 crore - Required amount of stable funding: BDT 19,019.15 crore ( The above ratios and balance are stated as per position of 31 December, 2015)
10. Leverage Ratio Qualitative
(a) Views of BOD on system to reduce excessive leverage policies and processes for managing excessive
Disclosures
on and off-balance sheet leverage: In order to avoid building-up excessive on- and off-balance sheet leverage in the banking system, a simple, transparent, non-risk based leverage ratio has been introduced. The leverage ratio is calibrated to act as a credible supplementary measure to the risk based capital requirements. The leverage ratio is intended to achieve the following objectives: a.
constrain the build-up of leverage in the banking sector which can damage the broader financial system and the economy
b.
reinforce the risk based requirements with an easy to understand and a non-risk based measure
Prime Bank calculates leverage ratio on quarterly basis and submits it to the Department of Off-site Supervision (DOS), Bangladesh Bank along with CRAR report. Approach for calculating exposure: A minimum Tier-1 leverage ratio of 3% has been prescribed by Bangladesh Bank to maintain by the Banks both at solo and consolidated level. Accordingly, Prime Bank maintains leverage ratio on quarterly basis. The formula for calculating leverage ratio is as under: Leverage Ratio = Tier-1 Capital (after related deductions)/ Total Exposure (after related deductions) Quantitative Disclosures
152
(b) Sl.
Particulars
Solo
Consolidated
In crore Taka
A.
Tier-1 Capital
2,297.66
2,299.90
B.
On balance sheet exposure
24,641.82
24,773.13
C.
Off-balance sheet exposure
5,642.46
5,642.46
D.
Total deduction from on and off-balance sheet exposure
E.
Total exposure (B+C-D)
F.
Leverage Ratio (A/E)*100
12.90
15.35
30,271.37
30,400.24
7.59%
7.57%
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CAPITAL PLAN Capital planning is a dynamic and ongoing process that, in order
ensuring that the return on capital commensurate with risks
to be effective, is forward-looking in incorporating changes in
undertaken by respective business units and subsidiaries. The
a bank’s strategic focus, risk tolerance levels, business plans, operating environment, or other factors that materially affect
process involves an on-going review and approval by Prime Bank’s senior management and Board of Directors (Board) in
capital adequacy. Capital planning assists the Bank’s Board of
line with Prime Bank’s risk appetite and target capital adequacy
Directors and senior management to:
ratios. The role of capital management is to ensure capital
a.
Identify risks, improve their understanding of the bank’s overall risks, set risk tolerance levels
levels are adequate and with efficient capital mix to:
above the minimum regulatory requirements which
b. Assess strategic choices in longer-term planning c.
e.
will support business growth and material risks undertaken.
Identify vulnerabilities, such as concentrations and assess their impact on capital
d. Integrate business strategy, risk management, capital and liquidity planning decisions, including due diligence for a merger or acquisition and Have a forward-looking assessment of the bank’s capital needs, including capital needs that may arise from rapid changes in the economic and financial environment
The most effective capital planning considers both short-term and long-term capital needs and is coordinated with a bank’s overall strategy and planning cycles, usually with a forecast horizon of at least five years. Banks need to factor events that occur outside of the normal capital planning cycle into the capital planning process; for example, a natural disaster could have a major impact on future capital needs. The capital planning process should be tailored to the overall risk, complexity, and corporate structure of the bank. The bank’s range of business activities, overall risks and operating environment have a significant impact on the level of detail needed in a bank’s capital planning. A more complex institution with higher overall risk is expected to have a more detailed planning process than an institution with less complex operations and lower risks. While the exact content, extent, and depth of the capital planning process may vary, an effective capital planning process includes the following components: I.
Identifying and evaluating risks
II.
Setting and assessing capital adequacy goals that relate to risk
III. Maintaining a strategy to ensure capital adequacy and contingency planning IV. Ensuring integrity in the internal capital planning process and capital adequacy assessments Our approach to capital management is driven by its strategic objectives whilst ensuring that the regulatory requirements, capital targets and risk appetite are met at all times across Prime Bank. Effective capital management is fundamental to the sustainability of Prime Bank. As such, Prime Bank proactively manages its capital position, capital mix and capital allocation to meet the expectations of key stakeholders such as regulators, shareholders, investors, rating agencies and analysts whilst
Maintain adequate capital ratios at levels sufficiently
Maintain the Bank’s strong credit ratings from reputed rating agencies.
Allocate and deploy capital efficiently to business units and subsidiaries to optimize return on capital.
Remain flexible to opportunities; and
Build and invest in business, even in businesses reasonably stressed
take
advantage
of
future
HOW DO WE MANAGE CAPITAL AT PRIME BANK Our capital management is guided by robust capital management policies and procedures across the Bank. The Prime Bank’s approach to managing capital is set out in various frameworks which are approved by the Risk Management Committee (RMC), and the Board and includes amongst others:
a. Capital Management Framework The Capital Management Framework comprises the governance, policies and procedures which set out the requirements for effective management of capital at Prime Bank level and its entities, including identification, assessment, monitoring, managing and reporting of any capital matters to relevant committees such as RMC and the Board. The Capital Management Framework contains the basis for setting of internal capital targets and also the principles for the development and usage of Risk Adjusted Return on Capital (RAROC) to measure and manage the return on capital across the Bank. b. Capital Contingency Plan Safeguarding the capital levels of all entities across Prime Bank is of paramount importance. The Capital Contingency Plan is to ensure robust monitoring of capital position and provides a framework for effective governance and escalation process in the event of a capital crisis. The Capital Contingency Plan also formalizes the basis, strategies and action plans to restore capital back to healthy levels in the fastest possible time without affecting business plans, assets growth and strategic agenda.
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c. Annual Capital Plan
stakeholders and support its strategic business objectives.
The Annual Capital Plan involves detailed planning of the Bank’s
Following are some major initiatives that have been undertaken
strategic capital plan over at least a 3-year horizon period. The
by Prime Bank during the year.
plan highlights the capital projections, capital requirements,
Prime Bank issued a Basel III compliant Tier 2
levels of capital and capital mix to support the Bank’s business
Subordinated bond for Taka 2,500 million. Besides
plan and strategic objective.
strengthening its total capital base, it has also improved its capital mix with a Basel III compliant subordinated capital instrument.
CAPITAL STRUCTURE Prime Bank places strong emphasis on the quality of its capital in order to continue meeting the minimum regulatory requirements and support business growth and risks undertaken. Thus, Prime Bank holds a significant amount of its capital in the form of common equity which is permanent and has the highest loss absorption capability on going concern basis. In addition to common equity, Prime Bank also maintains other types of capital instruments such as Subordinated Debts in order to optimize capital mix and reduce overall costs of capital.
CAPITAL INITIATIVES DURING THE YEAR
Prime Bank is required to comply with
Capital Adequacy
Framework (Capital Components) for the determination of capital and computation of Capital to Risk Weighted Asset Ratio (CRAR) which are subject to a series of transitional arrangements, commencing 1 January 2015 and to be fully effective by 2019. Under BB’s capital adequacy framework, which came into effect on 1 January 2015, we are required to maintain the regulatory capital as per the followings table. The regulatory minimum capital requirements will also include the
Prime Bank manages its capital position proactively in order to
introduction of Capital Conservation Buffer of 2.5% which will
meet stringent Basel III capital requirements, expectations from
be phase-in from 1 January 2016 to 1 January 2019.
2015
2016
2017
2018
2019
4.50%
4.50%
4.50%
4.50%
4.50%
0
0.625%
1.25%
1.875%
2.50%
Minimum CET1 plus Capital Conservation Buffer
4. 5%
5.125%
5.75%
6.3375%
7.00%
Minimum Tier 1 Capital Ratio
5.50%
5.50%
6.00%
6.00%
6.00%
Minimum Total Capital Ratio
10.00%
10.00%
10.00%
10.00%
10.00%
Minimum Total Capital plus Capital Conservation Buffer
10.00%
10.625%
11.25%
11.875%
12.50%
Minimum Common Equity Tier 1 Capital Ratio Capital Conservation Buffer
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CAPITAL ADEQUACY RATIO
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
STATEMENT OF NON-PERFORMING LOAN (NPL) MANAGEMENT The overall banking sector got impacted by certain factors:
and all collection activities should be recorded to facilitate
excess liquidity, very high NPL in Banks, probability of re-
continuous monitoring and follow-up as well as control of
classification of loans earlier rescheduled taking the temporary flexibility from regulators, and slower demand for credit from
client compliance with negotiated agreements.
private sectors. Moreover, credit performance of few large commodity traders and importers continues to put pressure
Key Priorities
on NPL as well as profitability of banking sectors. Establishing
In order to achieve the general goal, Prime Bank has identified
or maintaining good governance, managing NPL including collecting bad loans and increasing profitability were major challenges for 2015 since recovery from rescheduled loans was not encouraging. Major industrial sectors did not perform in line with expectations mainly due to infrastructural bottlenecks.
several key areas and decided to make improvements in regulatory framework, capacity building and implementation of laws: - Structural development of the Division all through the year; - Enhancing banks’ capacity & strategy to deal with NPLs;
From the micro-prudential perspective, it is in the Prime Banks’ interest to reduce the amount and number of NPLs, as it protects their solvency and liquidity, which is ultimately aimed at protecting our clients’ interests. At the same time, resolving the issue of NPLs has a macro-prudential dimension as well, considering that the high rate of NPLs can pose a systemic risk. Systemic risk can occur if the aggregate lending activity is lower than it would be if the NPL ratio was not that high. The evidence shows that the level of NPLs is the indication of problems faced by a country’s economy and its real sector, which is not capable to repay its debt, but it can also be a sign of a poor economic scenario. Non-Performing Loan (NPL) is a debt obligation where the borrower has not paid previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The non-performing assets are therefore not yielding any income to the lender in the form of principal and interest payments. Therefore, managing Non-Performing Loan (NPL) to keep it at the lowest possible level is at the core of our business priorities. We have embedded the essence of asset quality in our business values, therefore, instituted the best local as well as international industry practices throughout our business processes. Prime Bank has a Recovery Division, dedicated for management, settlement and recovery of problem credits. Major responsibility of this Division is to formulate strategy and
- Enabling business processes & structures to facilitate NPL Management; - Improving and promoting out-of-court debt settlement; - Improving in-court debt resolution.
Enhanced Banks’ Capacity to deal with NPLs Furthermore, banks are required to establish efficient monitoring of lending, including the system of early warning for increased credit risk, which enables timely identification of debtors with whom this increase occurred and which includes the definition of qualitative and quantitative indicators for early observance of increased credit risk. NPL management is one of the topmost priorities of Prime Bank. At Prime Bank, monitoring starts from the very beginning of the business process. The steps of NPL Management work flow are as follows:
Prime Bank has promulgated self-credit policies in line with best practices which are guiding business relationship teams to involve their best business efforts towards quality business through systematic management of any potential risk for being highly judicious in selecting borrowers.
Relationship Managers are preparing loan proposals without any interference of any third party, top management of the Bank or the client. Our Credit Risk
action plans for minimization of risk, prevention of credit losses, maximization of recoveries, and rescheduling, recovery, and/or pursuing legal actions. The collection process of Prime Bank Ltd. is defined as the set of coordinated, appropriate, and timely activities aimed at full collection of loans from clients. The process is intended to convert the receivables into liquid assets as quickly and efficiently as possible, while at the same time maintaining the goodwill of the client in case of future transactions. As such, the collection process requires significant interaction with the client, beginning with a careful analysis of the client’s situation and continuing through timely and frequent contact over the duration of the loan. Clients should be offered payment alternatives that are timely and appropriate to each situation,
Management Team independently reviews the credit proposals, approves, recommends for onward approval where the potential risks are being screened of ensuring adequate protection against any latent NPL.
The credit proposals are also being reviewed by the Head Office Credit Review Committee consisting top officials from different Divisions who also put into a wide variety of inputs from different aspects ensuring the least possibility of NPL.
Even after approval of credit facilities, the postapproval activities like credit facility documentations
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and executions are carried out by separate Division
since diversion of fund is one of the identified causes of loan
namely- Credit Administration Division and vetting of
default. So, it becomes of imperative need to keep a close watch
credit facility and collateral documentations are taken care of by separate division namely Legal Division
on the borrower’s business operations and the movement of its
which are independent in reporting line from business
Prime Bank has formulated well-structured NPL management
units to avoid conflict of interests.
strategy covering following areas:
Post
disbursement
activities
like
monitoring,
process, keeping in mind “Prevention is better than cure”.
and overdue status, reminders through SMS, e-mails,
Action plan for potential NPLs.
Identification of highly risk sensitive borrowers in the credit portfolio.
Identification of geographical area-wise risk sensitivity.
Targeting high value end NPL accounts (having exposure of Tk. 1.00 crore and above).
Prompt action on credit reports.
For managing NPL cases arising out even after all the above mentioned efforts, dedicated teams are in place to directly monitor, put into action and intensify recovery and collection drives through internal recovery officers and third party recovery agents, where necessary. Litigation Unit of Legal Division is well organized with the assistance of internal law officers and leading law firms of the country to ensure all out legal actions for collection of Bank’s dues.
Capacity building of Recovery related RMs.
Goals of monitoring and follow up.
To ensure that funds are utilized for the purpose for which they were sanctioned. To see that the terms and conditions are complied with.
To monitor the project implementation for avoiding time lag and consequential cost over runs.
To evaluate the performance in terms of production, sales, profits on a periodic basis for ensuring that the borrower is keeping to the original plan and is having sufficient profits to service the debts as well as for the sake of maintaining normal business momentum.
To assess the impact of negative externalities on the performance of the company.
To detect the symptom of sickness at the early stage for initiating measures at the opportune moment.
Risk Management Division, Credit Risk Management Division and Audit & Inspection Division are consistently reviewing and monitoring the implementation and execution of policies, procedures, systems; blowing whistles where necessary; updating with approval of competent authority with various stake-holding Divisions. Top Management of the Bank is very vigilant to monitor and review all the relevant aspects; provides necessary directions and guidance time to time; to ensure asset quality maintaining the NPL Ratio towards its desired goals outperforming the industry ratio. On top of all, there are several Recovery Task Forces which periodically monitors and reviews the NPL movements and performance of the management in arresting NPL; provides necessary directions and guidance, thereby ensures highest quality asset portfolio and maximize business and profitability growth.
Under the present overall socio economic dynamics, Prime Bank has prioritized to extend purpose-oriented credit facilities with required security/collateral support as their policy priority
156
visits etc. with the clients are consistently carried out by the respective Divisions which facilitate managing NPL at the lowest possible level.
letters, telecommunications, meetings, discussions,
No compromise with due diligence in the sanctioning
Risk Management Division. Recovery, regularization, rescheduling from non-performing assets activities thrives for protection against NPLs. Regular due date
supervision, early alerts etc. are performed by Credit
are initiated by Recovery Division which continuously
financial indicators in an empirical manner.
Prime Bank believes that its intense recovery strategies and innovative approaches will lead to a transition in aspired higher growth trajectory. During the year 2015, the NPL Ratio of the Bank slightly increased to 7.82% from previous year’s 7.61%. The absolute figures show the increase in classified portfolio from BDT 11,214.64 million in 2014 to BDT 11,882.80 million in 2015. The deterioration has occurred under stressed situation in the economy. Special efforts are being made by forming various Recovery Task Forces during the course of the year, which were further intensified during the last quarter of the year and it helped to reduce the impact of the stressful economy on NPL to a moderate extent comparing to the industry.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
C o r p o ra t e G ove r n a n c e
Movement of NPLs: The movement in NPL accounts during the years 2015 & 2014 has been depicted in the following table: Amount in Taka (Million)
Particulars
2015
2014
Opening Balance
11,214.64
7,814.50
Add: Addition NPL during the period
12,988.55
11,939.86
Less: NPL recovered during the period
(2,757.89)
(2,209.31)
Less: NPL declassified/regularized as performing during the period
(7,214.21)
(3,648.76)
Less: NPL written-off during the period
(2,348.29)
(2,681.65)
Closing Balance (NPL)
11,882.80
11,214.64
Written-offs: During the years 2015 & 2014, the movement of written-off accounts is as under: Amount in Taka (Million)
Particulars
2015
2014
Opening Balance
7,848.48
5,193.17
Add: Addition during the year
2,348.29
2,681.65
(97.91)
(26.34)
10,098.86
7,848.48
Less: Collection during the year Closing Balance
Sector-wise NPL Status: Following Table shows sector-wise exposure vis-Ă -vis sector-wise NPL of Prime Bank Ltd.: Amount in Million Tk. Year-2015 Sl. No.
Sector
Year-2014
Sector-wise Sector-wise Sector-wise Total Total Total NPL in % NPL in % NPL in % Loans and Classified Classified of Total of Total of Total Advances Loans Loans Portfolio Portfolio Portfolio
1
Agriculture
1,968.40
15.20
0.77%
2,032.90
186.80
9.19%
15,626.70
2,309.20
14.78%
16,171.40
1,877.20
11.61%
2
Industrial (other than Working Capital): (a) Large & Medium Ind. (b) Small & Cottage Ind.
559.80
175.80
31.40%
446.00
197.30
44.24%
Working Capital: (a) Large & Medium Ind.
20,654.60
163.40
0.79%
15,429.00
196.20
1.27%
(b) Small & Cottage Ind.
1,444.50
138.20
9.57%
1,737.70
179.30
10.32%
Export Credit
5,731.40
13.10
0.23%
2,081.00
24.80
1.19%
Import Credit
12,295.80
872.70
7.10%
5,767.10
-
-
(a) LTR
4,222.60
94.60
2.24%
9,005.10
236.50
2.63%
6
Commercial Loans
12,613.70
1,718.90
13.63%
11,699.70
1,292.90
11.05%
7
RMG& Textile
10,200.90
1,278.40
12.53%
23,100.60
723.10
3.13%
8
Ship Building & Ship Breaking
1,915.80
-
-
2,873.60
58.90
2.05%
7,774.20
2,078.10
26.73%
10,039.20
1,546.30
15.40%
9
Construction: (a) Housing
13,060.20
364.00
2.79%
10,807.40
876.80
8.11%
3,123.30
172.40
5.52%
5,641.20
286.90
5.09%
3 4 5
(b) Other than Housing 10
Transport & Communication
11
Consumer Credit
13,843.90
1,399.90
10.11%
14,701.10
1,237.60
8.42%
12
Other Loans
26,828.73
1,088.90
4.06%
15,833.65
2,294.04
14.49%
151,864.53
11,882.80
7.82%
147,366.65 11,214.64
7.61%
Total
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158
In order to arrest NPL, our focus was not only on reducing
the year 2015 in comparison with 2014. On the other hand,
NPL portfolio, but also avoiding further NPL. In line with
in order to check any further significant NPL, we have
that, we have strengthened our recovery and monitoring drives, deployed external sources where found suitable,
extensively reorganized our Division and enhanced in-house lawyers incorporating leading law firms and re-engineered
strengthened our legal team, thereby intensified recovery
business and operational processes putting into a strong
initiatives which brought in defaulting clients under
risk management framework in place which are expected to
negotiation and thereby sizable recovery was possible in
result improvement in the year 2016.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
OTHER INFORMATION
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O t h er I n fo r m a t i o n
03
AWARDS AND RECOGNITION
ICAB National Awards for Best Published Accounts and Reports 2002 – Diamond (Financial Sector)
ICAB National Awards 2003 for Best Published Accounts and Reports– 2nd Prize in Financial Sector (Banking)
Financial News Services (FNS) Award 2005 – Best Performing Local Bank
Financial Institution Award - 10 years of Service
Published Accounts and Reports 2006 – 1st Prize in Financial Sector (Banking)
8th ICAB National Awards for Best Published Accounts and Reports 2007 – 1st Prize in Financial Sector: Banking
SAFA Best Presented Accounts Awards 2007 – Bronze Award (Banking Sector)
ICMAB National Best Corporate Award 2007 – 2nd Position in Local Banks
6th ICAB National Awards 2005 for Best Published Accounts and Reports– 1st Prize in Financial Sector (Banking)
7th ICAB National Awards for Best
160
PRIME BANK A N N UA L R E P O RT 2 0 1 5
9th ICAB National Awards for Best Published Accounts and Reports 2008 – 1st Prize in Financial SectorBanking
Othe r I nformation
SAFA Best Presented Accounts Awards 2008 – Joint Winner (Under
10th ICAB National Awards for Best Published Accounts and Reports
Banking Financial Sector)
2009- Winner (Category: Corporate Governance Disclosures)
10th ICAB National Awards for Best Published Accounts and Reports 2009- First (Category: Banking Sector)
SAFA Best Presented Accounts Award 2009 – Overall Winner
SAFA Best Presented Accounts and Corporate Governance Disclosures Awards 2009 –Winner in Banking Sector Subject to Prudential Supervision
ICMAB Best Corporate Performance Award 2009 – 1st Position (Jointly)
11th ICAB National Awards for Best Published Accounts and Reports 2010 – 1st Prize in Financial Sector: Banking
SAFA Best Presented Accounts Awards 2010 – Winner - Joint (Banking Sector)
161
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
162
SAFA Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures 2011 – Winner in Private Sector Banks (including Cooperative Banks)
ICMAB Best Corporate Award 2010
Bangladesh Business Awards 2011 –
– 1st Prize
DHL – The Daily Star
SAFA Best Presented Annual Report Awards and SAARC Anniversary Award for Corporate Governance Disclosures 2011 – Overall 1st Runner Up
12th ICAB National Awards for Best Published Accounts and Reports 2011 – 1st Position in Private Sector Banks
International Star for Leader in Quality (ISLQ) Award, France
13th ICAB National Awards for Best Presented Annual Report 2012 – 2nd Prize in Private Sector Banks (including Co-operative Banks)
13th ICAB National Awards for Best Presented Annual Report 2012 – 3rd Prize in SAARC Anniversary Award for Corporate Governance
ICMAB Best Corporate Award 2012 – 1st Position in Private Commercial Banks (Traditional Operation)
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
SAFA Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures 2012 – Runner-Up in Private Sector Banks (including Cooperative Banks)
SAFA Best Presented Annual Report Awards and SAARC Anniversary Award for Corporate Governance Disclosures 2012 – Certificate of Merit for Corporate Governance
Industry Best Rated Bank Award 2012 – Awarded as Strongest Bank
The Bizz 2012 – Inspirational Company Award
International Platinum Star for Quality Award 2012
14th ICAB National Awards for Best Presented Annual Report 2013 – 3rd Prize Corporate Governance Disclosure
14th ICAB National Awards for Best Presented Annual Report 2013 – 1st Prize in Private Sector Banks (including Co-operative Banks)
SAFA SAARC Anniversary Awards for Corporate Governance Disclosures 2013 – Winner
The Industry 2012 – Best Rated Bank Award
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O t h er I n fo r m a t i o n
164
SAFA Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures 2013 – 2nd Runner up in Private Sector Banks (including Cooperative Banks)
ICMAB Best Corporate Award 2013
Best Bank of Bangladesh by Global
– 1st Position in Private Commercial
Survey (Best Emerging Market Bank
Banks (Traditional Operation)
in Asia) – 2013
15th ICAB National Awards for Best Presented Annual Report 2014 – Certificate of Merit
SAFA Best Presented Accounts Award – 3rd Position
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
MEDIA HIGHLIGHTS 14 wW‡m¤^i, 2015
April 29, 2015
A‡±vei 11, 2015
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‡deªæqvixx 03, 2015
cÖvBg e¨vsK m¤úªwZ XvKvq BDGmGB‡Wi (BDbvB‡UW †÷Um G‡RwÝ di B›Uvib¨vkbvj †Wfjc‡g›U) m‡½ AviGgwR †iwgwW‡qkb dvBb¨v‡Ýi j‡¶¨ Õwi¯‹ †kqvwis M¨vivw›UÕ kxl©K GKwU Pzw³ ¯^v¶i K‡i| cÖvBg e¨vs‡Ki e¨e¯’vcbv cwiPvjK Avn‡g` Kvgvj Lvb †PŠayix I BDGmGB‡Wi evsjv‡`k wgkb wW‡i±i Rvwbbv Rvi Ò‡Rjw¯‹ wbR wbR cÖwZôv‡bi c‡¶ Pzw³ ¯^v¶i K‡ib| Abyôv‡b Av¨vjv‡qÝ di evsjv‡`k IqvK©vm© ‡mdwUi e¨e¯’vcbv cwiPvjK †gRevn iweb, BDGmGB‡Wi ‡Wfjc‡g›U ‡μwWU A_wiwUi Bb‡fm‡g›U Awdmvi wcU Mw_qvi Ges cÖvBg e¨vs‡Ki B›Uvib¨vkbvj wefv‡Mi Gmwfwc nvmvbyj Rv‡n` Dcw¯’Z wQ‡jb|
Prime Bank was awarded for contributing in remittance in a program titled “Investment, Remittance & Financial Branding” organized by the Centre for Non-Resident Bangladeshis (NRB) at a Hotel in the Capital on 25th April. In presence of HT Imam, Gowhar Rizvi, Advisors of Prime Minister, Dr. Atiur Rahman, Governor, Bangladesh Bank on behalf of Centre for NRBs handed over the award to Ahmed Kamal Khan Chowdhury, Managing Director of Prime Bank Limited. Chairman of NRBs S.M Shekil Chowdhury was also present in the program.
October 19, 2015
Prime Bank has recently arranged an “SME Conference” on October 17, 2015 at a local hotel in Dhaka. Azam J Chowdhury, the Honorable Chairman of the Board of Directors of the Bank graced the occasion as the Chief Guest. Md. Tabarak Hossain Bhuiyan, Deputy Managing Director of the Bank presided over the conference. Ahmed Kamal Khan Chowdhury, Managing Director; Md. Golam Rabbani, Deputy Managing Director; and other DMDs, were present. All Branch Managers attended the conference.
Rvbyqvix 12, 2015
June 01, 2015 AvMó 25, 2012
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10 wW‡m¤^i, 2015
cÖvBg e¨vs†Ki 162Zg GwUGg ey_ óvi wmivwgKm d¨v±wi nweM‡Ä D‡Øvab cÖvBg e¨vsK wjwg‡UW Gi Dce¨e¯’vcbv cwiPvjK ‡gv: †ZŠwn`yj Avjg Lvb m¤úªwZ e¨vs‡Ki 162Zg GwUGg ey_ nweM‡Äi óvi wmivwgKm KviLvbv cÖv½‡b D‡Øvab K‡ib| Avbyôv‡b we‡kl AwZw_ wn‡m‡e Dcw¯’Z wQ‡jb óvi wmivwgK‡mi wdb¨vÝ K‡›Uªvjvi, ARq Kzgvi | Gmgq e¨vs‡Ki DIiv kvLvi e¨e¯’vcK, Gmwfwc †gv: mvjvDwÏb Avn‡g` Ges GwWwm wWwfk‡bi cÖavb, wfwc †gv: †iRvDj nK mn Dfq cÖwZôv‡bi DaŸ©Zb Kg©KZ©vMY Dcw¯’Z wQ‡jb|
Bangladesh Bank Governor Dr. Atiur Rahman handed over a check of Prime Bank Limited, Cox’s Bazar Branch amounting BDT 10.00 lac as term loan to a New Women Entrepreneur in a conference of “SME Women Entrepreneur -Banker Exchange of Views and Open Credit Disbursement Program” held at Cox’s Bazar recently. On behalf of Prime Bank Limited, Kazi Mahmood Karim, Head of SME Banking Division and Kashfia Nehereen, Head of Women Entrepreneur Development Unit were seen in the picture.
cÖvBg e¨vs‡Ki wek¦ BR‡Zgv ¯’‡j cÖv_wgK wPwKrmv †mev cÖ`vb cÖvBg e¨vsK wjwg‡UW Ôwek¦ BR‡ZgvÕ ¯’‡j ÒcÖv_wgK wPwKrmv ‡mev K¨v¤úÓ Pvjy K‡i‡Q| wPwKrmv K¨v¤úwU D‡Øvab K‡ib cÖvBg e¨vs‡Ki e¨e¯’vcbv cwiPvjK Avn‡g` Kvgvj Lvb †PŠayix| Gmgq e¨vs‡Ki Dce¨e¯’vcbv cwiPvjK nvweeyi ingvb, BmjvwgK e¨vswKs wWwfk‡bi cÖavb Bwfwc Avey Rvdi †gvt mvBLyj Bmjvg Ges U½x kvLvi cÖavb GmGwfwc ‡gv: bRiÒj Bmjvg Dcw¯’Z wQ‡jb |
31 October, 2015
cÖavbgš¿xi ÎvY Znwe‡j cÖvBg e¨vs‡Ki Aby`vb cÖvBg e¨vsK wjwg‡UW ‡`‡ki `yt¯’ I kxZvZ©‡`i gv‡S kxZe¯¿ weZi‡Yi Rb¨ 9 wW‡m¤^i cÖavbgš¿xi ÎvY I Kj¨vY Znwe‡j Aby`v‡bi †PK cª`vb K‡i‡Q| MYfe‡b Av‡qvwRZ GK Abyôv‡b cÖvBg e¨vsK Gi c¶ †_‡K e¨vs‡Ki wi¯‹ g¨v‡bR‡g›U KwgwUi †Pqvicvm©b, bvwmg Av‡bvqvi †nv‡mb cÖavbgš¿x ‡kL nvwmbvi nv‡Z Aby`v‡bi †PK Zz‡j †`b| Ggmq e¨vs‡Ki e¨e¯’vcbv cwiPvjK Avn‡g` Kvgvj Lvb †PŠayix Dcw¯’Z wQ‡jb|
‡g 27, 2015
October 04, 2015
cÖvBg e¨vsK eª¨vK ‡K 200 ‡KvwU UvKvi K…wl FY cÖ`vb Ki‡e Managing Director of Prime Bank Limited Ahmed Kamal Khan Chowdhury inaugurated it’s 163rd ATM Booth at Royal Tulip Sea Pearl Beach Resort in Cox’s Bazar recently. Managing Director of Royal Tulip Sea Pearl Beach Resort Aminul Haque Shamim, Director of Prime Bank Limited Mafiz Ahmed Bhuiyan, DMD’s of Prime Bank Limited Md. Golam Rabbani & Md. Touhidul Alam Khan, COO of East Coast Distribution Ltd. Md. Masudur Rahim and other high officials were also present on the occasion.
cÖvBg e¨vsK wjwg‡UW K…lK‡`i dmj Drcv`b, nuvm-gyiMx Pvl Ges grm¨ Pv‡l 200 ‡KvwU UvKvi K…wl FY cÖ`v‡bi Rb¨ 24 †g eª¨vKÕGi mv‡_ GKwU Pzw³ ¯^v¶i K‡i| cÖvBg e¨vs‡Ki e¨e¯’vcbv cwiPvjK I wmBI Avn‡g` Kvgvj Lvb †PŠayix Ges eª¨vK Ges eª¨vK B›Uvib¨vkbvjÕGi wmGdI Gm Gb ‰KvBix wbR wbR cÖwZôv‡bi c‡¶ Pzw³ ¯^v¶i K‡ib| Pzw³ ¯^v¶i Abyôv‡b cÖvBg e¨vs‡Ki Dce¨e¯’vcbv cwiPvjK I Pxd Acv‡iwUs Awdmvi †gv: †Mvjvg ieŸvbx, Dce¨e¯’vcbv cwiPvjK I Pxd weR‡bm Awdmvi †gv: †ZŠwn`yj Avjg Lvb, ¸jkvb kvLvi cÖavb Bwfwc †gv: Igi Kwei Ges eª¨vKÕ Gi dvBb¨vÝ cÖavb †gv: Avãym mvËvi miKvi GdwmGgG, GwmG mn Dfq cÖwZôv‡bi mswkó Kg©KZ©vMY Dcw¯’Z wQ‡jb|
An Award Giving Ceremony of Prime Bank Foundation was organised on 31st October at the Krishibid Institution Bangladesh (KIB) Auditorium, Dhaka to handover the stipends of its ‘Education Support Programmme’. Dr. Atiur Rahman, Governor, Bangladesh Bank was the Chief Guest while Professor M.Q.K Talukder, renowned educationalist, was also present at the programme as the Special Guest. Azam J Chowdhury, Chairman, Prime Bank Limited presided over the ceremony. Md. Nader Khan, Chairman, Prime Bank Foundation delivered the welcome address and Nazma Haque, Director, Board of Directors, Prime Bank delivered the closing remarks and thanks. Also present among others were Chairman of the Audit Committee of Prime Bank Dr. Shamsuddin Ahmad, Directors-Nasim Anwar Hossain, Marina Yasmin Chowdhury and Md. Shahadat Hossain. Dr. Iqbal Anwar, Chief Executive Officer of Prime Bank Foundation explained the stipend distribution process and overall activities of the Foundation.
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PRODUCT & SERVICES
CONVENTIONAL BANKING
My First Account (School Banking) My First Account is a Savings Deposit account that can be opened by only endearing Bangladeshi student having an age 6 years to below 18 years. This account will offer the account
Current Account
holders a unique opportunity to save from an early stage of life
Current Account is designed to facilitate business persons. Taka can be freely deposited and withdrawn. At the time of opening, this account is also accompanied by a Special Notice
to ensure better education and other financial needs in future.
Deposit (SND) account. The account has cheque-book facility, safe deposit locker facility, and foreign remittance, transfer of fund from one branch to another by demand draft, mail transfer, and telegraphic transfer. It also offers transfer of fund on standing instruction arrangement, collection of cheques
applicable for “My First Account” (except Government fees as
through clearing house, online banking service and Prime Bank Branded ATM card
It has all the features of Savings Account. Minimum BDT 100.00 will be required to open this account. No fees and charges are applicable by NBR time to time).
Shukonna’ (Female SB Account) Shukonna is a special type of Savings Deposit Account for women. This type of account can be opened by any women 18 years of age and above. This account will earn interest on
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Savings Account
daily balance basis and interest will be credited at the end of
It is an account for any Bangladeshi national with an age of 18 years or above. The account consists of Cheque-book facility, safe deposit locker facility, utility payment service, collect foreign remittance, transfer of fund from one branch to another by demand draft, mail transfer and telegraphic transfer, ATM card etc.
the month. The product has daily basis interest of 4.50% per annum on daily balance; interest will be created after end of the month. 50% concession on account service charge, 50% concession on processing fees on marriage loan and special reward for the account holder on International Women Day. Account holders will enjoy
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
Short Notice Deposit (SND)
Fixed Deposits (1/3/6/12 months)
Short Notice Deposit is an interest bearing deposit account, for
Fixed deposit is a term product where customer is paid interest
a short period of time usually 7 days to 30 days.SND includes
based on time of the investment. It starts from one (1) month
personalized MICR Cheque, nominal service charge, branch banking facility (cash withdrawal and deposit from any branch).
to 1 year and above. The interest ranges from 2.5%-5.50% depending on the tenure of the investment.
The revised rate of interest varies from 2.5% to 4.5%.
DEPOSIT SCHEMES a. Single-Installment Based Double Benefit Deposit Scheme In this scheme the initial amount becomes double within a period. Currently, the product matures within 10 years at an interest rate of 7.23%. Besides, depositor can take loan against this deposit. The scheme is not applicable for corporate customers.
b. Monthly-Installment Based House Building Deposit Scheme The terminal benefit of this scheme is BDT 10 Lac and monthly installment varies according to tenure. The tenure of the scheme is 5/7/10 years. The interest ranges from 7-8%. Laksmapuron Savings Scheme This is a deposit scheme where the customer gets his or her targeted investment based on monthly installment size. The minimum desired amount is BDT 50,000 and interest is 7%. Lakhopati Deposit Scheme
Monthly Benefit Deposit Scheme This is a Deposit Scheme where the depositor gets a fixed amount of profit every month without disturbance of the principal. The lower ceiling is BDT 1 Lac Account 150% Deposit Scheme Deposit will be estimated 1.5 times of the initial deposit. The tenure of the investment period will be 6 years. Minimum deposit amount BDT. 10,000.00. Education Savings Scheme The scheme can be opened for 5,7,10 years with an initial amount of BDT 50,000 and it’s multiple. Brighter Tomorrow Brighter tomorrow can be opened by any My First Account holder (school banking account of Prime Bank). The deposit account can be opened for 12 months and can be renewed for next cycle/s. The interest is 6% and investment amount can be 25000 multiple and maximum 10 crore.
In this scheme the matured amount becomes BDT 1 Lac. The tenor of the Lakhopati Deposit Scheme will be 3/5/10/15 years. Prime Millionaire Scheme In this scheme the terminal benefit is BDT 10 Lac or millionaire based on the monthly installment sizes. The tenure is 5/7/10/12 years and interest ranges from 7%-8%. Contributory Savings Scheme (CSS) Contributory Savings Scheme (CSS) is a monthly based deposit scheme which matures after a certain period. The tenures under the scheme are 3/5/7/10/12/15 years. The interest ranges from 7%-8.5%. Nobagoto Account This is a monthly based deposit scheme for the infants or new born. The interest varies from 8% to 8.5%. The minimum monthly deposit is BDT 500.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
Mudaraba My First Account My First Account is a Savings Deposit Account that can be opened by only endearing Bangladeshi student having an age of 6 years to below 18 years. This account will offer the account holders a unique opportunity to save from an early stage of life to ensure better education and other financial needs in future. It has all the features of Savings Account. Minimum BDT 100.00 will be required to open this account. No fees and charges are applicable for “My First Account� (except Government fees as applicable by NBR from time to time).
Mudaraba Shukonna Deposit Account Shukonna is a special type of Savings Deposit Account for
Al-Wadeeah Current Account (AWCA) Al-Wadeeah Current Account is designed to facilitate business persons. Taka can be freely deposited and withdrawn. At the time of opening, this account is also accompanied by a Special Notice Deposit (SND) account. The account has cheque-book facility, safe deposit locker facility, and foreign remittance, transfer of fund from one branch to another by demand draft, mail transfer, and telegraphic transfer. It also offers transfer
Women. This type of account can be opened by any women of age 18 years and above. This account will earn profit on daily balance and profit will be credited at the end of the month. The product has daily basis provisional profit rate of 4.50% per annum on daily balance; profit will be credited at the end of the month. 50% concession on account service charge, 50% concession on processing fees on marriage loan and special reward for the account holder on International Women Day. Account holders will enjoy discount at selected Beauty Parlor/ Retail Chain Shop/Jewelry Shop/Restaurant.
of fund on standing instruction arrangement, Collection of cheques through Clearing House, Online banking service and
Mudaraba Special Notice Deposit (MSND)
Prime Bank Branded ATM card
Short Notice Deposit is a profit bearing deposit account, for a short period of time usually 7 days to 30 days. SND includes personalized MICR Cheque, Nominal service charge, any branch banking facility (cash withdrawal and deposit from any branch). The revised rate of profit varies from 2.5% to 4.5%.
Mudaraba Savings Account (MSA) It is an account for any Bangladeshi national with an age of 18 years and above. The account consists of Cheque-book facility, safe deposit locker facility, utility payment service, Collect foreign remittance, transfer of fund from one branch to another by demand draft, Mail transfer and telegraphic transfer, ATM Card etc.
Mudaraba Term Deposit Receipt (MTDR) Fixed deposit is a term product where customer is paid profit based on their time in the investment. It starts from one (1) month and 1 year and above. The profit ranges from 2.5%5.50% depending on the tenure of the investment.
a) Single-Installment Based Mudaraba Double Benefit Deposit Scheme (MDBDS) In this scheme the initial amount becomes double within the estimated period. Currently, the product matures within and estimated period of 10 years at a provisional profit rate of 7.23%. Besides, loan can be taken against this deposit. The scheme is not applicable for corporate customers. Mudaraba Monthly Benefit Deposit Scheme (MMBDS) This is a Deposit Scheme where the depositor gets an estimated mature amount every month without disturbance of the principal. The lower ceiling is BDT 1 Lac. Mudaraba 150% Deposit Scheme Deposit will be estimated 1.5 times of the initial deposit. The tenure of the investment period will be 6 years. Minimum deposit amount BDT. 10,000.00.
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Othe r I nformation
Mudaraba Education Savings Scheme (MESS)
Mudaraba Millionaire Deposit Scheme (MMDS)
The scheme can be opened for 5,7,10 years with an initial
In this scheme the terminal benefit is BDT 10 Lac or millionaire
amount of BDT 50,000 and it’s multiple.
based on the monthly installment sizes. The tenures 5/7/10/12 and provisional profit ranges from 7%-8%.
Mudaraba Brighter Tomorrow Deposit Scheme Brighter tomorrow can be opened by any My First Account holder (school banking account of Prime Bank). The deposit account can be opened for 12 months and can be renewed for next cycle/s. The provisional profit is 6% and investment amount can be 25000 multiple and maximum 10 crore.
Mudaraba Contributory Savings Scheme (MCSS) Contributory Savings Scheme (CSS) is a monthly based deposit scheme which matures after a certain period. The tenures under the scheme are 3/5/7/10/12/15 years. The provisional profit ranges from 7%-8.5%. Mudaraba Nobagoto Account
b) Monthly-Installment Based:
This is a monthly based deposit scheme for the infants or new born. The provisional profit varies from 8% to 8.5%. The
Mudaraba House Building Deposit Scheme (MHBDS) The terminal benefit of this scheme is BDT 10 Lac and monthly installment varies according to tenure. The tenure of the scheme is 5/7/10 years. The provisional profit ranges from 7-8%. Mudaraba Laksma Puron Savings Scheme (MLPSS) This is a deposit scheme where the customer gets his or her targeted investment based on monthly installment size. The minimum desired amount is BDT 50,000 and provisional profit rate is 7%. Mudaraba Lakhopati Deposit Scheme (MLDS) In this scheme the matured amount becomes BDT 1 Lac. The tenor of the Lakhopati Deposit Scheme will be 3/5/10/15 years.
minimum monthly deposit is BDT 500. Mudaraba Hajj Savings Scheme (MHSS) This is a deposit scheme for the pious Muslims who intend to go for Hajj. Different tenures and installment are there to realize the estimated matured amount. Mudaraba Cash Waqf Deposit Scheme This is a perpetual deposit scheme where provisional profit is 8%. The installment size is BDT 10,000 and it’s multiple. Profit under this scheme shall be playable to the respective sector/ institution/project /person determined by the Waqf on annual basis.
ATM/PROPRIETARY/PREPAID CARDS: Debit Cards To give the customer the benefit of withdrawing money from anywhere and anytime, prime bank offers the following credit card services under Debit Card:
Prime Bank Master Debit Card and Prime ATM Card
Credit Cards To offer wide range of customer purchase from different merchants, Prime Bank provides blend of credit cards fulfill the customers’ need.
Master Card Gold Credit Card
VISA Gold Credit Card
Master Card Silver Credit Card
VISA Classic Credit Card
International Credit Card
Platinum Credit Card
Hasanah Credit Card
JCB Credit Card
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Monarch is designed to manage the wealth and enrich the life of our premium clients with exceptional privileges. At Prime Bank, it is a symphony of banking benefits, unique investment products, personalized service and exclusive lifestyle benefits that bring complete harmony to all financial needs of our valued customers. As premium customers, Monarch clients get exclusive services with discount not only at Prime Bank but also at our partner organizations in home and abroad
NRB BANKING SERVICES
FUND TRANSFER
Foreign Remittance The foreign remittance service is provided to the customers to receive foreign currency services. The services under this are Web-based Instant Cash Remittance, TT Remittance, Wire Transfer Remittance (SWIFT) and DD Remittance.
Prime bank provides fund transfer through Inter-Branch Money Transfer, SWIFT, Issuing and enchasing foreign drafts, Bangladesh Electronic Fund Transfer (BEFTN) and Bangladesh Automated Cheque Processing System (BACPS)
Investment Bond for NRBs The services/products under Investment Bond for NRBs are Wage Earner’s Development Bond, US Dollar Investment Bond and US Dollar Premium Bond Account Facilities for NRBs The facilities for NRBs are Foreign Currency (FC) Account, Non-Resident Foreign Currency Deposit (NFCD) Account, Non-Resident Taka Account (NRTA), Non-Resident Investors Taka Account (NITA), Prime NFCD Account, and Resident Foreign Currency Deposit (RFCD) Account.
TREASURY SERVICES Forex & Fund Management/ Money Market Services include SPOT, Forward & SWAPS, Import/Export Financing, Call Money, Term Lending & Borrowing and Investment in Corporate Debenture and Bonds Primary Dealer Services include Treasury bill, Treasury Bonds, REPOs and Reverse REPOs
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OFF-SHORE BANKING SERVICES: Off shore banking services includes funded and Nonfunded facilities (EXP certifying, LC Opening, Advising, Export Negotiation, Export Bill Discounting, LTR Creation, Short Term Loan, OD for Working Capital, Guarantee etc.)
OTHER SERVICES ALTITUDE Internet Banking ALTITUDE is becoming popular among the Customers of PBL for its unique inter-intra bank financial services. Moreover, using ALTITUDE, customers can view the account details; pay utility bill, credit card bill of PBL and other Banks from anywhere, anytime. SMS Banking SMS Banking comprises SMS PUSH-PULL, Bulk SMS and Alert SMS Service. By PUSH-PULL services registered customer may receive their account balance, mini
PRIME BANK A N N UA L R E P O RT 2 0 1 5
statement, and currency exchange rate information at
Othe r I nformation
finance, securitization, and advisory services.
anytime from anywhere using their mobile handset. Lease Finance Phone Banking
Prime Bank provides one of the most convenient long
PBL Phone Banking Service provide various services to the
term sources of loans in the industry for acquiring capital
customers, such as, balance enquiry, activation/block debit
machinery, various equipments and vehicles under lease financing. It is a very popular scheme whereby a customer
card, available limit enquiry/total outstanding/minimum payable amount/last date of payment of Credit Card through IVR (Interactive Voice Response) system.
is given the opportunity to have an exclusive right to use an asset, usually for an agreed period of time, against payment of installments.
Prime Cash As a part of inclusion banking, Prime bank introduced “Prime
Retail Banking
Cash” service. It’s easy to use, unique and it’s the first ever in the country. Based on Biometric Smart Card, the service is highly secure and authenticates transaction matching cardholder thumb impression only. Utility Bills Pay Service Prime bank Utility Bills Pay service will enable customer to pay post-paid cell phone bills flexibly. Customer can avail the service at Prime Bank ATM booths or Information Kiosks round the clock Locker Services Prime Bank offers locker services of 3 sizes (Small, Medium and Large) to secure the customers’ most precious possessions. The service charge varies according to different sizes of the locker.
LOANS AND ADVANCES Corporate Banking General Credit Prime Bank provides the credit facilities to finance current
SwapnaNeer Home Loan SwapnaNeer Home Loan fulfills customer’s dream of building or purchasing home/apartment. Maximum 70% of the cost/price is financed for maximum of 25 years. Serviceholders, Businessmen, Landowners can avail this home loan at competitive interest rates. SwapnaShaj Home Loan SwapnaShaj Home Loan varies from the amount of Tk.5 Lac to Tk.1crore for maximum 15 years including grace period. Abash Home Loan Customer can make use of their vacant land which is just outside the Metropolitan Zone to build semi-pacca houses through Abash Home Loan. Loan amount can be of Tk.5 Lac to Tk. 30 Lac for maximum 10 years in addition to grace period. Car Loan Car Loan allows maximum of 50% of the vehicle price but loan ceiling up to Tk. 40 Lac for maximum 6 years at competitive rate processed within shortest time.
assets and loans to finance fixed assets in the form of Working Capital Finance, Capital Machinery Finance, and Real Estate Finance, Work order Financing/Construction Business, Import and Trade Finance etc.
Any Purpose (Personal) Loan
Export Finance To provide complete banking solutions to our exportoriented customers, we have a separate Export Finance Unit as well as AD branches and OBUs.
CNG Conversion Loan With the ‘CNG Conversion Loan’, customer can make carbon-fueled personal vehicle energy-efficient by converting it into CNG. Customer can take loan amount of Tk.50, 000/= to Tk. 1 Lac for maximum 02 years. Two personal guarantees are required for this loan facility.
• Project Loan: Prime Bank offers project loan to exportoriented customers for setting up new projects as well as for expansion and BMRE of existing projects. • Working Capital (WC): The mode of WC may be as mentioned here depending on the nature and requirement of the business: Back-to-Back L/C and EDF Facility, PC/ Overdraft, L/C & LTR, SOD (CI) etc. Structured Finance Our Structured Finance Unit deals with project financing and covers virtually every sector of the economy with a focus on infrastructure projects, project finance, acquisition
Customer can take loan amount of Tk.50, 000/= to Tk. 1,000,000 for maximum of 5 years. Early/full/partial settlement is allowed.
Doctor’s Loan Doctor’s loan is designed to support MBBS professionals for purchasing medical equipments as well as opening own chambers/expanding premises. Maximum tenure is 5 years while loan amount to be maximum 30% of the item costs. Marriage Loan ‘Marriage Loan’ varies from Tk.50, 000.00 to Tk. 3 Lac for maximum of 5 years. Eligible male or female singly or jointly can take this loan to meet their financial needs for marriage purpose.
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Travel Loan Provide ‘Travel Loan’ to the potential customers at easy
Auto Investment (Burak) Customer can buy a brand new/ reconditioned personal
terms and competitive rates. As loan, Tk.50, 000/= to Tk. 2
vehicle with our Shariah Compliance auto finance ‘Burak’.
Lac is allowable for maximum 05 years. Customer can enjoy flexible repayment schedule.
Investment amount is up to Tk. 20 Lac for maximum 06 years. Partial or early settlement facilities are allowed.
Household Durables Loan Household Durables Loan will enable customer to buy desired
Household Durables Investment (Asbab) Our ‘Asbab’ investment will enable you to buy your desired
home appliances/household durables at competitive rates
household products with competitive rates, convenient
with attractive features. Loans starting from Tk.50, 000.00 to Tk. 10 Lac for maximum 05 years.
features and simple procedures. Investment amount is up to Tk. 5 Lac for maximum 5 years. Income of spouse, parents and siblings if any are considered.
Education Loan For an educated nation, we are providing ‘Education Loan’ at competitive rates for the potential students. To meet up educational expenses, eligible borrowers can take loan up to Tk. 10 Lac for maximum of 5 years at easy terms. Hospitalization Loan Prime Bank provides Tk.50, 000.00 to Tk. 5 Lac for maximum 02 years for treatment purpose at convenient terms. Loan against Salary Prime Bank provides loan facilities of maximum of 14 times against salary at easy terms and competitive rates, minimal documentation with shortest processing time. Carnival Loan Provides this type of ‘Carnival Loan’ to meet up personal financial expenses for celebrating festivals. We provide loan up to Tk. 10 Lac for maximum 05 years at easy terms. Retail SOF (FO) This loan facility will enable you to serve your emergency requirement without en-cashing FDR/ DPS maintained with the Bank or other Banks/NBFIs. Customer can borrow maximum 90% of principal value of Prime Bank’s FDR and Deposit Schemes for 01 year renewable. Retail Secured EMI Against FDR/DPS you have with us or any other Financial Institutions, customer can avail ‘Retail Secured EMI’ at easy terms and convenient rates. Maximum loan amount is 90% of the principal value of the instrument and maximum tenure is 5 years. Islamic Banking Hasanah (Investments) Home Investment (Manjeel): Investment is given for up to Tk. 1 crore for maximum 25 years. Profit rates on a monthly/ quarterly reducing balance is applicable with 03-18 months grace period. This product is based upon the Shariah concept ‘Hire Purchase under Shirkatul Melk.
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Medical Investment (Shifa) Our ‘Shifa’ investment is designed to support medical graduates or physicians for establishment of chambers, clinics as well as procuring modern medical equipments. This easy and flexible financial instrument is based upon the Ijara concept. Investment amount is up to Tk. 10 Lac for maximum of 5 years. Quard-e-Hasana In Islamic Banking Branches of Prime Bank, this investment is offered against pledge of Term Deposit. Generally 80% of the Term Deposit is allowed to the holder for Halal activities without any profit. It is also called Quard against Term Deposit Receipt. A Quard is sanctioned for maximum of 1 year.
SME Banking Anchol (Women Entrepreneur’s Loan) Prime Bank’s ‘Anchol’ is the credit facility for the women entrepreneurs to expand and operate their businesses at desired level. Loan size is Tk 1 lac to Tk 50 lac while unsecured loan is upto Tk. 25.00 lac. Tenure is Maximum 12 months for continuous loan and maximum 60 months for term loan. Interest rate is only 10% p.a. ChaltiRin (Working Capital Loan) Our ‘Chalti Rin’ offers you loan facility to increase the working capital base by financing day- to-day business of your SME business. Loan size is Tk. 2 lac to Tk 50 lac for Small Enterprise (SE) customers and Tk. 2 lac to Tk 300 lac for Medium Enterprise (ME) customers. Tenure is Maximum 12 months for continuous loan and maximum 60 months for term loan. SampadRin (Capital Loan) Our ‘Sampad Rin’ offer you the loan facility to augment capital base for your business expansion, purchase/ expansion of business space and purchase of capital machineries, light or heavy vehicles for business use etc. Loan size is Tk. 2 lac to Tk 50 lac for Small Enterprise (SE)
PRIME BANK A N N UA L R E P O RT 2 0 1 5
customers and Tk. 2 lac to Tk 300 lac for Medium Enterprise
Othe r I nformation
Agriculture Banking
(ME) customers. Tenure is maximum 60 months and grace period may be allowed for maximum 6 months.
Abad (Crop Loan) To support farmers, croppers and landless farmers for
Prime Subidha
bearing the cost of tilling of land, fertilizers, pesticides,
Under this SME Loan product, the bank will finance in creditworthy business which are partially secured by
irrigation, seed etc. for producing different crops and vegetables, Prime Bank offers ‘Abad’ loan. Loan size is
financial obligation (FDR/Deposit Schemes) placed in Prime Bank under the name of business /owners/third-
up to Tk.3.00 lac and its tenure is maximum 6 months
party. Loan size is Tk. 2 lac to Tk 30 lac for Cottage, Micro and Small (CMS) Enterprise customers and Tk. 2 lac to Tk 40 lac for Medium Enterprise (ME) customers. Tenure is up to 5 years (Loan General)
cultivation)
Srijon Loan Our ‘Srijon Rin’ is designed to provide adequate credit assistance to the members of the “Bangladesh Gayan o Srijonsil Processor Samity’ or other creative publishers. Sole Proprietorship/ Partnership/ Private Limited Company will be eligible for this “Srijon Rin”. The loan size is minimum Tk.2.00 lac to maximum Tk.30.00 lac for Micro and Small Enterprise. Loan tenure will be maximum 9 months. Sahaj Rin (Collateral Free Loan) Sahaj Rin provides you an easy to access loan facility to successfully grow your small & medium enterprise business. Loan amount is Tk 2 lac to Tk 6 lac and its tenure is maximum 36 months.
(Maximum 12 months for financing on banana & mango
Khamar (Farm/Non-Crop Loan) Any justifiable capital expenses and/or working capital and Project finance in the areas of Fisheries, Hatchery, Poultry, Dairy, Bio-gas plant, Feed-mills, solar panel for farm can be availed from Prime Bank under Khamar Loan. Loan size is up to Tk. 1 crore. Tenure is maximum 1 year for Cash Credit (CC) and maximum 3 years for Term loan. Nabanno (for any Agri-purpose Loan) Under Nabanno, Prime Bank offers loan facility for any justifiable capital expenses and/or working capital and Project finance in the areas of farm machinery, nursery, weavers, flower cultivation, mushroom cultivation, Bio-gas plant, rural transport and many more. Loan size is up to Tk. 1 crore. Tenure is maximum 1 year for Cash Credit (CC) and maximum 5 years for Term.
Prodip Loan With the objective to extend financial support to SME under refinance or pre-finance scheme of Bangladesh Bank, this loan product is being offered to market. In case of new enterprise/project finance, the owner of the project will have to sufficient knowledge about the project or experienced employee/consultant will have to recruit. Loan size is minimum Tk.5 lac to maximum Tk.5 crore at attractive interest rates. Tenure is 1 year to maximum years 8 years including grace period.
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SUSTAINABILITY REPORT As a leading financial institution, we are committed to promoting positive social and economic development in the areas where we operate. Sustainability to us is not just about using less energy, or raising money for good causes, although we are proud of our efforts both. Sustainability is embedded in our brand promise, to be different from others, and it affects every single thing we do: the way we make decisions, the contribution we make to local economies and the impact that
Being a responsible company Our commitment to sustainability is about more than the economic activity we finance for our clients. It is also about how we develop our people and manage our business to create long-term value for our stakeholders and focus on our core values. Robust governance is the foundation for establishing trust and promoting engagement between a company and its stakeholders. We see governance as critical to our commitment
we have when we bank the people and companies driving investment, trade and the creation of wealth across the country.
to being a responsible company and continuously look for
Our ambition is to be a leading bank in the country. This means getting the basics right: being financially stable, continuously improving our governance and seizing the opportunities presented by our markets to provide and promote sustainable economic growth. Our approach continues to focus on two
People and values
key priorities: contributing to sustainable economic growth and being a responsible company.
ways to strengthen our approach.
As part of our approach, we continue to embed our culture and values throughout the Bank. We invest in our people through learning and development programmes with numerous employees receiving training in 2015. To further help our employees, in 2015, we started broad banding pay scale, which will motivate employees to work more aggressively for the bank.
Contributing to sustainable economic growth Whether it is helping businesses to grow, supporting people to buy their own homes or providing clients with a full range of products to facilitate global trade and investment, we use our core business of banking to fuel economic activity in our markets. In 2015, the Bank did quite a large amount of lending with a lot of clients. This funding enables businesses to diversify or expand and gives individuals the opportunity to invest and provide stability for future generations. By doing all of this responsibly and efficiently, we can have a positive effect on sustainable development in our markets, contributing to economic growth in the long term and enabling communities, businesses and people to thrive.
Access to financial services As a bank, we are committed to providing products and services to individuals and companies driving local, regional and global economic development and job creation. We support trade, infrastructure and other key sectors of the economy that create the foundation for long-term sustainable growth. We actively share our expertise with clients, regulators and communities to help deepen financial markets and strengthen the financial sector. The markets where we operate continue to undergo rapid change, creating new opportunities for economic growth. We are helping cities realize these opportunities by providing dedicated financial services to the local entrepreneurs and businesses that are leading innovation and employment generation. We are also focusing on our Islamic products and Green products as well, and expanding in all ways possible through these products. We provide financial products and tools to help our clients reach individuals who lack access to banking services as well. We are focusing on our clients that do not live in the cities and trying to give them as much banking services as possible.
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We respect human rights across our business. This includes our human resources policies and our procurement decisions as well. We consider human rights in our purchasing decisions, which address the rights of children, workers and communities in relation to specific industry-sector risks. Supporting the needs of our clients and delivering a highquality client experience is a priority across the business. We focus on treating clients fairly and work closely with them to deliver appropriate and suitable products.
Environment We seek to minimize the impact of our operations on the environment. In 2015, we rolled out Green Banking Policy guidelines to all employees on ways to become more environmental friendly. We remained on track to meet our respective committed targets for agriculture. Environmentally speaking, we did quite well with regards to activities and targets, and more detailed information can be found in the Green Banking Report.
Closing Remarks Through our economic success and competitive presence, we create value for our shareholders, our clients, our employees and society at large while upholding stringent environmental and social norms to support a sustainable future. Applying high standards of ethics and integrity, we strive to be a reliable partner to our stakeholders at all times. We also engage in open dialogue with the public in order to foster understanding on topics of mutual interest. To continuously improve our environmental performance, we seek to use resources efficiently and to utilize the most environmentally friendly technologies. We value the diversity of our employees. We support their talents and offer an attractive work environment
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that provides for the best possible work-life balance. We believe
talents to reach their full potential and by enabling communities
that our responsibility extends beyond our core business.
and economies to prosper. Employee engagement and public
Therefore, we invest in the societies in which we operate – and thus in our own future. We build social capital by supporting
advocacy maximize our impact. This is how we combine our performance culture with a culture of responsibility.
Our business model is focused on sustainable value creation We build deep relationships with our clients
We add value for our clients by using our distinctive strengths
• Retail Clients
• Brand – we have a long history in the current dynamic markets and our Bank with a difference brand promise to captures what we stand for • Capital – we are strongly capitalised and highly liquid, allowing us to support our clients for the long term • Local depth – we draw upon deep local knowledge and experience in the markets in which we operate • Network – we collaborate to support clients across our client segments and product group • People – our diverse and inclusive workforce is committed to the highest standards of conduct and integrity
– individuals and small businesses • Private Banking Clients – high net worth individuals • Commercial Clients – mid-sized companies • Corporate & Institutional Clients – large companies and financial institutions
And provide solutions that meet their evolving needs
We ensure that the value is sustainable by focusing on three key priorities
• Retail Products – deposits, savings, credit cards and personal loans, and other retail banking products • Wealth Management – investment, portfolio management, and advice and planning services • Transaction Banking – cash management, transactions, securities holdings and trade products • Corporate Finance – financing, strategic advice, and equity and principal financing.
• Being a responsible company
Through these activities, we generate income, profits and return on equity
And create long-term value for a broad range of stakeholders
• Income
• Clients – enabling individuals to grow and protect their wealth, and helping businesses to invest, trade and expand
– net interest income, fee income and trading income • Profits – income gained from providing our products and services minus expenses, impairment and taxes • Return on equity – profit generated relative to the equity invested
– managing our operations to deliver longterm value for our stakeholders • Contributing to sustainable economic growth – ensuring that our core business of banking supports sustainable growth and job creation • Investing in communities – working with the community to promote social and economic development
• Shareholders – delivering long-term sustainable value for investors • Employees – providing a great place to work • Society – supporting growth and job creation, delivering financial innovation and helping to address the most pressing challenges facing the community.
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PRIME BANK FOUNDATION CEO’s Message The term ‘Corporate Social Responsibility’ clearly emphasises the role that the corporate sector has started to play in the of the society. Along with other INGOs, NGOs and developmental organisations, the corporate sector of Bangladesh is gradually adopting the role of a developmental partner of the country through activities and projects which are aimed at a target population to ensure better and sustainable livelihoods. Corporate Social Responsibility (CSR) provides a unique opportunity for corporate citizens to contribute towards of the country, thereby the socio-economic emphasising the new role that commercial powerhouses are starting to adopt-that of change makers who undertake the resolution to resolve some major problems of the country. Prime Bank realised quite early its multiple responsibilities towards the society, this has in turn fuelled the bank’s determination to contribute through an effective leading role in serving the society. Prime Bank Foundation (PBF), being the CSR wing of Prime Bank, has a unique business philosophy which believes that “Sustainability for self and others, private and public interests are one and the same.” This means that PBF’s business activities must sustain not only for the Foundation’s own benefits, but also for the society and the nation. The idea behind this dogma represents the essence of our CSR, and has been carried on in the Foundation’s Mission Statement, which also includes: “We aim to constantly stay a step ahead in dealing with change, create new value, and contribute broadly to society and its .” Therefore, it will not be an understatement if I say that , whether at the local or national level, has always been a top priority of PBF. ’ is a slogan which ‘CSR contributes towards each and every long-term supply side financing project of PBF echoes; it is our main objective this year to portray to the readers exactly how we are practicing this slogan through this report. At Prime Bank Foundation, we are committed to helping exponentially more people improve their lives by having access to core services like education and healthcare, because we believe that accessible and affordable core services is foundational to breaking the cycle of poverty. In order to achieve this goal, a strong and dynamic organisation which follows an adaptive approach through effective programmes and service delivery is largely instrumental. The Foundation’s Mission Statement also emphasises the mission “To achieve prosperity and realise dreams through sound CSR activities.” For Prime Bank Foundation, CSR is nothing other than putting our Mission Statement into practice. That is, our CSR activities are planned and implemented as business strategies after considering what we should do and how we should do it as a Foundation to help solve social issues
Dr. Iqbal Anwar CEO, Prime Bank Foundation
through our CSR activities and contribute to economic and . social The challenges of the present era have created multidimensional hurdles for many-access to quality education, unemployment, poverty, and access to healthcare are only a few obstacles which people are faced with nowadays. At Prime Bank Foundation, we have learned that by putting our heads together in our prioritisation exercises and by working as a team, innovative solutions can be unearthed to address these problems. Once appropriate strategies are formulated, we can multiply our impact and uncover even greater opportunities. We foster diversity in our Foundation and help our beneficiaries thrive in their personal and family lives. Being socially and environmentally responsible is not only good for the people and the country; it is essential to the long-term sustainability of our business. The emerging responsibility that the corporate sector of the is echoed in the country has towards the national collaborations that PBF has recently entered into through MoUs with different corporations and development organisations. Such agreements clearly emphasise the growing significance of the services which the PBF projects provide as well as their standard. A few drops of water in a long, spiralling river may not make any difference-it may evaporate immediately, but a steady trickle, a continuous flow of effort fuelled by the determination of the country will definitely to contribute to the leave a lasting impact. The ripples of change that our initiatives
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have made are visible in this, our 9th report where we will portray
many people can invest their time and effort in activities which
some of the stories of change and renewed hope.
are self-rewarding like our projects. We have always believed
The part of my job that I love the most, is when I get to talk
that our projects are tailored to the needs of our priority target population, thereby creating opportunities for them to achieve
drastically in so many different ways because of the Foundation’s
their dreams and remove access barriers. This belief continues to drive us towards new initiatives and new targets so we can
programmes/projects designed to cater to their needs. I think
impact the lives of many people around the country.
about people like Imran Hossain, a recipient of the scholarship under ESP, whom I met. Coming from a poverty-stricken family,
If an organisation is considered as a clock then the members
with some of those beneficiaries whose lives have improved
his higher education while unemployed. It was difficult for his
of the organisation should be considered as the components of the clock. Each nut, bolt and spring has a specific purpose
family to arrange two square meals a day, far less support his
and objective which ensures smooth functioning. I am proud
studies. This Imran Hossain fought all odds and achieved 4.00 CGPA (out of 4), was honoured with the position of first class
to say that PBF is one such efficient clock where each staff of the Foundation and its projects has a facilitative role to play
first in his department in the University of Dhaka, and is now a lecturer at the Department of Finance, University of Dhaka. It is with great pride that I heard him say ‘if PBF had not provided me with the monthly stipend under the Education Support Programme, I would not be where I am today academically, professionally and socially.’
in our core objective to ensure that CSR contributes towards
he faced the burden of having to shoulder the responsibility of
Similar recognition of our efforts was echoed by Ms. Farida Akhter, a patient of Prime Bank Eye Hospital (PBEH) who had lost sight in both her eyes due to an unfortunate accident. Struggling as she was, to support her family of 3 by working as a maid, her life had come to a standstill after her accident. A simple operation at PBEH restored her eyesight and her livelihood. Her humble words, ‘Every time I pray, I thank PBEH and those behind PBEH for returning my lost eye-sight’ still ring in my ears. I recall a conversation I had with Ms. Khadiza Khatun, a graduate of the first batch of Prime Bank College of Nursing (PBCN) who has joined Zainul Haque Sikder Womens’ Medical College as a staff nurse. She proudly attributes her achievement in becoming an empowered woman and also a professional in a prestigious discipline to PBCN for providing quality nursing education and unique opportunities of learning. that give us It is such stories of advancement and a sense of pride and accomplishment in the job that we do. Not
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. I would like to take this opportunity to thank the Foundation Management Committee, its Executive Committee and Prime Bank Board of Directors, staff and partners for providing us with the support and encouragement to stay dedicated to our mission. Our priority target beneficiaries and communities have also been a powerful source of inspiration for my team and me. is created by We firmly believe that enduring collaborating with people and organisations that offer wisdom, challenge and leadership. At our core is a belief in the power of people to transform their communities and make a difference in the country, and with this belief, I give you, our 9th report.
Sincerely yours,
Dr. Iqbal Anwar Chief Executive Officer Prime Bank Foundation
PRIME BANK A N N UA L R E P O RT 2 0 1 5
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PBF Projects in Brief Over the past 9 years, Prime Bank Foundation (PBF) has played a pivotal role in the field of national
in the education
and health sector. PBF is a staunch believer of empowerment rather than aid and this belief is reflected clearly in the long term projects that PBF has undertaken over the years. Sustainable growth, rather than charity has been the core objective of all of PBF’s projects. The projects of PBF aim not only to make health and education more accessible to the target population but also to through its initiatives. A country’s depends largely on the well-being of its contribute to the national population as well as a strong educational backbone, and that is exactly what PBF strives to accomplish. PBF hopes to expand its sphere of influence through its initiatives and provide more opportunities of better health and education in order to ensure equal opportunities for the less privileged people of our society.
Over the past nine years, PBF has relentlessly pursued a range of activities with the sole purpose of benefitting its target people. Following are brief outlines of the projects of PBF which provide new options for many and make a significant contribution in improving the quality of life of the target population:
Education Support Programme (ESP) Countless underprivileged, yet meritorious students fail to pursue higher studies due to poverty, the ESP project is designed to support such students through a long term renewable scholarship programme. Over the last few years, the number of students who have become established and employed due to the ESP has been overwhelming. These students have gone on to support not only their families, but are also playing a role as change-makers in the overall development of the country.
ESP Prime Bank English Medium School (PBEMS) This English medium school provides quality English education at a minimum cost as well as a holistic syllabus which equips the students to tackle and comprehend the world. The overall aim of PBEMS is to help each child fully develop his/her intellectual, social, and imaginative capabilities and thereby become a lifelong learner, productive citizen, and fulfilled human being. The school’s popularity and demand has led to the existence of a total of two branches in Dhaka city.
Prime Bank College of Nursing (PBCN)
PBEMS
Considering the dire need of a large number of qualified nurses, PBCN began its journey in affiliation with a leading nursing institute of the Philippines. The modern equipment, IT facilities and qualified teachers all follow high standards which prepare the students to pursue a noble career. The very first batch of PBCN has graduated and many have already joined the nursing arena.
Prime Bank Eye Hospital (PBEH) Ophthalmic health is often ignored, but is integral for overall wellbeing. PBEH has a highly trained team of consultants and staff, as well as international standard equipments and operation theatres to provide excellent eyecare services at a minimum cost. PBEH also carries out screening camps, and free eye camps throughout the country, especially in remote areas to reach eye patients. The hospital has also adopted several awarenessraising campaigns to promote health-seeking behaviour.
PBCN
Other Activities Along with the ongoing projects, Prime Bank Foundation is actively involved in countless activities which are undertaken to respond to emergency needs of the country.
PBEH
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Education
selection criteria which are instrumental in identifying the
EDUCATION SUPPORT PROGRAMME (ESP)
most deserving candidates. The Advisory Committee consists of three distinguished personalities of Bangladesh, namely Prof. M. Q. K. Talukder, Chairman, Centre for Women and Child Health and Chairperson, Bangladesh Breast Feeding Foundation (Chairperson of the Advisory Committee), Prof. Jamilur Reza Choudhury, Educationalist, Vice Chancellor of Asia Pacific University, Former Vice Chancellor of BRAC University &
ducation is one of the tools for
most effective
it plays a
pivotal
Notre Dame University (Member of the Advisory Committee).
role in a country’s economic goal to alleviate poverty and
As a part of Prime Bank’s CSR activities ESP began its journey
ensure growth. This awareness that education is an essential
in 2007 with 170 awardees initially. Today, after 9 rewarding
component for human
years, we are proud to say that ESP has influenced the lives of a huge number of students across the country. In keeping the
and empowerment of a
nation is what helped PBF formulate its strategic goal to make education more accessible to the target population. Despite the general consensus associated with the importance of education, the young generation of Bangladesh, even today, faces a lot of access barriers. Poverty and financial hardships have been repeatedly identified as the most common reason for discontinuation of higher studies. Countless bright young minds have to be diverted to the daily concerns of earning a living and supporting their families, even though their academic backgrounds strongly support continuation of higher studies. According to Bangladesh Bureau of Educational Information and Statistics (BANBEIS), in 2012, 21.8% students of higher secondary students and 46.7% of madrasha students dropped out of school. Only a few of them (students) enroll for higher studies after completing HSC. Therefore, a considerable portion of the young generation is being deprived of higher education because of their circumstances. It is to be noted that as per Bangladesh Bank CSR guideline (GBCSRD circular No-7), the ESP/stipend programme under education is compulsory for every bank, and around thirty percent of the total CSR expenditure should be spent in the education sector, including scholarships/stipends for underprivileged but meritorious students of the country. Keeping this in mind, Prime Bank Foundation initiated the Education Support Programme (ESP) in 2007. ESP is a long term renewable scholarship programme for underprivileged but meritorious students from across the country. The main objective of the ESP is to remove access barriers which many economic hardship-hit deserving students face to achieve their desired level of education. Eligible students receive monthly stipends that allow them to pursue graduation and post-graduation level studies without being tied down by financial worries. Bangladesh has the seventh largest population in the world; it is needless to emphasise the immense role that such a huge man power can play in the economic, social and intellectual of the country. Although we all acknowledge that education alleviates poverty, the heavy shackles of poverty sometimes restrain many from freeing themselves through educational enlightenment. In order to ensure that the most deserving students are awarded the scholarship, PBF has a three member Advisory Committee which is commissioned to develop a neutral
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Professor of BUET (Member of the Advisory Committee) and Father Benjamin Costa, Educationalist & Vice Chancellor of
continuity of the past years’ selection process, the same steps of the previous years have been followed in 2015: applications were invited from potential poor but meritorious students through advertisements in the country’s leading national dailies. We received a total of 5,344 applications from 340 institutions. Then, as per the Advisory Committee’s cut off line, 685 students were primarily selected. After thorough Validation Exercises and all other relevant processes 372 students were finally selected for this year and the total number of PBF awardees stood at 2,445. The first installment of stipends for all the students selected in 2015 was disbursed to their individual accounts by Dr. Atiur Rahman,Honourable Governor, Bangladesh Bank, through Automation process in a formal Award Giving Ceremony held on October 31, 2015 at Krishibid Institution Bangladesh (KIB), Farmgate, Dhaka. Of the 2445 students, most have either completed or are still continuing their graduation and post-graduation level studies in the country’s public sector universities, medical colleges/ engineering/agriculture universities, national universities, madrasha, etc in a wide range of subjects covering the sciences, humanities and commerce. The ESP follows strict guidelines where gender equality is concerned; the female to male ratio of 3:7 must be maintained to ensure that a sufficient number of both genders receive assistance. With the help of the PBF stipend the first 4 batches of 2007, 2008, 2009 & 2010 successfully completed their studies and more than 488 awardees are now Doctors/Engineers/Class-1 officers/Civil Service & Custom officers/University & College Teachers/Bankers etc. All these established young people proudly proclaim the central role of the ESP in supporting their higher studies. Not only have they had the support to complete their education, they have also been able to embark on a lifechanging journey. Their thriving personal careers have played a vital role in the of their family, society & nation as well. Students from all 64 districts of the country are recipients of the PBF scholarship. It is therefore safe to say that our ESP has made a country-wide impact through its commendable initiative and is helping students build a strong foundation for their and their families’ future. These students are now an integral part of . Their contribution is not only affecting the national their personal lives but is also creating ripples nation wide.
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GgbwK †QvU †evb‡KI ¯‹y‡j fwZ© Kwi‡q w`‡q‡Q †m| †hLv‡b A‡b¨i `qvq GKwU Kuy‡o N‡i _vKZ AvR †mB Rvnv½xi gv-‡evb‡K wb‡q emevm Ki‡Q mymw¾Z evmvq, wK †bB †m evmvq! LvU, WvBwbs †Uwej meB Av‡Q GLb ‡mLv‡b| GgbB Avg~j cwieZ©b Zvi wb‡Ri, GgbwK cwiev‡ii| mgv‡Ri AmsL¨ nZ`wi`ª QvÎ-QvÎxi Kv‡Q Rvnv½xi GLb GKwU R¡jšÍ D`vniY Zvi KvQ †_‡K wewfbœ mn‡hvMxZv I civgk© wb‡”Q AmsL¨ gvbyl| Rvnv½xi wb‡RI evwo evwo wM‡q †jLvcovq DØy× Ki‡Q Amnvq Óevev-gvÓ i mšÍvb‡`i| Rvnv½xi Rvbvq,ÒAvgvi GB cwieZ©‡b cÖvBg e¨vsK dvD‡Ûk‡bi Ae`vb †h wK! Zv e‡j †kl Ki‡Z cvie bv, GB wkÿve„wË Avgv‡K/ Avgv‡`i cvwievwiK Rxeb‡K `vwi`ªZvi gZ Awfkvc †_‡K euvwP‡q‡Q, cwieZ©b K‡i w`‡q‡Q Avgv‡`i| Avwg cÖvY f‡i cÖvBg e¨vsK Gi Rb¨ †`vqv Kwi| GB wkÿve„wËi myd‡j A‡b‡KB AvR mgv‡R cÖwZwôZ Ges wbðqB ZvivI Avgvi gZ AvRxeb cÖvBg e¨vs‡Ki GB Ae`v‡bi K_v ¯§iY Ki‡e|Ó
Rvnv½xi GmGmwm‡Z fvj †iRvë Ki‡j Zv cwÎKvq cÖKvk cvq, †mB cwÎKvwU wb‡q Gfv‡eB gvby‡li Øv‡i Øv‡i wM‡q mvnvh¨ PvB‡Zb Zvi gv|
cÖvBg e¨vsK dvD‡Ûk‡bi e„wË †c‡q Avgvi D”P wk¶v Pvwj‡q hvIqvi Øvi cÖk¯’ n‡q‡Q, ‡jLvcovq cÖZ¨vwkZ mgq e¨q Ki‡Z 182
gvby‡li Øv‡i Øv‡i `vb-LqivZ PvIqv Rvnv½x‡ii gv, GLb †Q‡ji mdjZvi my‡Li Rxe‡b| †K‡U †M‡Q Zuvi mKj Avw_©K msKU
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
wek¦we`¨vj‡q cov‡jLv Kiv gviRv‡bi Rb¨ wQj ïayB GKwU w`ev ¯^cœ gviRv‡bi c~‡e©i Ae¯’vb:
cvwievwiK cwieZ©b:
`yB fvB GK †evb I evev gv mn 5 R‡bi msmvi, †bB GKwPj‡Z K…wl Rwg, emZNiwUI wQj cÖvq emev‡mi A‡hvM¨| gviRvb AZ¨šÍ †gavex nIqvq ¯‹z‡ji †eZb wd« K‡i w`‡qwQ‡jb wkÿKiv| wKš‘ C . } } ] . = " ? ' <E . n‡q‡Q Zvi evev gv‡K! `yB fvB wg‡j gvby‡li evwo‡Z evwo‡Z wM‡q ‡QvU †QvU †Q‡j‡g‡q‡`i cwo‡q ‡h mvgvb¨ UvKv †cZ, ZvB w`‡q `vwi`ªZvi weiæ‡× GKiKg hy× K‡i PjwQj 5 R‡bi GB msmviwU| ' H . #E ' * '
gvm †k‡l A‡bK UvKv gvqbv cvq gviRvb, bZzb Avw½‡K mvwR‡q‡Qb gviRvb‡`i cyivZb evwo|
gvm †M‡jB A‡bK UvKv cvq GLb gviRvb| PvKzwii eqm cÖvq `yB eQi, GiB g‡a¨ †mB fv½v NiwU‡K GLb GgbB cwicvwU K‡i w`‡q‡Q †m| n‡q‡Q N‡ii `iRv Rvbvjv, LvU-cvjs meB n‡q‡Q GLb| gviRv‡bi eo fvB wb‡Ri cov‡jLv GKiKg eÜ K‡i w`‡q gviRv‡bi †h‡Kvb iK‡gi mn‡hvMxZvq cv‡k †_‡K‡Q, ‡mB eo fvB‡qi eÜ n‡q hvIqv wkÿv Rxeb gviRv‡bi Avw_©K mnvqZvq Avevi ïiæ n‡q‡Q,hv wbtm‡›`‡n GK D¾j `„óvšÍ| gviRv‡bi ' <E = ; = . Avi nvo fv½v cwikÖg Ki‡Z n‡”Qbv, ax‡i ax‡i `~i n‡”Q Zv‡`i A‡bK `ywðšÍv/ Afve/ AbUb|
`iRv Rvbvjv wKQzB †bB, †bB N‡i AvmevecÎ| DËivaxKvi m~‡Î cvIqv GB iKg NiwUB wQj Zv‡`i AvkÖq¯’j|
GZUvB KiæY wQj †h, wek¦we`¨vj‡q cov gviRv‡bi Rb¨ wQj ‡KejB GKwU w`ev ¯^cœ gvÎ| A‡bK K‡ó PjwQ, wb‡Ri Amy‡LI `k UvKvi Jla wKb‡Z cvwiwb| cwiev‡ii meviB AvKv•Lv wQj gviRvb eo wkwÿZ †nvK ZvB A‡bK msMÖvg K‡i gviRvb‡K wek¦we`¨vj‡q fwZ© Kwi| cÖvBg e¨vsK dvD‡Ûkb †_‡K 2010 mv‡j wkÿve„wË cvq gviRvb, wkÿv e„wËi cy‡iv UvKvUv Avwg wb‡RB ZzjZvg e¨vsK †_‡K, †mLvb †_‡K gviRvb‡K w`Zvg Avi wKQz Ask cwiev‡ii Li‡Pi Rb¨ e¨vq KiZvg| Avgvi gviRv‡bi GKUv †gvevBj wQj bv, eÜz‡`i †gvevBj w`‡q ‡m Avgvi mv‡_ K_v ejZ|
AMÖYx e¨vsK G wmwbqi Awdmvi c‡` Kg©iZ gviRvb|
mvgvwRK cwieZ©b: gviRv‡bi eZ©gvb Ae¯’vb: gviRv‡bi e¨vw³MZ cwieZ©b: =#O * *# + O #> *? grm weÁvb wefv‡M cÖ_g †kÖYx‡Z PZz_© ¯’vb AR©b K‡i, wbR = T [ '<E\ ? ] p .{ = AMÖYx e¨vsK G wmwbqi Awdmvi c‡` PvKzixiZ| fvj †cvkvK, †gvevBj‡mU meB n‡q‡Q GLb Zvi|
Zv‡`i evwoi †jvKRb I GjvKvi cÖwZ‡ekxiv gviRvb‡K GLb A‡bK kÖ×vi `„wó‡Z †`‡L| †h †Kvb mvgvwRK KvRK‡g© Ask MÖnY .
' } " ' = " mgv‡Ri GKwU mdj bvg| A‡b‡KB gviRvb‡K GKUv D`vnviY wn‡m‡e Zz‡j ai‡Q| gviRvb e‡jb ÒcÖvBg e¨vsK dvD‡Ûkb Gi GB wkÿve„wËi Ae`vb Avgvi Rxe‡b cvIqv ‡kÖô Dcnvi| Avi †Kvb wKQzi mv‡_ Zzjbv Kiv hv‡ebv GB wkÿve„wËi Ae`vb| GB e„wË Kvh©μ‡gi mv‡_ mswkøó mevB‡K Avgvi AšÍi †_‡K ‡`vqv I kÖ×v Ávcb KiwQÓ| 183
O t h er I n fo r m a t i o n
PRIME BANK A N N UA L R E P O RT 2 0 1 5
¯^cœ bq! gwbiæ¾vgvb GLb mdj Wv³vi iscyi †Rjvi wgVvcyKiz _vbvi `wi`ª K„lK Rbve Avãyi iwk‡`i my‡hvM¨ mšÍvb gwbiæ¾vgvb| `k m`‡m¨i eo cwievi, mvavib GKwU wU‡bi N‡i †Kvb iK‡g emevm KiZ Zviv| `vwi`ªZv‡K Rq K‡i 2008 ' = C .{ ; = K‡j‡R, Gg we we Gm covi mvnm †Zv `~‡ii K_v †Kvb iK‡g MÖvRy‡qkb Ki‡e GiKgB avibv wQj cwiev‡ii, Kvib eo cwiev‡ii `y ‡ejv Abœ †hvMv‡ZB wngwmg †L‡Z n‡”Q Zvi evev‡K| evevi mv‡_ mv‡_ A‡bK mgq gv‡VI KvR Ki‡Z n‡q‡Q gwbiæ¾vgvb‡K|
evi‡Wg †Rbv‡ij nvmcvZv‡j mnKvwi †iwRóªvi c‡` PvKzwicvB, msev`wU cÖvBg e¨vsK dvD‡Ûkb KZ©©„cÿ‡K Rvbv‡j cÖvBg e¨vsK/ ¢# ' ' * = ' C £ E* Zv G‡`‡ki wkÿve„wËi BwZnv‡m GK D¾j `„óvšÍ| †mw`‡bi Abyôv‡b Dcw¯’Z kZkZ †gavex wkÿv_©x Avw_©K mnvqZvi cvkvcvwk †cj GKwU Awfbe Drmvn DwÏcbv hv Zv‡`i‡K AviI AbycÖvwYZ Ki‡e e‡j Avwg g‡b Kwi Ges GB wkÿv e„wËi K_v AvRxeb g‡b ivL‡e e‡j Avgvi wek¦vm| G iKg GKwU gnr D‡`¨‡Mi Rb¨ cÖvBg
evi‡Wg †Rbv‡ij nvmcvZv‡j mnKvix †iwRóªvi wn‡m‡e Kg©iZ Wvt gwbiæ¾vgvb|
gvbbxq MfY©‡ii KvQ †_‡K AmvaviY mvdj¨ I K…wZ‡Z¡i c`K Zz‡j wb‡”Qb Wvt gwbiæ¾vgvb|
cÖvBg e¨vsK dvD‡Ûkb †_‡K e„wË cvIqvi Abyf~wZ wK Rvb‡Z PvB‡j gwbiæ¾vgvb e‡jb, Ò†Kvb e¨vsK Avgv‡K `xN© 5 eQi Avw_©K mnvqZv w`‡e GUv Avgvi Kíbv‡ZB wQjbv| †gwW‡K‡j covi cÖPzi Pvc m‡Ë¡I Avwg wUDkwb LyR‡ZwQjvg| nVvr cÖvBg e¨vsK Gi wkÿve„wËi weÁvcbwU Avgvi bR‡i c‡o| Ae‡k‡l eû hvPvB evQvB Gi ci 2009 mv‡j Avwg e„wËi Rb¨ g‡bvbxZ nB| @ ' ' . ] ' @{ ; . # # gvm ci ci Avgv‡`i wkÿvi gvb AMÖMwZ wKbv Zv Rvwb‡q GKwU cÖwZ‡e`b w`‡Z n‡Zv cÖvBg e¨vsK dvD‡Ûk‡b| GB we‡kl c×wZi Kvi‡b Avwg fv‡jv †iRvë Ki‡ZI mÿg nB|Ó
e¨vsK I cÖvBg e¨vsK dvD‡Ûkb †K AvšÍwiK K…ZÁZv Ávcb KiwQ| eZ©gvb Ae¯’v wK? Rvb‡Z PvB‡j gwbiæ¾vgvb e‡jb ÒwPwKrmv †ÿ‡Î mnvqZv I civg‡k©i cvkvcvwk Avgvi AÎ GjvKvi evev gv‡qiv cÖvqB Avgv‡K †dvb K‡i civgk© †bq wK fv‡e Ges †Kv_vq Zv‡`i †Q‡j †g‡q‡K †jLv cov Kiv‡e, GgbwK †h †Kvb mvgvwRK Kv‡RI Avgv‡K/Avgv‡`i cwievi‡K `vIqvZ K‡i, mn‡hvwMZv I eyw×-civgk© †c‡Z Avm‡Qb A‡b‡KB Avgvi Kv‡Q| Avgv‡`i cwiev‡ii GB mvgvwRK cwieZ©bUv Avgv‡K A‡bK Avbw›`Z I D”QvwmZ Ki‡Q| Gi wcQ‡b cÖvBg e¨vsK dvD‡Ûkb Gi Ae`vb KL‡bvB fzjevi bq| cÖvBg e¨vsK Gi mvBb‡evW©wU †`L‡jB kÖ×vi `„wó‡Z ZvwK‡q _vwK Avwg, AvRxeb kÖ×v f‡i ¯^ib Ki‡ev GB gnwZ D‡`¨v‡Mi ¯^cœ`ªóv‡`i|Ó
+ . .3 ;. # p * "
184
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
Let us now see some ESP awardees who have made a visible impact in their personal life as well as the society. A few of them are seen receiving crests from the honourable Governor of Bangladesh Bank in the Award Giving Ceremony 2015:
Mehnaz Rahman, Sr. Asst. Judge, Dhaka Judge Court, Dhaka
Nazma Zabin, Asst. Commissioner (BCS), Customs & VAT
Md. Imran Hossain, Lecturer of Finance, University of Dhaka
Md. Shafiqul Islam, Islami Bank Bangladesh Ltd.
185
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
Some Outstanding Performers of ESP A good number of ESP students have completed their graduation/post-grad level studies with outstanding results. Only a few of them are shown below:
186
Md. Mustafizur Rahman PBF_ID: 11-1-2-153 Social Welfare Dhaka University Position: 1st Class 1st in Honours
Arifa Parvin Kemi PBF_ID: 10-3-2-189 Marketing Begum Rokeya University, Rangpur Position: 1st Class 1st in MBA
Md. Abdul Wazed PBF_ID: 09-1-2-117 English Dhaka University Position: 1st Class 2nd in Honours
Edris Ali PBF_ID: 09-1-2-117 History Dhaka University Position: 1st Class 2nd in Honours
Shamima Nasrin Mukta PBF_ID: 09-2-3-185 Accounting & information System Chittagong University Position: 1st Class 2nd in Honours
Md. Nure Alam PBD_ID: 10-2-1-062 Public Administration Dhaka University Position: 1st Class 4th in Honours
Ferdoushi Akter PBF_ID: 09-2-1-59 Applied Chemistry & Chemical Technology Dhaka University Position: 6th in Honours now a PhD student in USA
Easmin Akter PBF_ID: 11-2-2-184 Anthropology Jahangirnagar University Position: 1st Class 6th in Honours
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
ESP Awardee Selection Process (A-Z)
1
ESP Advertisement-2015 to invite applications published in the countryâ&#x20AC;&#x2122;s leading news papers
3
Each applicantâ&#x20AC;&#x2122;s details are included in our database
5
Validation Exercise is carried out by PBF officials
7
Agreement signed by students during Award Giving Ceremony
2
Applications are scrutinised
4
Advisory Committee meet to set cut off line for primarily selected candidates
6
Cross checking after Validation Exercise by PBF officials
8
First installment is disbursed among awardees through Automation by Dr. Atiur Rahman, honourable Governor, Bangladesh Bank
187
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
cÖwZ eQ‡ii b¨vq G eQiI `iLv¯Í AvnŸvb Ki‡j ‡`‡ki 340 wU wkÿv cÖwZôvb †_‡K 5,343 wU Av‡e`b
! " # $ %& " #' nZ-`wi`ª QvÎ-QvÎx hv‡`i fv‡jv GKUz Lvevi bv †RvUvB ‡hb Zv‡`i cvwievwiK wbqwgZ wPÎ| `vwi`ªZv hv‡`i wbZ¨ m½x, Ggb `yÕRbvi Rxeb I RxweKvi wPÎ Zz‡j aiv n‡jvt
dzUcv‡Z wcVv wewμ Kiv kwidyj GLb ivRkvnx †gwW‡Kj K‡j‡Ri QvÎ... bIMuv †Rjvi gv›`v Dc‡Rjvi GK f~wgnxb ‡dixIqvjvi mšÍvb kwidyj Bmjvg| `yB fvB GK †evb, Avi evev gv wg‡j 5 m`‡m¨i Afv‡ei msmvi| evev GKw`b KvR bv Ki‡j †mw`b Avnvi †Rv‡U bv Zv‡`i| wbR †Pv‡L bv †`L‡j wek¦vm n‡e bv miKvix Lvm Rwgi
co‡Zv| Avwg g~L© gvbyl, †jLv covi wKQzB eywS bv| †m hLb K¬v‡m cÖ_g nZ, ZLb ¯‹z‡ji wkÿKiv Avgvi evox‡Z G‡m ej‡Zv †Kvb fv‡eB kwidz‡ji †jLvcov eÜ KievbvÓ | Zv‡`i mvnm DwÏcbvq Avwg kwidz‡ji †jLvcovq †Kvb euvav †`B bv| ivRkvnx ‡gwW‡Kj K‡j‡Ri fwZ©i UvKv †hvMvo Ki‡Z ‡h KZ gvby‡li Kv‡Q nvZ cvZ‡Z n‡q‡Q Avgv‡K!!! Gfv‡e `ytwðšÍvq nvZvkvq †L‡q bv ‡L‡q cwikÖg Ki‡Z Ki‡Z Avwg GK ch©v‡q Amy¯’ n‡q cwo| Avwg ‡f‡eB wbjvg Avgvi c‡ÿ kwidz‡ji †jLv } ] = ' ; kwidyj Rvbvq,Ò†gwW‡Kj K‡j‡Ri QvÎ n‡qI Avwg evevi mv‡_ dzUcv‡Z wcVv wewμ K‡iwQ|Ó evev = = " ' = } ® =* ° * evevi mv‡_ KvR K‡i 500 UvKv wb‡q AvmZvg Gfv‡e Afv‡ei Kvi‡b Avgvi wb‡RiI g‡bvej †f‡½ c‡owQj| GL‡bv †gwW‡K‡ji eB/ cÖ‡qvRbxq mvgMÖx wKb‡Z cvwiwb| evox‡Z wewμ Kivi gZI ‡h wKQzB †bB Avgv‡`i|
RxweKv DcvR©‡bi GKgvÎ gva¨g-Gi DcKiY ˆZix‡Z e¨v¯Í kwidz‡ji gv I †evb
Dci †QvÆ GKwU Ni| eo fvB `vwi`ªZvi Pig wkKvi, ÿyavi hš¿bvq ¯‹zj †Q‡o evevi mv‡_ Kv‡R †j‡M hvq| eZ©gv‡b PÆMÖv‡g wiKkv Pvjvq| †QvU ‡evb 5g †kÖYx ch©šÍ c‡o GLb Avi ¯‹zj †h‡Z cvi‡Q bv!! wK K‡i hv‡e!! eB LvZv‡Zv `~‡ii K_v ¯‹z‡j hvIqvi g‡Zv †h GKwU †cvkvKI ‡bB Zvi! cÖwZeQi hvKv‡Zi Kvco wKsev Kv‡iv `vb `qvB wQj Zv‡`i †cvkvK cÖvwßi GKgvÎ Drm|
kwidyj‡`i eZ©gvb Ae¯’v: gv›`v evmóv‡Û iv¯Ívi cv‡k wcVv wewμ K‡i Zvi evev, evox‡Z gv †evb †XwK‡Z Pvj ¸‡ov K‡i †`q, we‡K‡j evev dzUcv‡Z fvcv wcVv evwb‡q wewμ K‡i| 100-150 UvKv Avq Ki‡Z Nvg Siv‡Z nq cÖwZwbqZ| GZ Afve m‡Ë¡I kwidzj GZ fv‡jv †iRvë Ki‡jv wKfv‡e? kwidzj e‡jb, ÒLvwj cv‡q ¯‹z‡ji Avw½bvq cÖ_g cv †i‡LwQjvg| †Quov Rvgv! ‡bB LvZv-‡cwÝj! A_P ¯‹z‡j ‡hZvg cªwZw`b| cÂg †kÖYx‡Z fvj †iRvë Kivq wkÿ‡Kiv Avwe¯‹vi Ki‡jb Avgvi †gav kw³| ZvB, Zvuiv webv g~‡j¨ bZzb †kÖwY‡Z fwZ© Kwi‡q †`b Avgv‡K| Gfv‡e Pj‡Z _v‡K Avgvi GwM‡q Pjv| Avjøvn& Zvqvjv Avgvi kÖg‡K wedj K‡ibwb| kZ euvav wWw½‡q Rxe‡bi cÖ_g cvewjK cixÿv GmGmwm-‡Z ‡Mv‡ìb wRwcG †c‡q DËxY© nIqvq Avb‡›` fvmwQj AÎ MÖvg| GKBfv‡e GBPGmwm cixÿv†ZI ‡Mv‡ìb wRwcG Aÿybœ _v‡K| A_P UvKvi Afv‡e GBPGmwm cvk K‡i Ab¨vb¨ mncvwV‡`i g‡Zv †Kvb †KvwPs †m›Uv‡i fwZ© n‡Z cvwiwb Avwg| kwidz‡ji evev e‡jb ÒAvwg KL‡bvB Avgvi evRvb‡K (kwidzj) GKwU Rvgv w`‡Z cvwiwb| gvby‡li KvQ †_‡K cyivZb RvgvKvco †P‡q G‡b w`Zvg | ¯‹z‡ji mn cvVx‡`i KvQ †_‡K eB G‡b 188
Av‡qi Ab¨ †Kvb Drm †bB kwidz‡ji evevi| ZvB‡Zv, iv¯Ívi cv‡k dzUcv‡Z fuvcv wcVv wewμ K‡i †Kvb iK‡g RxweKv wbe©vn Ki‡Qb
Pviw`‡K †hb AveviI Avw_©K K‡ói NbNUv Avavui bvgvi AvksKv| g‡b n‡jv wb‡f hv‡e Avgvi Wv³vi nIqvi ¯^cœ| mg~‡`ª Wz‡e hvIqvi = ] ? = ' ² = ' p . . Ki‡Z _v‡K; wVK †m gyû‡Z© cÖvBg e¨vsK dvD‡Ûkb Avgv‡K Avavui †_‡K Avkvi-Av‡jvi mÜvb †`q, Ges Avgvi Wv³vi nIqvi ¯^cœ ev¯Íevqb Ki‡Z Avwkev©` n‡q `vwo‡q‡Q Avgvi cv‡k|Ó kwidz‡ji evev e‡jb ÒnVvr GKw`b kwidzj Avg‡K †dvb K‡i e‡j evev Avgv‡K UvKv †`Iqvi Rb¨ †Zvgv‡K Avi gvby‡li Kv‡Q nvZ cvZ‡Z n‡e bv| GLb †_‡K †jLvcov †kl bv nIqv ch©šÍ cÖwZgv‡m cÖvBg e¨vsK Avgv‡K Avw_©K mn‡hvMxZv Ki‡e G K_v ej‡ZB kwidzj Kvbœvq †f‡½ c‡o! AvwgI Avi wb‡R‡K a‡i ivL‡Z cviwQjvg bv Kvbœvi Rb¨ Avi K_v ej‡Z cvwiwb! Avgvi Rvbv ‡bB wK e‡j Avwg cÖvBg e¨vs‡K ab¨ev` Rvbv‡ev Z‡e AvRxeb †`vqv Kie|Ó e„wËi cÖ_g wKw¯Íi UvKv †c‡q kwidzj †QvU †evb‡K Avevi ¯‹z‡j fwZ© Kwi‡q †`q| kwidzj e‡j cÖvBg e¨vsK dvD‡Ûkb Gi Ae`vb AZzjbxq, Avgvi Rxe‡b me‡P‡q eo AwffveK, Rxe‡bi †kl w`b ch©šÍ cÖvBg e¨vsK Gi K_v Avgvi ü`‡q _vK‡e|
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
ÒiwbÓ fv½v N‡i Puv‡`i Av‡jv ibx, `y-e‡Y©i GKwU bvg| hvi Rxe‡bi `yt‡Li K_v¸‡jv ms‡ÿ‡c wjL‡jI g‡b nq c„ôvi ci c„ôv †j‡M hv‡e|
PvcvBbeveM‡Äi GgbB GK cwiev‡ii Zvi Rb¥ †h evwo‡Z GgbwK MÖv‡gI †bB GKwU cwicvwU Ni| hZ`~i †PvL hvq, ïayB RivRxb© Ni Avi NbemwZ| ‡`‡L g‡b n‡”Q GKUz evZvm G‡jB ‡n‡j c‡o hv‡e Ni¸‡jv| ibxi N‡i Avwg †mvRv n‡q `vov‡Z cvwiwb, MZev‡ii S‡o eveyB cvwLi evmvi gZ NiwU †n‡j co‡Q| euvk Kv‡Vi Afv‡e NiwU †givgZ Ki‡Z cv‡iwb| wK fv‡e Ki‡e! cuvP (05) m`‡m¨i `yÕ‡ejv Avnvi †hvMv‡ZB Nyg nvivg hv‡`i|
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fv½v N‡ii †mB Puv‡`i Av‡jv iwb‡K cÖvqB bv †L‡q _vK‡Z nq| e„wËi ÒfvBevÓ ‡`qvi w`bI bv †L‡qB wQj †m|
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XvKv wek¦we`¨vj‡q Mass Communication & Journalism Gi QvÎ ibx| evwo‡Z Kg hvq| KviY, N‡i _vKvi RvqMv †bB|
189
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
Feedback on PBF-ESP stipends from senior intellectual entities of top educational institutions of Bangladesh:
cĂ&#x2013;vBg e¨vsK â&#x20AC;ĄgwWâ&#x20AC;ĄKj Kâ&#x20AC;Ąjâ&#x20AC;ĄR coâ&#x20AC;&#x201C;qv QvĂ&#x17D;-QvĂ&#x17D;xâ&#x20AC;Ą`i â&#x20AC; h eâ&#x20AC;&#x17E;wĂ&#x2039; cĂ&#x2013;`vb Kâ&#x20AC;Ąi Avmâ&#x20AC;ĄQ Zv GBme QvĂ&#x17D;-QvĂ&#x17D;xâ&#x20AC;Ą`i Rxeâ&#x20AC;Ąb LyeB ¸iĂŚZÂĄ enb Kiâ&#x20AC;ĄQ| Aâ&#x20AC;ĄbK â&#x20AC; gavex QvĂ&#x17D;-QvĂ&#x17D;x UvKv cqmvi Afvâ&#x20AC;Ąe covĂŻbvq gâ&#x20AC;Ąbvâ&#x20AC;ĄhvMx nâ&#x20AC;ĄZ cvâ&#x20AC;Ąi bv| cĂ&#x2013;vBg e¨vsK G mKj QvĂ&#x17D;-QvĂ&#x17D;xâ&#x20AC;Ą`i Avw_ŠK mnvqZv `vb Kâ&#x20AC;Ąi . *  Â&#x2022;] # . # @ Â&#x201D; ;Âť Kiâ&#x20AC;ĄQ| Avwg e¨vwÂłMZ fvâ&#x20AC;Ąe Avkv Kwi cĂ&#x2013;vBg e¨vsK GmKj QvĂ&#x17D;QvĂ&#x17D;xâ&#x20AC;Ą`i cvâ&#x20AC;Ąk _vKâ&#x20AC;Ąe|
Avwg â&#x20AC; Râ&#x20AC;Ąb AZ¨ťĂ? Avbwâ&#x20AC;ş`Z â&#x20AC; h, Ă&#x2019;cĂ&#x2013;vBg e¨vsK dvDâ&#x20AC;ĄĂ&#x203A;kbĂ&#x201C; mgMĂ&#x2013; â&#x20AC; `â&#x20AC;Ąk â&#x20AC; gavex I `wi`ÂŞ wkĂżv_Šxâ&#x20AC;Ą`i Dâ&#x20AC;?PwkĂżv ARŠâ&#x20AC;Ąbi jâ&#x20AC;ĄĂżÂ¨ â&#x20AC; gavexâ&#x20AC;Ą`i wkĂżveâ&#x20AC;&#x17E;wĂ&#x2039; cĂ&#x2013;`vb Kâ&#x20AC;Ąi hvâ&#x20AC;Ąâ&#x20AC;?Q hv wkĂżv_xŠâ&#x20AC;Ą`i Aa¨vqb Rxeâ&#x20AC;Ąb GK Acwimxg f~wgKv cvjâ&#x20AC;Ąb mnvqZv Kâ&#x20AC;Ąi hvâ&#x20AC;Ąâ&#x20AC;?Q| GB wkĂżveâ&#x20AC;&#x17E;wĂ&#x2039;i cwimi AviI e¨vcK nâ&#x20AC;Ąj Aâ&#x20AC;ĄbK â&#x20AC; gavex `wi`ÂŞ wkĂżv_Šxiv GB eâ&#x20AC;&#x17E;wĂ&#x2039;i AvIZvq Avmâ&#x20AC;ĄZ cviâ&#x20AC;Ąe| GB gnr Dâ&#x20AC;Ą`¨vâ&#x20AC;ĄMi Rb¨ Ă&#x2019;cĂ&#x2013;vBg e¨vsKĂ&#x201C; I Ă&#x2019;cĂ&#x2013;vBg e¨vsK dvDâ&#x20AC;ĄĂ&#x203A;kbĂ&#x201C;â&#x20AC;ĄK Avwg AvĹĄĂ?wiKfvâ&#x20AC;Ąe weâ&#x20AC;Ąkl ab¨ev` Rvbvwâ&#x20AC;?Q| Ă&#x2019;â&#x20AC;ĄeMg â&#x20AC; ivâ&#x20AC;ĄKqv wekÂŚwe`¨vjqĂ&#x201C; Gi Aâ&#x20AC;ĄbK wkĂżv_xŠ GB eâ&#x20AC;&#x17E;wĂ&#x2039; â&#x20AC; câ&#x20AC;Ąq Avw_ŠK mâ&#x20AC;?QjZv jvf Kâ&#x20AC;Ąi e¨vcK DcKâ&#x20AC;ŚZ nâ&#x20AC;Ąâ&#x20AC;?Q hv Ab¨vb¨ cĂ&#x2013;wZĂ´vâ&#x20AC;Ąbi Rb¨ AbyKiYxq Džj `â&#x20AC;&#x17E;ĂłvĹĄĂ?| Avwg cĂ&#x2013;vBg e¨vsK dvDâ&#x20AC;ĄĂ&#x203A;kâ&#x20AC;Ąbi mvweŠK mvdj¨ I Kj¨vY Kvgbv Kwi| ab¨ev`vâ&#x20AC;ĄĹĄĂ?
(â&#x20AC;ĄkL gvâ&#x20AC;ĄR`yj nK) wefvMxq cĂ&#x2013;avb, gvâ&#x20AC;ĄKŠwUs wefvM â&#x20AC;ĄeMg â&#x20AC; ivâ&#x20AC;ĄKqv wekÂŚwe`¨vjq, iscyi|
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
Number of ESP awardees and monthly stipend by year
3,000
2,500
2,000
1,500
2,445
2009
2010
2011
BDT 2,400
205
BDT 2,400
196
BDT 2,400
2008
198
BDT 2,200
2007
0
BDT 2,000
122
BDT 2,000
170
BDT 1,800
BDT 1,800
500
BDT 1,500
1,000
386
394
402
372
2012
2013
2014
2015
Total
Year Number of Awardees per year Monthly stipend of each student by year
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
PBEMS
Prime Bank English Medium School (PBEMS) years, I have been facing a lot of questions from parents/ guardians of students who do not understand the different set up and methods used in PBEMS. I tried my best to make them understand the unique nature of the school as it is really different to most of the traditional schools in the country... Nowadays, I notice that the questions are disappearing and I can see the glimmering hope of each child and parents”. It is true and natural that parents of new students at PBEMS and those who are not yet familiar about the school pose many questions since PBEMS is quite different from most of the schools in Bangladesh.
Mr. Blas Ofelie S. Descallar, Principal, PBEMS
Empowering the Country’s Next Generation of Leaders The vision of PBEMS in shaping future leaders who contribute to the country’s development… Amazing things happen when people connect: Prime Bank English Medium School (PBEMS) is one such phenomenon. With the assistance of American missionaries belonging to the religious congregation of the sisters of Maryknoll, PBEMS, an initiative of Prime Bank Foundation, emerged with the vision of providing accessible and affordable quality English medium education for all. As a Filipino lay missionary involved in voluntarism in many countries for several years, I came to Bangladesh to share my knowledge in education just after finishing my teaching stint and higher education studies in the USA. I personally believe that the potential of a country’s lies largely with the young generation who will be the leaders of tomorrow. That is why the prospect of guiding young minds both academically and morally has been a calling for me. At PBEMS, we multiply the impact of individual efforts to transform lives and, hopefully, communities.
As the Principal of PBEMS, I have three strategic priorities, namely: a) to build our students’ core through interactive and holistic education b) to build the nation by animating our and community students to get involved in social services and c) to build the future of our students through affordable quality education. Since its inception in 2008, PBEMS has been striving to achieve these three imperatives and I am proud to say that since my involvement with PBEMS, we have been able to undertake these strategies with the support and cooperation of all stakeholders which includes students, teachers, staff, parents and the community.
192
Computer Class
Typically, schools in Bangladesh take the old-fashioned approach or what is commonly called ‘traditional method of education’ which is focused on rote learning and memorisation (with no effort at understanding the meaning). Traditional education is simply an oral recitation where students sit quietly at their places and listen to one student after another recite his or her lesson, until each has been called upon. The teacher’s primary activity is assigning and listening to these recitations then asking students to study and memorise the assignments at home. In this method, learners face a great deal of pressure as they are forced to memorise and then recall a lot of information for exams.
Today, many countries have abandoned this traditional method of teaching in favour of student-centered and task-based approaches to learning. PBEMS’s key claim to offering quality education is through the adoption of progressive education practices. Instead of using the traditional method of teaching, PBEMS uses the interactive, child-centered teaching method based on up-to-date educational theory and practice.
Unique teaching methods which set PBEMS apart…
At PBEMS, students are viewed as mentally inquisitive human beings. The teacher’s role is to engage the student intellectually, bringing about a fruitful interplay between the students’ prior knowledge and the new information being taught. Students
In last year’s annual report of PBL, Mr. Md. Zahidul Alam, father of Nafiu Zahid Tanjim (Class 6 student) wrote: “For six
are frequently asked questions and invited to relate what they are learning and share their experiences.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
The teaching method at PBEMS is child-centered which gives
better. In this case, the class went to the Anatomy Laboratory
priority to the nature and developmental stages of children.
of Prime Bank College of Nursing to better understand their Science lesson regarding the human body.
Children are seen as naturally eager to learn, yet in danger of losing this quality if unduly pressured. While the curriculum is
All class levels at PBEMS have two educational trips each year.
based on that designed for taking the University of Cambridge 0 and A-Level exams, the lessons are taught at a pace appropriate to the children’s stage of
. The use of the word
“exam” is being avoided because of the anxiety it causes students; instead, quizzes or short “tests” are administered, often without the students knowing that they are taking them. Homework is kept at a moderate level and home tutoring strictly prohibited (parents must sign an agreement not to provide coaching or private tuition). All of these practices and policies help ensure that the learning experience is fresh, accurate and enjoyable so that the child’s innate desire to learn is kept alive.
Students learning about the human anatomy
The sites for their field trips are chosen based and related to their lessons. Teachers are consulted and asked to suggest sites that could help students comprehend better with their lessons. Ocular visits to all suggested sites are conducted and assessments of the visits are deliberated choosing the best sites where students would learn better.
Mathematics Class in progress
By adopting the interactive method, PBEMS students relish various benefits. First and foremost, the students learn the subject matter more efficiently for it is in the interaction of the student’s knowledge and the teacher’s information that true learning takes place. Secondly, by de-emphasising rote memorisation and emphasising active, exploratory learning, students’ thinking and problem solving skills are greatly developed. They are able to question, put ideas together, and use their imagination and creativity. Moreover, students are encouraged to be self-motivated learners and to make learning a lifelong endeavour. Their enjoyable and memorable
The school strives to teach not only academic subjects but values such as honesty, self-reliance, and consideration towards others through community service and social concern. Kumkum, a sixth grader last school-year shared in the PBEMS Chronicle stating:“In the first assembly, Mr. Blas, our principal, explained why it is necessary to perform the assembly and how to properly sing the national anthem. I felt lucky to be a part of this assembly where I can show respect to our country.” In the same issue of the newsletter, Arbab, another 6th grader stated: “A special prayer is also said for the victims of the wars in Israel and Palestine, Iraq and Syria as well as for the ebola outbreak victims in Africa. We also prayed for peace in our country.” Students at PBEMS impart prayer as part of their day as classes begin and end with a prayer. They are taught to pray not only for themselves but for others as well.
experience at school is expected to inspire students to continue to be eager learners.
Last year, Janifa (Class 5) shared her thoughts in the first issue of PBEMS Chronicle (school’s newsletter) by saying: “On September 29, 2014, we visited the Anatomy Laboratory of Prime Bank College of Nursing. We saw a real skeleton and bones and learned how the skull, femur, collar/jaw/hip bones, vertebrae, tibia and other bones of the body work. We gained a lot of scientific knowledge during the visit.” Each lesson at PBEMS is designed to be interactive, it is not just mere lecture and asking questions but making the lesson real by providing tangible educational tools that help students understand better. When crucial educational devices are not available in the campus, students are brought to places where they could learn
All students collected dry food items to donate to the underpriviledged
193
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
The school conducts social involvement and community services wherein students donate clothing and non-perishable food items. Recently they collected items to share with destitute people and Mother Teresa’s Center. Students also donated books and educational items to schools in remote villages. It is also important to note that PBEMS celebrates international observances such as Universal Children’s Day, International Volunteer Day, Earth Day, etc. apart from the usual Mother Language Day and national observances. In these occasions, students usually showcase their talents and abilities through exhibits, variety shows, debates, quiz competitions, fairs and more.
PBEMS as a CSR project for
…
After my six months’ volunteer service at Bangladesh Alternative Course For Human Advancement (BACHA) in 2011, I was invited to serve PBEMS last year. As I came to PBEMS for the schoolyear 2014-2015 to serve as Principal, many parents shared their understanding of the term Corporate Social Responsibility (CSR). Parents were saying that the school should be of low cost if not free of charge since it is a CSR project of Prime Bank Limited. Coming from various non-government organisations (NGO) and having ministries in the church in my home country the Philippines and abroad, I recognised what parents meant as they associate CSR with charity and philanthropy.
At a parent-teacher meeting, to give parents the proper interpretation of CSR, I explained the fact behind the term. CSR originated in the 1960s as a term used to explain legal and moral responsibilities of a corporation. CSR refers to the way in which companies re-invest back and positively impact their community, socially, economically and environmentally. It means that under-privileged communities can, and should benefit, from the influence of local businesses. However, CSR was never meant to be free like charitable and philanthropic programmes and services.
Visit to Mother Teresa’s Home of Compassion
Why PBEMS is a model school worth replicating… It is the norm in Bangladesh that English medium schools are expensive and only certain people can afford it. Nowadays, English medium schools with lower costs are sprouting like mushrooms around the country but many have qualms
Liz Maw, CEO of nonprofit organisation Net Impact, noted that CSR is becoming more mainstream as forward-thinking companies embed sustainability into the core of their business operations to create shared value for business and society. In several instances, CSR is called corporate conscience, corporate citizenship or responsible business wherein companies are encouraged to journey with the government and contribute in addressing the and improving the quality of the life of the people in the community and country at large.
regarding the quality of education they are offering. Prime Bank Foundation envisioned in bridging this gap. Thus, PBEMS was set up with the desire to offer an affordable quality English medium school that is accessible to all regardless of the socio-economic strata, an alternative to the expensive English medium schools that cater only to the Bangladeshi aristocrats or families from the upper socio-economic class.
Since PBF has taken the initial step of making affordable quality English medium schooling more accessible to the people, the next step is to establish other schools based on the PBEMS model of interactive method of teaching with values formation in other parts of the country. It is healthier that more children can enjoy the educational advantages that are only available
As a CSR project, the duty of PBEMS is to offer low cost quality English medium schooling accessible to all coupled with values formation, guiding and forming young students to be morally upright, law abiding citizens and future leaders of the country. These missions and visions of PBEMS can only be realised, nurtured and replicated through capacity building for sustainable operation. The minimal amount that parents contribute for tuition and other necessary school fees, make the school sustainable. By being sustainable, PBEMS is meeting the needs of the present without compromising the ability of future generations to meet their needs, which ultimately make a of the country. significant and lasting impact in the Sincerely yours
to quite a few at the moment. In doing so, the overall level of education, English proficiency and values orientation and law abiding citizens in the country will rise, with massive advantages for its social and economic
194
.
Mr. Blas Ofelie S. Descallar Principal, PBEMS
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
Prime Bank College of Nursing nursing education. In the midwifery lab
midwifery models
and equipments are available to meet the requirements of lab practice like dummy of fetus, gestation series, dummy of female reproductive organ and many other necessary posters e.g pictographs, overall midwifery concept, delivery and labor position, breast feeding etc. Besides this, there are other labs: Micro-biology, Nutrition, Simulation, Anatomy and Physiology, Nutrition and Computer lab with internet connection. The PBCN library has a rich collection of nursing and other related books with proper sitting arrangement for students.
PBCN has a panel of highly experienced & well-trained teachers who teach different subjects and provide clinical guidance to the students in the hospitals, identify students’ needs and problems and provide guidance and counselling accordingly.
Extra emphasis is given on English to help the students develop an understanding of the coursework and to keep pace with the global market. PBCN has a full time English faculty to provide extra guidance throughout the year.
Prime Bank College of Nursing (PBCN) initially began its journey as Prime Bank Nursing Institute in January 2013. This high quality Nursing education institution offers 3 year long Diploma in Nursing Science & Midwifery Course. The course is approved by the Ministry of Health & Family Welfare (MoH&FW) and Bangladesh Nursing Council (BNC).
It is with great pride that Prime Bank College of Nursing bade farewell to its first batch of Diploma in Nursing Science & Midwifery Students this year. Having completed three successful academic years, the first batch of PBCN consisting of 29 students graduated at the end of this year. After appearing at the Bangladesh Nursing Council licensing exam they will be allowed to be employed as a registered nurse. To inspire students, PBCN has a provision of offering an award for best performance titled the “Florence Nightingale’s Award” for the student who showed best academic and clinical performance during the course.
As a result of its quality education, the Ministry of Health and Family Welfare, Government of Bangladesh has approved the plan to upgrade this institute into Prime Bank College of Nursing and offer B.Sc. in Nursing (4 years basic and 2 years Post-Basic) courses. Courses will be offered as soon as the affiliation with the University of Dhaka is complete. Plans for introducing M.Sc. in Nursing as well as short Nursing Certificate courses for different professionals are also being contemplated.
PBCN’s overall objective is to assist Bangladesh in providing skilled nurses who will contribute to the national and meet the increasingly high demand of qualified nurses in different healthcare service sectors throughout the country and beyond.
PBCN has adequate classrooms with multimedia projector and modern lab facilities for the students to ensure high quality
Passing-out ceremony of 1st batch/session: 2012-13 Diploma in Nursing Science & Midwifery Students
195
O t h er I n fo r m a t i o n
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Of the fresh graduates, 5 nurses are already employed in reputed hospitals, Khadija Khatun is one such nurse whose story is presented below in her own words: â&#x20AC;Ą`â&#x20AC;Ąki cĂ&#x2013;Z¨ťĂ? AĂ&#x201A;j gqgbwmsn â&#x20AC;ĄRjvi MdiMuvI Dcâ&#x20AC;ĄRjvi ÂŻ^Ă ] <E %
' Âź Â&#x203A; = Â&#x17E;{ Aaxâ&#x20AC;Ąb ÂŻâ&#x20AC;&#x2122;vbxq ÂŻâ&#x20AC;šzj I Kâ&#x20AC;ĄjR â&#x20AC; _â&#x20AC;ĄK weĂ vb wefvâ&#x20AC;ĄM 2010 I 2012 mvâ&#x20AC;Ąj h_vÎźâ&#x20AC;Ąg GmGmwm I GBPGmwm cvk Kwi| GBmGmwmâ&#x20AC;ĄZ Zzjbvg~jKfvâ&#x20AC;Ąe fvj djvdj Kivq covâ&#x20AC;ĄjLvq Avgvi wbâ&#x20AC;ĄRi I cwievâ&#x20AC;Ąii Drmvn Aâ&#x20AC;ĄbK â&#x20AC; eâ&#x20AC;Ąo hvq| ZLb cwievi â&#x20AC; _â&#x20AC;ĄK wmĂ&#x2014;vĹĄĂ? â&#x20AC; bqv nq Avgvâ&#x20AC;ĄK ÂŻâ&#x20AC;&#x2122;vbxq wWwMĂ&#x2013; Kâ&#x20AC;Ąjâ&#x20AC;ĄR fwZŠi| wKĹĄâ&#x20AC;&#x2DC; Gâ&#x20AC;ĄZ Avwg ivwR nqwb| gv-evevâ&#x20AC;ĄK Rvbvjvg â&#x20AC; Rbvâ&#x20AC;Ąij jvBâ&#x20AC;Ąbi â&#x20AC; Pâ&#x20AC;Ąq KgŠg~Lx ev KvwiMwi wkĂżvi cĂ&#x2013;wZ covĂŻbvi Avgvi `â&#x20AC;&#x17E;p Bâ&#x20AC;Ąâ&#x20AC;?Qi K_v| ZLb gv-evev Avgvi KvwiMwi wkĂżvi cĂ&#x2013;wZ weâ&#x20AC;Ąkl AbyivM â&#x20AC; `â&#x20AC;ĄL wmĂ&#x2014;vĹĄĂ? wbâ&#x20AC;Ąjb Avgvâ&#x20AC;ĄK XvKvq bvwmŠsG fwZŠi| GRb¨ eo fvB Avgvâ&#x20AC;ĄK MĂ&#x2013;vâ&#x20AC;Ągi evox â&#x20AC; _â&#x20AC;ĄK XvKvi Kzwoj G AewÂŻâ&#x20AC;&#x2122;Z cĂ&#x2013;vBg e¨vsK bvwmŠs BbwáwUDâ&#x20AC;ĄU G wbâ&#x20AC;Ąq Avâ&#x20AC;Ąmb| eZŠgvâ&#x20AC;Ąb cĂ&#x2013;wZĂ´vbwUi cwiewZŠZ bvg cĂ&#x2013;vBg e¨vsK Kâ&#x20AC;ĄjR Ae bvwmŠs .Â&#x2018; H E .Ă&#x192; Â&#x201D; ] H ; = * Â&#x17E; Ă&#x2026; " { "Ă&#x2021; ¢ Â&#x17E; "Â&#x; = { ? ]Ă&#x2030;= # Ă&#x160; C .{ cĂ&#x2013;wÂłqv mâ&#x20AC;ĄegvĂ&#x17D; ĂŻiĂŚ| Ms. Khadiza Khatun (1st Batch PBCN Student), Sr. Staff Nurse, Z. H. Sikder Womens Medical College Hospital, Gulshan-II.
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cwievi Avgvi cĂ&#x2013;wZ fxlY Lykx| mâ&#x20AC;&#x17E;wĂłKZŠvi Kvâ&#x20AC;ĄQ GLb Avgvi GKgvĂ&#x17D; cĂ&#x2013;v_ŠYv fwel¨â&#x20AC;ĄZ Dâ&#x20AC;?PZi bvwmŠs wkĂżvi myâ&#x20AC;ĄhvM MĂ&#x2013;nY Kâ&#x20AC;Ąi wbâ&#x20AC;ĄRâ&#x20AC;ĄK â&#x20AC; hb GKRb Av`kŠ bvmŠ wnâ&#x20AC;Ąmâ&#x20AC;Ąe Mâ&#x20AC;Ąo Zzjâ&#x20AC;ĄZ cvwi! wZwb â&#x20AC; hb Avgvâ&#x20AC;ĄK â&#x20AC; mB kwÂł I mvg_Š¨ `vb Kâ&#x20AC;Ąib| AvRâ&#x20AC;ĄK Avgvi GB AeÂŻâ&#x20AC;&#x2122;vâ&#x20AC;Ąb â&#x20AC; cĹ Qvi Rb¨ Mfxi kĂ&#x2013;Ă&#x2014;vi mvâ&#x20AC;Ą_ ÂŻ^iY KiwQ cĂ&#x2013;vBg e¨vsK Kâ&#x20AC;ĄjR Ae bvwmŠs Gi kĂ&#x2013;â&#x20AC;ĄĂ&#x2014;q wkĂżKeâ&#x20AC;&#x17E;â&#x20AC;ş` Ges
Ms. Khadiza carrying out her duties as a Senior Staff Nurse.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
HIGHLIGHTS OF 2015 Every year new milestones are uncovered and PBCN keeps striving towards excellence in the field of nursing education. Below are highlights of some of the activities of PBCN this year:
Candle Lighting and Installation Ceremony
Mr. Azam J Chowdhury, Chairman, addressing the programme as the Chief Guest, where students also took their “Nightingale Pledge”
On 25th April 2015 a “Candle Lighting and Installation Ceremony” was organised at PBCN. Mr. Azam J Chowdhury, Chairman, Prime Bank was present as the Chief Guest; Mrs. Suraiya Begum, Registrar, Bangladesh Nursing Council, and Mr. Nader Khan, Chairman, Prime Bank Foundation were the
Special Guests. This ceremony was held to welcome the new batch as well as provide a platform for the students who will begin their clinical practice, make their ‘Nightingale Pledge’ which is a statement of the ethics and principles of the nursing profession.
Extracurricular Activities:
Staff Development:
Students performing in a cultural programme organised at PBCN
A training session for the PBCN faculty
PBCN firmly believes that a wholesome education requires not only a strong academic foundation but also exposure to cultural activities. That is why PBCN encourages its students to involve themselves in numerous extracurricular activities by organising and participating in different events like debating, observing Florence Nightingale’s Birthday as International Nurses’ Day on 12th May, celebrating International Mother Language Day on 21st February, and other national days where they can showcase their talents.
PBF always believes in continuous learning and development of the skills of the PBCN faculty members. Ongoing teaching evaluation and feedback by the students and Academic Head take place regularly. PBCN provides opportunities for the faculty to attend staff development programmes e.g various workshops and conferences held by recognised organisations which in turn enhances their further development. Moreover, all faculty members recently had the opportunity to participate in an exceptional Staff Development Programme conducted by Mr. Blas Ofelie S. Descallar, Principal-PBEMS at Novojoty Niketan- a retreat centre of Jesuits Father located in Mothbari, Gazipur. Such programmes help to revitalise one-self for professional life so that more work can be done for professional development and the staff can enjoy their job and work with energy and enthusiasm.
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O t h er I n fo r m a t i o n
Shifting to a New 10 Storied Building at Khilkhet PBCN began its shifting process at the end of this year from K-90, Kuril-Progoti saroni, Dhaka-1217 to a ten storied building at K-36/3 Post Office Road, Khilkhet, Dhaka-1229. The new shift brings the college and hostel under one roof and also provides ample space to accommodate more students and facilities.
Clinical Learning Facilities: PBCN students are the only ones to receive permission
integrated when the students explore real situations.
for clinical practice in Kurmitola General Hospital (KGH) which
Students get adequate handsâ&#x20AC;&#x201C;on practice skill in midwifery
has the capacity to accommodate 500 patients. KGH provides an excellent platform for our students to gain practical
from Dhaka Medical College on the management of normal
knowledge and skills, thereby helping them to develop
and childbirths and care of newborn. Besides, to fulfill the
practical nursing skills to provide safe and competent nursing
Midwifery is learnt primarily through practical experience; therefore, knowledge and clinical practice can only be
curricular requirements, students do their clinical practice at Dhaka Shishu Hospital, National Institute of Mental Health Hospital, National Institute of Traumatology and Orthopedic Rehabilitation Hospital, Prabin Hetoyishi Sangho and Radda MCH-FP.
PBCN Trainee at Kurmitola General Hospital
A PBCN trainee takes care of a pregnant woman at Dhaka Medical College Hospital.
care to patients.
A PBCN trainee provides child resuscitation at Dhaka Shishu Hospital
A PBCN trainee councels a psychiatric patient at the National Institute of Mental Health
The facilities which PBCN provides its students help
statistic explains why we continue to strive towards
lay the foundation for well-prepared nurses who can
our mission to create quality nurses who can touch
and meet the
the lives of the sick and unwell and hope to change
demands of the time. In 2015, there was a demand
the lives of many. Our journey has just begun, but we
for 8,000 new nurses in Bangladesh. However
hope to gift the nation with many bright young nurses
only 3990 new nurses were produced. This simple
in the years to come.
contribute to the national
198
pregnancy & childbirth and identify complicated pregnancies
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
HEALTH Prime Bank Eye Hospital (PBEH)
Screening Camp”. Almost 13,000 patients were examined in those camps.
The Prime Bank Eye Hospital (PBEH) operates with a mission to render highly affordable but quality eye care to as many people
Park Based Diabetic Screening Camp:
as possible. This means not only serving the patients from all backgrounds, but more importantly, giving the same quality
People who suffer from diabetes are prone to eye diseases.
service to those who need the service but can barely afford healthcare. Since it opened its doors for patients in 2012, PBEH has served over 42,000 patients, mainly from the low-income
Diabetic Retinopethy is one such highly prevalent eye disease. Keeping this in mind, PBEH introduced “Park Based Diabetic Screening Camp” in the year 2015.
segment of the population. Surgeries have been performed on almost 6,000 patients, 78% of whom come from PBEH outreach camps which are carried out in remote and hard to reach areas throughout Bangladesh.
Performance of PBEH in the Year-2015: PBEH, in the year-2015, examined 15,481 patients as walk-in. On the other hand, 12,823 patients (PBEH camp: 5,708; Park camp: 2,035; School screening: 4,835 & Industry screening: 245) were examined in different outreach eye camps. Compared to 2014, walk-in patients’ growth rate was 30.09% in 2015 which indicates a positive trend in the increase in patient flow since its inception.
Walk-in Patients Examination/Growth by Year
Y-2012
9,042
5,676
59.30%
Y-2013
11,900
31.61%
15,481
30.09%
Blood sugar tests being carried out in a Park Camp.
PBEH carried out 19 such camps in 2015 in Dhaka City. Under this programme, the blood sugar, pressure & weight were checked of those who came to the park very early in the morning for exercise/jogging. Among the tested people about 50% had high blood sugar (≥7.0 mmol/ltr, fasting). Those people were advised for an immediate eye check-up to confirm whether they are suffering from “Diabetic Retinopathy” or any other eye diseases. It may be noted here that out of 2,035 patients, 193 (9.48%) came at PBEH for availing eye care services.
Y-2014
Y-2015
Walk-in Patients Examination
School Screening Camp:
PBEH performed 899 surgeries in the year 2015. Contribution of PBEH to eliminate avoidable blindness may be similar to dewdrops but has a place in the nation-wide context. PBEH is pursuing its objective to provide accessible eye-care services to all and play a role in the overall national healthcare through its initiatives.
Achievements of PBEH in 2015 Outreach Eye Camps: To spread quality eyecare servies among the masses, PBEH carried out 75 (seventy five) outreach eye camps in the year 2015. The eye camps were “PBEH Camp”, “School Screening Camp”, “Industry Screening Camp” & “Park Based Diabetic
Vision testing at school
Refrective Error (RE) among school going children is gradually increasing day by day in our country. To check the RE among
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h e r I n fo r m a t i o n
students, PBEH carried out 18 “School Screening Camps” in 2015. 4,835 students were examined this year and 287 (5.93%)
was made with PRAN-RFL Group represented by its Finance
were identified with RE; these students were councelled to take necessary eye measures on an urgent basis through a
Agreement between PBEH and Pran Group was signed in October 2015.
referral slip. One hundred sixty four (57%) students came to PBEH seeking eye care services; in some cases the parents also consulted our eye specialists.
Director, Ms. Uzma Chowdhury.
The Memorandum of
As a result of the partnerships, PBEH organised three camps in 2015 in Dhaka, Gazipur and PIP-2 at Gurashal, Narsingdi. More than 2,300 patients were examined in these camps. Reading
As part of the school screening camps, the school teachers were oriented on how to identify eye-diseases among students.
glasses and power glasses were prescribed and dispensed to
Memorandums of Understanding with Partner Organisations
Vision Centre-A New Undertaking of Prime Bank Eye Hospital
500 patients and around 70 patients were identified for surgery.
Prime Bank Eye Hospital (PBEH) signed several Memorandum of Understanding with non-profit organisations Shakti Foundation, Caritas Bangladesh and Christian Commission for Development in Bangladesh (CCDB). These organisations have established initiatives that are geared towards providing the disadvantaged masses access to health, education and livelihood. These aims are parallel to the goals of PBEH and Prime Bank Foundation, all of which are envisioned to create positive impact and contribute towards the country’s economic . The intention of the partnerships is and human to synergise efforts and enable wider reach, thereby doubling the effectiveness of the projects.
Telemedicine consultation from PBEH to a patient of Vision Centre
A patient is being observed by the Opthalmic Assistant of Vision Centre, Narayanhat
Vision Centres are small, permanent facilities set up to extend eye care service delivery to remote and rural communities, with the objective of increasing the uptake of comprehensive primary
eye
care.
Through
innovative
internet-based
information technology (IT), Vision Centres provide easy and MoU signing between CCDB and PBEH
affordable online access to ophthalmologists stationed at the base hospital (PBEH).
The terms of collaboration include conducting outreach eye camps in the partners’ working areas all over Bangladesh and discounted facilities at the PBEH base hospital for all of the partner organisations’ staff and beneficiaries.
PBEH opened two Vision Centres in the rural areas of Nagori, Kaligonj, Gazipur and Narayanhat, Fatikchari, Chittagong to expand and supplement the hospital’s coverage. The Vision Centres are staffed with Ophthalmic Assistant/Optometrists, Vision Centre Coordinator and a Community Worker. It is equipped with a Slit Lamp, Auto-refract meter and other relevant eye equipments necessary for examining common eye diseases. The first of its kind in the country, telemedicine service is provided by PBEH consultants/ophthalmologists to patients using internet connectivity. Through this venture, Prime Bank Eye Hospital hopes to deliver eye care to remote areas where eye care is not readily available. The model of Vision Centre is envisaged by the Vision 2020 – The Right to Sight, a global initiative of the International Agency of Prevention of Blindness
MoA signing between PRAN-RFL and PBEH
200
(IAPB) – a global machinery working across the world for the
Similarly, Prime Bank Eye Hospital (PBEH) is also endeavouring
prevention of avoidable blindness. IAPB has unveiled a four tier
to establish corporate partnerships. The first of such linkage
pyramid model to provide eye care for the needy population
PRIME BANK A N N UA L R E P O RT 2 0 1 5
where Vision Centres are at the primary level.
Othe r I nformation
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Mr. Nader Khan, honourable Chairman, PBF inaugurating Vision Centre, Narayanhat, Fatikchari
In line with the work plan, Vision Centre, Narayanhat, Fatikchari, Chittagong was officially inaugurated on November 7, 2015. Mr. Nader Khan, honourable Director of Prime Bank Limited & Chairman of Prime Bank Foundation was the Chief Guest of the inaugural ceremony. Mr. Abu Jafor Mahmud, the UP Chairman,
dâ&#x20AC;Ąjv-Avc â&#x20AC; PK Avâ&#x20AC;Ąc Avmv dwi`v
Narayanhat, Fatikchari, Chittagong chaired the ceremony. Services at the Vision Centre will include, full eye exams, refraction and other screening, dispensing of medications and eyeglasses when necessary, care for simple ocular emergencies, referral for cataract surgery, testing for diabetes, diabetic retinopathy diagnosis, referral for treatment, and follow-up for patients and rehabilitation for the incurably blind and those with low Vision. It is hoped that these Vision Centres will provide timely access to diagnostic care and specialty eye care advice at grass root level and reduce the backlog of blindness in defined/identified/ underserved areas. Augmenting the rural healthcare delivery system by integration of low cost, sustainable, mobile technology platform into existing rural healthcare services infrastructure is also one of the major targets of the Vision Centres.
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dwi`vi mvĂżvrKvi wbâ&#x20AC;Ąâ&#x20AC;?Q GK wgwWqv KgŠx| cieZŠxâ&#x20AC;ĄZ GB mvĂżvrKviwU msevâ&#x20AC;Ą` cĂ&#x2013;Pvi Kiv nq
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Strategic Planning Workshop of PBEH
operating in 2012, reviewed the feedback and preferences provided by PBEH patients and assessed the challenges
The management team of Prime Bank Eye Hospital and Prime
and opportunities that the eye hospital is likely to face in the
Bank Foundation participated in a Strategic Planning Workshop
coming years. The result of the workshop is a 3-year roadmap
in November 2015. The participants discussed the results of the
for hospital services including outreach, internal support and
internal organisational assessment that was conducted in July
organisational development.
this year, reviewed the hospitalâ&#x20AC;&#x2122;s performance since it started
Prime Bank Foundation Executives
CSR Contribution Conducted Directly by Prime Bank During the Period Jan-Dec, 2015 Emergency Diseaster Relief:
Prime Bank distributed 1,500 pcs tents in Nepal for the earthquake affected people amount Tk. 17,10,000/- only
Donated an amount of Tk. 75,00,000/- to Prime Ministerâ&#x20AC;&#x2122;s Relief Fund for distributing blankets to the cold stiken people
Sports:
Donation of Tk. 3,98,500/- to Fahad Rahman, youngest FIDE Master of the World for attending different tournaments in India
Health & Education:
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Donation of Tk. 50,000/- to Soheli Mirja Cancer Foundation for cancer awareness
Prime Bnak donated an amount of Tk. 2,86,000/- to separate individuals for education and treatment purpose
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
THREE STRATEGIC GOALS • Access to and quality in education plays a pivotal role in a country’s economic goal to alleviate poverty and ensure growth. • Prime Bank Foundation’s scholarship programme reached all sixty four districts of the country
Goal 1
including the most remote areas. The Education Support Programme was designed to respond to the needs of the grad/post-grad level, under privileged but meritorious students of the country. With the help of the PBF stipend many of them have made an immense impact in their family, society and nation while overcoming all kinds of hurdles. • Low cost but high quality English medium education is provided to a much larger number of children through Prime Bank English Medium School in its two branches. • Prime Bank College of Nursing’s overall objective is to assist Bangladesh in providing skilled nurses who will contribute to the national development and meet the increasingly high demand of qualified nurses in different healthcare service sectors throughout the country and beyond.
Make education more accessible to the target population we work for
• Where cost is an issue, eye care is not out of reach, Prime Bank Eye Hospital (PBEH), with technical assistance from Aravind Eye Care System of India, provides a wide range of eye care services to all.
Goal 2
• In order to provide services to patients in hard to reach areas where eye-care is unavailable, PBEH has piloted two Vision Centres which use telemedicine to reach patients and provide a link between the base hospital and the remote area. Make health more accessible to the target population we work for
• Our capacity development endeavour, is envisioned to institutionalise learning processes and systematically organise sharing of information, experiences, best practice and lessons learned with our project level people and the organisation we work with.
Goal 3
• We aim to institutionalise the core values of responsible corporate citizenship into the way of doing business, to mould future businesses and to professionalise the practice of CSR. • Monitor, measure and report on the impact of the work that we do. • Implement information sharing and communication systems to lead our people and programmes. • Increas efficiency in managing organisational resources. • Continue building capacity of project staff and systems to support our target people.
Build a strong and dynamic organisation, capable of facilitating effective education, eye and other components of health programme
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
PRIME BANK CRICKET CLUB In line with the vision of Prime Bank on Corporate
well for the next six years (the tenure may be extended) in
Social
the
collaboration with Bangladesh Cricket Board (BCB) in the hope
development of Games & Sports is yet another area of focus alongside Health and Education.
that such efforts will prove beneficial for the cause of cricket. Subsequent plans involve development of an integrated cricket
Prime Bank believes that sport is an integral part
development program that has started creating a pathway for
Responsibility,
contribution
in
of national development. Not only is it a source of entertainment but it is also connected with the development of mental and physical health as well. Among a wide variety of sports, Prime Bank has chosen to focus on cricket because of its popularity and potentials to enable Bangladesh to attain a global identity as a sports nation. Therefore, as an active corporate citizen, Prime Bank has adopted the lead role for promoting cricket through consistent patronage. Beginning its journey on May 14, 2012, Prime Bank Cricket Club (PBCC) has evolved as one of the best cricket clubs of the country, securing championships in key tournaments of domestic cricket within a short span of time. PBCC was established in the hope of offering players a chance to experience the life of professional cricket and to improve their skills, while providing an opportunity to local young players an opportunity to experience international flavor. Ever since its establishment, PBCC has been endeavoring to bring about qualitative improvement in the domestic cricket arena and building a permanent platform through an infrastructure for grooming talents for the future. It has, therefore, resolved to promote national School Cricket as
continued athletic progress for promising talents. The club has achieved considerable success within a short span of time through high professionalism and efficient management which are the hallmarks of a successful cricket club. PBCC, indeed, is the gateway for the upcoming and talented root-level players to nurture themselves not only as a player but as an individual with intellectual growth to meet the ever changes and demands of the cricketing world. PBCC intends to take special care of its players by providing specialized training, quality coaching and support to help develop their fitness and competency to equip them to uplift cricket to a international standard. It is a matter of great pride for the club that some of its players are already representing national cricket team and having accomplished great feats. The winning legacy of PBCC continued in 2014-2015 session where the team displayed incredible performance which endured championship in two consecutive years in Bangladesh Cricket League (2014 and 2015) within only three years of the clubâ&#x20AC;&#x2122;s cricket journey. Another milestone achievement of the club in 2014-2015 was winning the championsâ&#x20AC;&#x2122; title of the Dhaka Premier Division Premier League, the most prestigious
Inauguration of Prime Bank Young Tigers National School Tournament
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
the Bangladesh Cricket Board attended as the Chief Guest and Mr. Shirajul Islam Mollah, President of PBCC and Director Prime Bank were present as the Special Guest. In order to retain the winning streak of PBCC, the club aspires to provide an enabling environment for participation, learning and achieving, which is underpinned by the club’s values and strong leadership. Rigorous effort, determination and skill are required to reach the apex of excellence and PBCC hopes to reach the pinnacle of success by utilizing all the resources at its disposal to make a mark in the field of cricket.
Champions of the BCL, exhilarated after their victory. and competitive cricket league of the country. Not losing a single match in the BCL and outplaying their rivals through their indomitable spirit is the testimony of prowess on PBCC in the longer version of cricket. In order to commemorate the team’s immense achievements ‘Celebrating the Victors’ was held at the International Convention City Bashundhara on 12 September 2015. Mr. Nazmul Hasan Papon, Member of Parliament and President of
Celebrating the Victors
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
GREEN BANKING REPORT
Green Banking Concept The word green banking has been conceptualized to implement the broader concept like sustainable development. Sustainable development is development that meets the needs of the present without compromising about the ability of future generations to meet their own needs. Green banking means operating banking business in such a fashion that proper and adequate attention is allocated in social, ecological and environmental factors of environment by minimizing conservation of nature and natural resources.
Importance of Green Banking The environment and climate change effect on human existence as well as the planet are now a global concern because the changes have direct impact on biodiversity, agriculture, forestry, dry land, water resources and human health. The key areas of environmental degradation cover air pollution, water pollution and scarcity, encroachment of rivers, improper disposal of industrial chemical and house-hold waste, deforestation, and loss of open space and loss of biodiversity. Human activities and natural events are responsible for increasing average global temperatures and primarily by increases in “greenhouse” gases, such as Carbon Dioxide (CO2). A warming planet thus leads to a change in climate which can affect weather in various ways. Global warming and climate change refer to an increase in average global temperatures. Climate change is already beginning to transform life on Earth. Around the globe, seasons are shifting, temperatures are climbing and sea levels are rising. And meanwhile, our planet must still supply us - and all living things- with air, water, food and
206
a safe place to live. If we don’t act rightly, the climate change will rapidly alter the lands and waters and then we have to leave our children and grandchildren in a very challenging situation. Climate change in Bangladesh is an extremely crucial issue and according to National Geography, Bangladesh ranks first as the most vulnerable nation to the impacts of climate change in the coming decades. Being a responsible corporate citizen and in line with the instructions of Bangladesh Bank, Prime Bank Limited has taken initiatives to formulate its Green Banking Policy with an aim to inculcate practices towards optimum usage of natural resources and make every effort for environmental friendly activities. The context in which banks operate is constantly changing. Although banks directly do not impact the environment much through their own ‘internal’ operations, in view of the relationship between the banking sector and the firms who are users of banks’ products, the ‘external’ impact on the environment through these entities is substantial. Hence, by considering social, environmental and ecological factors, banks can induce responsible investment and prudent lending. Green banking initiatives are necessary to keep the environment green and to minimize greenhouse effects, dependency on traditional energy, natural Gas as well as reduce the water/ environment pollutions in Bangladesh.
Bangladesh Bank’s initiatives The newly established Sustainable Finance Department of Bangladesh Bank is engaging and encouraging all banks and FIs to step-up their green banking initiatives and standards.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
The necessary policy guidelines and work plans for banks
already formed Green Banking Division under direct supervision
and FIs have been put into effect by the central bank
of DMD and Chief Business Officer for overseeing the overall
which encompasses Policy formulation and governance, Incorporation of environmental risks into CRM (credit risk
green banking activities of the bank. There is a separate Green
management,
Banking Working Committee comprising of different divisional heads for implementing green banking activities.
Introduction of sector-specific green finance, Creation of
As per GBCSRD Circular No. 08 dated December 24, 2013 the
a climate risk fund, Capacity building through training and
Risk Management Committee (RMC) of the Board shall review
awareness and Periodic reporting on green banking practices.
the Bank’s green or environmental policies, strategies and
Moreover, Bangladesh Bank also offers low-cost refinancing
program for governing the overall green banking activities of
facilities for clients engaged in various green banking activities. Besides, development partners are also keen to invest in this
the Bank.
sector with flexible terms and tenors. For example, Asian
Green Banking Policy of Prime Bank
management),
In-house
environmental
Development Bank (ADB) has been supporting Refinance Scheme for Brick Kiln Efficiency improvement since 2012.
In line with Circular No. 02 dated February 27, 2011 of Banking
As a regulatory body of the Banking sector, Bangladesh Bank introduced Environmental Risk Management (ERM) framework for banks and FIs in 2011. The framework includes the environmental risk factors for ensuring the sustainable development and protection of the surroundings from further deterioration. ERM aims at ensuring the habitable environment and reducing climate change.
Regulations & Policy Department, Bangladesh Bank; Prime Bank Limited outlined a comprehensive Green Banking Policy for implementing Green Banking activities. During the year 2014, a revised Green Banking Policy was approved by the Risk Management Committee of the Board. Subsequently, during the year 2015 an amended Green Banking Policy was approved by the Board in its 437th meeting held on August 29, 2015 and circulated vide instruction circular.
In 2011, Bangladesh Bank also introduced Green Banking Policy for all banks. The policy guidelines segregated the Green Banking activities into 03 (three) phases for implementation. Deadline of phase I was December 31, 2011; Phase II was December 31, 2014 and Phase III is June 30, 2015. To promote Green Banking, Bangladesh Bank has declared the following preferential treatments for the compliant banks: Points to be awarded on management component while computing CAMELS rating resulted ultimately in overall rating of the Bank;
Top 10 (ten) Banks’ name will be declared in the Bangladesh Bank website.
Consideration will be given while according permission for opening new Branch of the Bank.
Bangladesh Bank also, vide GBCSRD Circular No. 04 dated September 04, 2014 instructed all scheduled banks to allocate 5% of its total funded disbursed loan for Direct Green Finance under 50 (Fifty) refinancing scheme product of Bangladesh Bank.
Prime Bank’s commitment Prime Bank Limited believes in eco-friendly socially responsible banking system which drives the whole nation towards a healthy environment and presents an excellent and hazardless banking. In order to protect the environment, Prime Bank Limited is spreading its wings by introducing both in-house & external Green activities towards supporting Green Economy. Energy efficient in-house Management through reduction of energy & resource consumption such as reduction of use of paper, maximum use of day light and environment friendly business activities by financing to renewable energy. Prime Bank Limited’s Green banking activities are day by day flourishing towards creating a “Greener” future for the welfare of the society. For a sustainable economy Prime Bank Limited plays crucial role in financing environment friendly projects led by green banking that believes in social responsibility. In compliance with Bangladesh Bank guidelines, Prime Bank has
Green Office Guide of Prime Bank As part of Prime Bank’s continuous effort of positively upholding the Green Banking initiatives, during the year 2015 the Bank developed Green Office Guide version II as a general guideline to facilitate the Green Banking objectives of the Bank. The modified Green Office Guide comes with pictorial demonstration for better understanding of the readers.
Incorporation of Environmental Risk in Credit Risk Management Prime Bank recognizes that its financing decisions have a potential impact on people and the environment. In this regard, Prime Bank has incorporated the Environmental Risk Management Policy in its Credit Risk Management Policy as part of environmental due diligence. Incorporation of environmental assessment of the borrowers has improved CRM principles significantly. Prime Bank has a strong and longstanding commitment to manage environmental risks associated with commercial lending. The number of projects eligible for Environmental Due Diligence (EDD) and Projects being rated (i.e. Environmental Risk Rating - Env RR) has been increasing appreciably over time. Environmental risk rating is an integral part of the credit appraisal process. The prudent Credit Risk Management team has put up an efficient end to end process for the appraisal of borrowers. Bangladesh Bank vide ERM Guideline stated that Environmental risk rating is to be done for all individual customers (corporate, institutional, personal, small and medium enterprise) whose aggregate facilities are above the following financing thresholds:
Small and Medium Enterprises (SMEs) financing > BDT 2.5 million
Corporate financing > BDT 10 million
Real estate financing > BDT 10 million.
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In 2015, 192 borrowers have been environmentally risk
introducing online Banking and it covers 145 branches. All the
rated. All the eligible corporate and SME clients fall
145 branches of the Bank are providing online banking facilities
under the purview of this rating.
through its core banking system namely “Temenos T24”. Fund
Environmental and Social Risk Management in Prime Bank
Transfer to Other bank’s Accounts through BEFTN has been made available through Online Banking for the Consumer Banking Customers. As a result, customers can execute fund transfer through paperless and automated Online Banking over
The bank has appointed Environmental and Social Risk
internet to any other account in Bangladesh.
Manager as custodian of environmental and social risk
Prime Bank Limited has also offered a safe and convenient
management policies and procedures. This individual is responsible for development, review, and administration of
Internet Banking, which is accessible 24/7. By using real-time
E&S risk management system in the bank.
internet banking our customers can avail the services like Balance enquiry, View account statement, View loans & deposit of their own, Mobile & Utility Bill Payment.
Major In house Green Banking Initiatives taken by Prime Bank Ltd Several initiatives have been taken by the Bank with a view to practice Green Management in the offices. Efficient use of resources, reduction of waste, saving energy and money shall definitely improve our working environment. Some major Inhouse Environmental Management initiatives are as below: Solid waste management: 3R approach (Reduce, Reuse and Recycle) has been advised for lowering solid waste. However, careful management and disposal of solid waste has been advised. Energy & water management: The Bank has advised the officials to adopt energy and water efficient practices. The officers have been advised to put emphasis to ensure efficient use of gas, fuel, electricity and water with a view to reduce carbon emission. Energy efficient equipments like energy saving bulbs, products with ecofriendly features are being used in the office. Energy saving T5 lights is being introduced in office premises. Paper Consumption Management: Green Printing Guideline is an integral part of our Green Office Guideline which is being circulated among all employees. Internal communications are done through emails. All staffs have dedicated email IDs for office use. Customer communications are being done through emails, SMS or ATM displays. Use of scrap or one side used papers for note pad has become usual practice in the workplace. One side used papers are also used for printing draft copies of the office assignments. Renewable Energy Usage: Up to year 2015, the Bank has installed solar panels at 21 branches as well as at 13 ATM booths and SME unit offices as part of its commitment to the usage of renewable energy resources. Green Travel: Prime Bank always encourages the officials to consider the following green approaches while travelling:
In addition to the Bank’s own 168 ATMs, the Bank has joined National Payment Switch Bangladesh (NPSB) network during the year 2014, which enabled the Debit Cardholders of the Bank to enjoy cash withdrawal facility from other ATMs under NPSB Network. Prime Bank has used the BACH and BEFTN mechanism for convenient payment activities which to a great extent supports the concept of green banking.
SMS banking facilities offered by Prime Bank Prime Bank brings SMS Banking services to ensure instant access to your account information at any time. Any mobile phone user having account of Prime Bank can get the service through the mobile phone upon registration. By using SMS banking our customers can avail the services like Balance Enquiry, Mini Statement, Exchange Rate, PIN Change etc. There is a detail procedural guideline in the Bank’s official website regarding how to obtain different SMS banking services.
Biometric Smart Card based alternate banking service offered by Prime Bank Prime Bank Limited in collaboration with Dipon Consultancy Services introduced a Biometric Smart Card based alternate banking service in the brand name “Prime Cash” for the unbanked rural and urban people to address their banking and payment needs. Prime Cash offers day long banking hours (12 hours) through Prime Cash Service Point which has a countrywide network. Most importantly, it will provide a fast, safe and simple mechanism for the un-banked men/ women across Bangladesh in all municipalities and upazilas. The services that can be obtained through Prime Cash are: Account Opening, Deposit, Withdrawal, Local Money Transfer,
Encourage employees to use Public Transport/Carpool Program.
Inward Foreign Remittance, DPS, Prime Bank ATM Facility, Mobile Recharge, Salary Disbursement, Balance Inquiry, and Mini Statement.
Encourage employees to use eco-friendly energy for private vehicles.
Cash Back Service offered by Prime Bank
Online Banking and Internet banking facilities offered by Prime Bank Online banking system is a great way to reduce paper consumption. Prime Bank has been one of the pioneers in
208
Automated Teller Machine (ATM)
Cash Back Service allows the debit cardholders of the Bank to meet instant requirement of cash through POS terminals of selected merchant points while shopping. Cash Back service meets instant requirement of cash which ultimately increase customer satisfaction.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Capacity Building Prime Bank
Othe r I nformation
initiatives
taken
by
As part of Green Marketing, we commenced the mandatory use of jute in product packaging. Prime Bank Limited has been using
Internal training
Human Resource Training & Development Center of the Bank arranged 12 Green Banking training Programs for 335 employees during the year 2015 to familiarize with the Green Banking aspects.
Green Marketing performed by Prime Bank
Human Resource Training & Development Center of the Bank arranged a training namely “Remediation
its official website for advertising new products as well as the features of existing products to capture the market and also it will penetrate to get new customers. Prime Bank Limited also convey the various offers of different Credit Cards through SMS.
Financing in Green projects by Prime Bank
Financing for Bangladesh RMG sector” on 1 June, 2015
Green financing could be one of the suitable opportunities
for 30 employees of the Bank where main resource
to diversify the bank’s business. It is also sensible initiative
person was Dr. Afifa Raihana, Sustainable Finance Specialist of IFC.
to keep our environment better. Prime Bank is committed to promote sustainable growth in the economy. Bangladesh
st
Human Resource Training & Development Center of the Bank arranged a training namely “Environmental and Social Risk Management” during 07-09 June, 2015 for 90 employees of the Bank where main resource person was Mr. Milan Tomik, Senior Consultant of FI Konsult, Czech Republic.
Prime Bank Limited arranged a workshop on ‘Green Banking’ held on 13th June 2015 at its Head Office, where Khondkar Morshed Millat, Deputy General Manager, Green Banking & CSR Department of Bangladesh Bank was the resource person. 26 Officials/executives of different divisions of head office and branches of the Bank participated in the workshop.
External training
Three (03) officials of the Bank attended one external training program on GRI G4 Certified Training Course on “Sustainability Reporting” held in Malaysia during 04-06 August, 2015.
Two (02) officials of the Bank attended one Workshop on Investment in energy efficient brick manufacturing project organized by IDCOL on 23rd April, 2015.
Two (02) officials of the Bank attended one Workshop on “Sustainability Reporting as per GRI Guideline” organized by SR Asia on 6th October, 2015.
One (01) official of the Bank attended a training course on Green Banking organized by BIBM during 15-18 June, 2015.
Green Event organized by Prime Bank Prime Bank Limited observed World Environment Day on June 05 by plantation trees all over the country. To mark the occasion, Ahmed Kamal Khan Chowdhury, Managing Director of Prime Bank planted a tree in Gulshan Branch premises and distributed trees to some officials of the bank. Deputy Managing Director & Chief Business Officer Md. Touhidul Alam Khan along with other officials from head office & Gulshan Branch were present on the occasion. Besides, to commemorate the day, the branches of Rajshahi, Baneswar, Natore, Pabna, Rangpur, Dinajpur, Thakhurgaon, Bogra, Sherpur, Joypurhat, Naogaon, Mohadevpur and other branches of Prime Bank around the country planted trees in their branch premises and other areas.
Bank has launched 50 lending products to support green and efficient energy projects. Prime Bank has financed various projects which are environment friendly. During 2015, the bank has extended credit facility for vermi-compost production in Jessore. Moreover, the Bank has financed an amount of BDT 6,467.72 million in 22 projects having ETP. To explore new ventures in environment friendly projects, the Bank has conducted several field visits, meetings with existing and prospective entrepreneurs, consultants and Central Bank officials. The outcome is positive and we aspire to see the fruition of this endeavor.
Disclosure and Reporting of Green Banking Activities Green by Prime Bank Prime Bank has been regularly reporting its Green Banking Activities to Bangladesh Bank on quarterly basis since 2011. In view of highlighting our Green Banking activities and creating awareness amongst the stakeholders, a separate section has been incorporated in our Annual Report. Moreover, there is a detail section namely “Sustainable Finance” in Bank’s official website for disclosing our Green Banking activities.
Management Approach towards Green Banking The Bank’s continuous effort to uphold Green Banking serves as the fundamental base for reduction of carbon footprint impact. The Bank has been vigorously supporting sustainable Green Finance. The Bank adopts processes to assess the environmental and social risks and opportunities arising from its clients’ business activities and manages the Bank’s exposure to reduce its own carbon foot print on the environment as per Environmental Conservation Rules (ECR) 1997 and Environmental Risk Management (ERM) Guidelines of Bangladesh Bank.
Way Forward Prime Bank is committed to build a sustainable business that brings benefit to the society, environment and the economy of Bangladesh. Some future planning regarding Green Banking arei.
Increase of both Direct and Indirect Green Financing. Special emphasizes to be given on Bangladesh Bank’ enlisted existing 50 Direct Green Finance products and the upcoming Direct Green Finance products.
ii.
Creating Climate Risk Fund for supporting the
209
O t h er I n fo r m a t i o n
environmental disaster like flood, cyclone. Prime Bank shall finance in the affected areas at the regular interest rate without charging additional risk premium. Regular financing flows shall also be ensured in these vulnerable areas and sectors. iii. Organize Green Events like observing World Earth Day, World Environment Day etc. iv. Nowadays, Alternative Delivery Channel (ATM, Debit / Credit Card, Internet Banking, BACPS, BEFTN, SMS Banking, Bio-Metric Smart Card, Cash Back service) are ensuring modern Banking facilities and PRIME BANK will introduce more creative services through Alternative Delivery Channel. v.
The Bankâ&#x20AC;&#x2122;s remote branches will join meeting through Video Conference rather than physical visit.
vi. Already solar panels have been installed in some of our branches, ATM booths & SME Unit Offices and we are expecting to expand the volume. vii. Continuously monitor the inventory details such as consumption of water, paper, electricity, gas, fuel etc. to reduce the consumption of the same and ultimately protecting the environment. viii. Arranging Training/Workshop related to Green Banking for our employees on continuous basis. ix. Arranging more seminars to create customer awareness regarding Green Banking as well as to avail Green Products.
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PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
EMPLOYEE REPORT
Motivated and engaged employees Prime Bank has a diverse group of motivated and engaged employees. From experience it knows that if employees are properly empowered, they become more engaged and go the extra miles to fulfil the organizationâ&#x20AC;&#x2122;s ambition. Engaged employees are likely to take more responsibility and embrace accountability which helps to achieve the sustainability strategies. The Bank has positioned itself with a performancedriven rewarding work culture; where employees are treated with respect and receive plenty of development opportunities. Prime Bank has a special focus on:
Ensuring a balanced diversity
Promoting human capital development
Providing competitive compensation and benefits
Promoting a performance centric culture
Protecting human rights
Ensuring workplace health and safety
Ensuring equal opportunity
All the people related issues in Prime Bank are governed by the well-defined policies and procedures which are duly reviewed by the Management time to time.
Diversity in Workplace Prime Bank believes that diverse, heterogeneous teams generate greater creativity, innovation and business development. An inclusive culture maintains and drives workforce diversity by fostering the exchange of ideas and
collaboration among individuals and across groups. To speak simply, our constant success depends in part on maintaining a plurality of perspectives.
Employees by age group and gender: Age group
Grand Total
Less than 30 years
%
481
16.39%
30 to 50 years
2,311
78.77%
Over 50 years
142
4.84%
2,934
100.00%
Grand Total
We practice equal employment opportunity; for competent candidates regardless of their gender, age, locality or ethnicity. While recruiting fresh graduates, the Bank sources the pool from different recognized public and private universities; with a view to creating a diverse work force.
Employees by religion: No. of Employees
Percentage
Islam
Religion
2,717
92.61%
Hindu
206
7.02%
Buddhist
11
0.37%
Christian
0
0.00%
2,934
100.00%
Total
Besides, our ration of male and female employees has been increasing over the time. Currently, approximately 21.00% of total employees are female. On the other hand, 25% of the Board of Directors represents females.
211
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
In Prime Bank, the employee development plan is based on
Gender diversity among employees: Gender Male Female Total
No. of Employees
Percentage
2,299
78.36%
635
21.64%
2,934
100.00%
proper training need assessment. In 2015, Bankâ&#x20AC;&#x2122;s internal HR Training and Development Centre arranged training on different topics for 2,891 enthusiastic participants. Besides, a total of 271 employees were sent to participate in various training programs/conferences in home and abroad. The banking sector is complex and diverse with evolving nature of threats and the risks. So, the training module is updated time
Increasing percentage of Female over the years: Year
% of Female Employees
2011
18.59%
financial market.
2012
19.77%
2013
20.52%
Compensation & Benefits
2014
21.00%
To maintain the market competitiveness, the compensation
2015
21.64%
and benefits of Prime Bank are regularly reviewed through market and peer group study. The well-crafted total rewards help the Bank to attract, motivate and retain talent.
Gender diversity among Board members: Gender Male Female Total
No. of Members
Percentage
15
75%
5
25%
20
100%
New recruitment by gender and age: Gender
No. of Employees
Percentage
Male
155
74.16%
Female
54
25.84%
209
100.00%
Total Age group
Grand Total
Percentage
Below 30 years
78
37.32%
30 to 50 years
124
59.33%
Over 50 years
7
3.35%
209
100.00%
Grand Total
Employee turnover by gender and age:
In PBL, the Board of Directors is not eligible for any compensation. They are paid honorarium for attending meetings only. On the other hand, all employees are paid competitive remuneration package. The remuneration policy of the Bank does not allow any discrimination between male and female employees. In addition, employees are paid bonus based on yearly business performance. In addition to monthly competitive base pay and a good number of allowances (e.g., House Rent allowance, Medical allowance, Conveyance allowance etc.), Prime Bank has variety of marketcompetitive Benefits schemes designed to motivate the employees. The various cash and non-cash benefits include: Company provided car for top level Executive employees
Car allowance for all Executive level employees
Leave fair assistance allowance
Medical treatment allowance
Maternity benefits
Car loan facility
House loan facility
No. of Employees
Percentage
Staff loan at reduced interest rate
Male
119
85.61%
House furnishing allowance
Female
20
14.39%
139
100.00%
Mobile phone allowance
Total
Travel allowance
Gender
Grand Total
Percentage
Technical allowance
Below 30 years
36
25.90%
Festival bonus
30 to 50 years
84
60.43%
Allowance for employeesâ&#x20AC;&#x2122; meritorious students
Over 50 years
19
13.67%
Annual leave
139
100.00%
Maternity leave
Study leave etc.
Age group
Grand Total
For the year 2015, the turnover rate is 4.93%.
Learning & Development In Prime Bank, Human Resources (HR) Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment. Prime Bank believes that continuous efforts should be given so that employees acquire and develop the right set of skills required to face the challenge of ever changing market.
212
to time for employees of the Bank in the changing context of
The Bank also provides long-term as well as retirement benefits to employees:
Leave encashment
Provident fund
Gratuity benefit
Retirement benefit
Partial and full disability benefit
Death benefit to family members etc.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Othe r I nformation
Broadbanding Pay Structure
50 female employees availed Maternity leave. After completion
The Management introduced Broadbanding Pay Structure
of the leave, they returned to work and are still continuing with the organization.
which aims to ensure a performance driven work culture through a strategic compensation plan synced with the performance of individual employee. Since inception, Prime
Culture
Bank has practiced a scale based pay structure for each grade,
Culture plays a vital role to create a high performance
so to reward individual performance the new policy offers a
environment
flexible pay plan that will compensate the person, not the grade. It places an increased emphasis on encouraging employees
implementation. Prime Bank carefully develop, shape and impact organizational culture by: practicing values appropriate
to develop new skills and paying for the skills according to their contribution and equity. In a nutshell, broadbanding is a
for the bank; defining working relationship and communication
more flexible pay system for both the employees and for the
and regulations which control employeesâ&#x20AC;&#x2122; behaviour; promoting
employers where career progression takes a different route.
a strong employer brand through which employees identify
Given that, the specific reasons behind introduction of this new
(Through Job Rotation)
with the organization; maintaining effective reward system that affects employees loyalty and empowering employees to demonstrate their innovativeness not only to be competitive in the market but also to achieve a sustainable growth.
It rewards performers than the non performers (Through Pay for Performance)
Healthy and Safe Work Environment
pay structure is: 1.
2.
3.
It
facilitates/encourages
internal/lateral
movement
It puts added trust & greater autonomy in line management (Through Teamwork/Relationship)
Moreover, the policy states that when one employee reaches the highest grade within a Band, the employee will grow further when he/she is ready to take or has taken higher responsibilities and match the criteria of the next Band. The total compensation and benefits system of Prime Bank tracks costs and is linked with performance, while maintaining a balance with the business affordability.
Performance Management Program Prime Bank has a comprehensive performance management program that evaluates employeesâ&#x20AC;&#x2122; yearly performance against business targets at the year-end. In addition, their functional and leadership competencies are also rated by the line management. This appraisal process also identifies the competency gap and training needs of employees. All employees (except employees under probation or training) of the Bank undergo annual performance appraisal process. The process ensures that clear feedback on improvement points (performance and professional capabilities) is provided to employees by their Managers to promote employeesâ&#x20AC;&#x2122; long-term career development and improved contribution to organizational performance. All regular employees undergo the annual performance and career development review.
Work-life Balance Prime Bank wants it employees to balance the work and personal life and has organization-wide practices and policies that actively support employees to achieve success at both work and home. Management is also open and shows flexibility in regard to a balanced work-life. In Prime Bank, employees are entitled to sufficient annual leave and sick leave with pay. To enjoy vacation with family, Bank provides Leave Fare Assistance Allowance to employees. All female employees are eligible for Maternity Leave (Parental Leave) with pay for a period of six months. In 2015, a total of
that
supports
sustainability
strategy
pattern between superior and subordinates; governing rules
In Prime Bank, the physical, mental and social well-being of the employees always get priority. Healthy, productive and motivated employees are the foundation of a successful organization. Prime Bank helps employees to assume responsibility for their own personal behaviour in health-related matters, and support health-promoting general conditions within the Company. We continuously focus on improving health and safety of employees that includes proper work place design and decoration of head office and branches, maintaining the cleanliness at work space, holding awareness session related to physical and psychosocial well-being, email communication on various health and safety related topics, sending alerts to employees on emergency situations, arranging fire drill sessions, financial support for medical care etc. Because of the nature of operations, Bank employees are not usually exposed to work-related injury, occupational diseases or fatality. Yet, the Bank remains cautious so as not to create any hazardous work condition.
Decent Workplace Prime Bank has a decent work environment where employees can work with dignity, have the freedom to express opinions, can participate in the decision making process that affect their lives, and receive equal treatment and opportunity. The Bank is committed to ensure the best practices in compliance with the labour code of the country. Bank Management believes that the business can grow favourably if the organization enables employees through creating and maintaining a decent workplace. In Prime Bank, employees have the right to exercise freedom of association or collective bargaining following the legal procedure of country laws. However, employees have never formed or wanted to form any collective bargaining agency. The Bank follows non-discriminatory approach in all HR policies and practices. The salary of an employee is determined based on his/her competency, experience and performance. During the period of 2015 neither any incident regarding discrimination nor any grievance related to labour practices nor human right
213
PRIME BANK A N N UA L R E P O RT 2 0 1 5
O t h er I n fo r m a t i o n
has been reported. The Bank neither employs child labour nor
opportunity to build greater trust among employees and
has any provision for forced labour. Employees have the right
management in discussing issues of mutual interest. To ensure effective employee communications, management takes a
to resign from their employment serving proper notice period and following the internal procedures. Ensuring a decent workplace also encompass Bankâ&#x20AC;&#x2122;s investment decisions as well as agreements with the suppliers
The Management has introduced a Whistleblower Protection
and contractors. For instance, human right, as appropriate,
and others to raise serious concerns internally so that the
is covered as an integral part of decision making for major
Management can address and correct inappropriate conduct
financial investments. Among all the significant investments,
and actions. Employees have an avenue to report concerns about violations of code of ethics or suspected violations
garments and manufacturing industry contain major stakes where issues related to human rights are more relevant and
Policy which intendeds to encourage and enable employees
of law or regulations. The policy covers the protection of a
critical. Hence, any such investment agreement is subject to
whistleblower in two important areas - confidentiality and
screening of human right issues along with other criteria.
against retaliation. An employee who retaliates against
On the other hand, all the agreements of Prime Bank with
someone who has reported a violation in good faith is subject to discipline up to and including termination of employment.
suppliers or contractors undergo due assessment process which requires complying with Labour Code and other applicable laws of the country. Moreover, the procurement decisions are also subject to conformity with International Labour Conventions. The team involved in procurement visits suppliers and contractorsâ&#x20AC;&#x2122; premises on need basis to monitor working conditions and other relevant issues like labour practices, human right etc. The security personnel employed by the Bank are formally trained and aware of policies and procedures regarding human right issues. The training requirement also applies to third party organizations that provide security personnel to the Bank. The most recent addition to encourage female employees at the workplace is that they are now able to avail child day-care facility in Motijheel area. Female employees having offices in Motijheel and peripheral area now can avail child day-care facility where they can keep their children in a safe and secured environment. This will not only help to retain female employees but will relieve them of the dilemma of leaving their child/ children at home.
Openness in communication for a better employee-management relation Employee communications and consultation are the lifeblood of any business. Proper exchange of information and instructions helps the Bank to function more efficiently and provides the
214
positive lead.
Additionally, now there is an avenue to report sexual harassment in the workplace. The policy aims to ensure a working environment in line with our values, where all individuals are treated equally, fairly and with dignity and also foster compliance with governing laws pertaining to sexual harassment. Such policy creates awareness about the nature of offences and the consequences of an offender. This not only fosters a neutral environment but gives a feeling of assurance that any wrong doing will be strictly addressed by the Management. In addition to day to day regular communication, Prime Bank has arranged a Town Hall Meeting for 2015 on 12th December, 2015 for the employees of Dhaka Division to discuss on the contemporary issues on Centralization and Broadbanding. Such meeting is a first for Prime Bank Limited and it has allowed employees with the opportunity to interact with the top Management and place their concerns regarding the recent changes. This sort of initiative helps to build an improved management-employee relation as it creates an avenue for one to one interaction. Any operational changes are properly planned and managed. Management follows a participative approach during any major transformation followed by prior communication to the employees. Since there is no trade union or employee association, no notice period regarding operational change is stipulated by any collective agreement.
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
SHAREHOLDERSâ&#x20AC;&#x2122; INFORMATION
215
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
04
SHAREHOLDERS’ INFORMATION
Distribution of Shareholdings in 2015 Number of Shares
Types
2015
% of Shares
2014
2015
2014
Sponsors
4,052,540,94
417,229,033
39.37%
40.53%
Financial Institutions
2,602,745,66
225,681,418
25.29%
21.92%
Foreign Investors
38,472,82
14,055,207
0.37%
1.37%
Non- resident Bangladeshi
29,691,77
3,991,569
0.29%
0.39%
3,570,034,97
368,391,389
34.68%
35.79%
1,029,348,616
1,029,348,616
100.00%
100.00%
General Public Total
General Public, 34.68%
Sponsors, 39.37%
Sponsors Financial Institutions
Types of Shareholding
General Public Foreign Investors
Non-resident Bangladeshi, 0.29% Foreign Investors, 0.37%
Non-resident Bangladeshi Financial Institutions, 25.29%
Shares Held by Directors in 2015 Sl
Name of the directors
1
Mr. Azam J Chowdhury (Representative of East Coast Shipping Lines Ltd.)
Chairman
Opening position
Closing position
20,601,158
Change
20,601,158
0.00% 0.00%
2
Mr. Khandker Mohammad Khaled
Vice Chairman
28,570,378
28,570,378
3
Mr. M. A. Khaleque
Vice Chairman
21,846,820
21,846,820
0.00%
4
Quazi Sirazul Islam
Director
20,616,158
20,616,158
0.00%
5
Mr. Md. Nader Khan
Director
38,019,361
38,019,361
0.00%
6
Mr. Md. Shirajul Islam Mollah
Director
20,644,922
20,644,922
0.00%
7
Mr. Mafiz Ahmed Bhuiyan
Director
20,591,099
20,591,099
0.00%
8
Mr. Md. Shahadat Hossain
Director
27,811,583
27,811,583
0.00%
9
Mrs. Marina Yasmin Chowdhury
Director
20,882,328
21,132,328
1.20%
10
Mrs. Nasim Anwar Hossain
Director
23,365,749
23,365,749
0.00%
11
Mrs. Salma Huq
Director
32,254,341
32,254,341
0.00%
12
Mr. Nafis Sikder
Director
25,826,178
25,826,178
0.00%
13
Mr. Imran Khan Mr. Waheed Murad Jamil
Director
20,588,337
20,588,337
0.00%
Director
-
20,587,749
100.00%
Director
-
20,600,391
100.00%
Director
20,760,250
20,760,250
0.00% -
14
17
(Representative of Mawsons Limited) Mr. Tarique Ekramul Haque Mr. Mohammad Mushtaque Ahmed Tanvir (Representative of Uniglory Cycle Industries Ltd.) Mr. Shamsuddin Ahmed, Ph.D
Independent Director
-
-
18
Dr. G.M. Khurshid Alam
Independent Director
-
-
-
19
Mr. M. Farhad Hussain, FCA
Independent Director
-
-
-
20
Mr. Ahmed Kamal Khan Chowdhury
15 16
Total
216
Status
Managing Director
-
-
-
342,378,662
383,816,802
12.10%
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
Redressal of Investors’ Complaint
Complaints are treated efficiently and fairly;
Prime Bank Limited is strongly committed to equitable treatment
PBL employees work in good faith and without prejudice, towards the interests of the investors.
of every shareholder, whether they are major or minority shareholders, institutional investors, or foreign shareholders. To ensure equal treatment of all shareholders the bank created various mechanisms, such as: Shareholders who are unable to attend the shareholders’ meeting,
Way of Redress Investor Complaints
Investor can complain through email info@primebank. com.bd;
the bank provide proxy forms which allow shareholders to specify their vote on each agenda. The proxy forms, which are
An Investor can make a written complaint through letter;
in accordance with the standard format, are sent along with the annual report.
The Company maintains investor grievance file in which
The shareholders’ meetings proceed according to the order of the agenda, without adding new and uniformed agenda, in order
to give the opportunity to shareholders to study the information on the given agenda before making a decision. Moreover, there are no changes to the important information in the shareholders’ meeting. The bank sees the importance of the consideration of transactions which may have conflict of interest or may be connected or related transactions, and abides by good corporate governance principles, including the rules and regulations of the Bangladesh Securities and Exchange Commission and the Dhaka Stock Exchange and the Chittagong Stock Exchange transactions, Directors, management and those who are related persons do not participate in the consideration to approve such transactions. The bank provides a channel for minority shareholders to propose issues deemed important and appropriate to include in the agenda of the bank’s annual general meeting of shareholders and to nominate candidates with appropriate knowledge, abilities and qualifications to be considered for the position of Director. Complaint redressal is supported by a review mechanism, to minimize the recurrence of similar issues in future.
PBL follows the following principles:
Investors must be treated fairly at all times;
Complaints raised by investors must be dealt with courtesy and in a timely manner;
Investors are informed of avenues to raise their complaints within the organization;
full detail of every written complaint shall enter; We have 3 designated person look after the investor grievances in due time;
The full detail of the written complaint must be passed to the concerned department and inform the compliance officer of the Company as soon as it is received;
A letter or email must be written to all the investor who have submitted written complaints by the designated person or Compliance Officer acknowledging receipt of the complaint and informing them it will be dealt with;
Audit & Compliance Department will obtain all information available on the complaint
which is considered necessary for a proper investigation, look into all the necessary information and resolve these soon as possible;
The bank continues to have regular communication with the shareholders through periodic updates of performance and at any other time when it believes it to be in the best interest of shareholders generally.
Investors’ inquiries / Complaint Any queries relating to shareholdings for example transfer of shares, changes of name and address, and payment of dividend should be sent to the following address:
Share Department Sarker Mansion (8th Floor) 29, Rajuk Avenue, Dhaka – 1000 Phone: 9567265/261
217
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Financial Highlights - Group & PBL Prime Bank Limited Performance during the year
2015
2014
Taka in
Taka in
million
million
Group Change %
2015
2014
Change
Taka in
Taka in million
million
%
Interest income
15,551
18,446
-15.70
15,567
18,468
-15.71
Profit before provision and tax
5,906
6,157
-4.06
5,946
6,228
-4.52
Provision for loans and assets
3,154
2,877
9.66
3,140
3,075
2.09
Profit after provision before tax
2,752
3,280
-16.10
2,807
3,152
-10.97
613
887
-30.91
634
907
-30.12
2,139
2,393
-10.61
2,173
2,246
-3.23
Tax including deferred tax Profit after tax At the year end Total shareholders' equity
26,415
24,461
7.99
26,504
24,582
7.82
Deposits
194,825
204,838
-4.89
194,815
204,804
-4.88
Loans and advances
151,865
147,367
3.05
154,871
152,719
1.41
62,733
72,642
-13.64
64,631
74,496
-13.24
Investments Property, plant and equipment Total assets
6,516
6,613
-1.46
6,541
6,649
-1.61
252,161
254,912
-1.08
253,474
256,349
-1.12
Statutory Ratios (%) Cash Reserve Ratio Statutory Liquidity ratio Capital adequacy ratio
7.04
6.71
0.33
7.04
6.71
0.33
33.18
29.83
3.34
33.18
29.83
3.34
12.74
12.71
0.03
12.69
12.68
0.01
Share Information 2.08
2.32
-10.34
2.11
2.18
-3.21
Dividend (%)
Earnings per share (Taka)
15.00
15.00
0.00
15.00
15.00
0.00
Net assets value per share (Taka)
25.66
23.76
7.99
25.94
23.88
8.62
Ratios (%) Non performing loans
7.82
7.61
0.21
7.67
7.34
0.33
Return on average shareholders' fund
8.41
9.78
-1.37
8.51
9.37
-0.86
Return on average assets
0.84
0.94
-0.10
0.85
0.89
-0.04
4.08%
8.12%
2.58%
7.87%
6.40% 4.14%
4.45% 24.88% Deposit
Loans & Advances
Paid-up Capital
Constituents of Liabilities & Capital of PBL
Liquid Assets
Constituents of Assets of PBL
Reserves & Surplus Borrowings
Investments Fixed Assets
Other Liabilities 77.26% %
Other Assets 60.23%
8.44%
4.06%
2.58% 6.40%
4.24%
7.87% 25.50%
2.95%
Deposit
Constituents of Liabilities & Capital of Group
76.86%
218
Loans & Advances
Other Liabilities
Constituents of Assets of Group
Reserves & Surplus
Fixed Assets Investments
Paid-up Capital
Liquid Assets
Borrowings
Other Assets 61.10%
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Financial Highlights - PBL
Gross Revenue
Profit Before Tax
(Taka in million)
(Taka in million)
27,480
3,280
26,330
2015
2014
2,752
2014
2015
Total Capital Fund (Taka in million)
27,313
2014
29,283
2015
Taka in million Particulars Gross revenue Operating income Profit after tax
2015
2014 26,330
27,480
12,073
11,906
2,139
2,393
29,283
27,313
Total deposits
194,825
204,838
Total loans & advances
151,865
147,367
Total assets
252,161
254,912
1,262,739
1,208,249
44,900
48,044
Total capital
No. of deposits accounts No. of loans & advances accounts Return on assets (%)
0.84
0.96
Return on equity (%)
8.41
10.08
Statutory Liquidity ratio (%)
33.18
29.83
Capital adequacy ratio (%)
12.74
12.71
2,934
2,867
127
122
18
18
Long -term
"AA"
"AA"
Short-term
ST-2
ST-2
Long -term
"AA2"
"AA2"
Short-term
ST-2
ST-2
No. of employees No. of branches No. of SME branches/centers Rating (CRISL)
Rating (CRAB)
219
PRIME BANK A N N UA L R E P O RT 2 0 1 5
S t a keh o lder s’ I n fo r mation
GRAPHICAL PRESENTATION - PBL
4.70
2.88 2.32 1.78
2011
2012
2013
2014
2.08
Earnings per Share (Taka)
2015
24.49
22.21
22.37
23.76
25.66
Net Asset Value per Share (Taka)
2011
19,095
20,787
23,030
24,461
2012
2013
2014
2015
26,415
Shareholder’s Equity (Taka in million)
2011
2012
2013
2014
2015
20.19 13.53
Return on Equity (%)
8.35
2011
220
2012
2013
10.08
2014
8.41
2015
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Sta ke holde rsâ&#x20AC;&#x2122; I nformation
2.05 1.24 0.76
2011
2012
2013
0.96
2014
0.84
Return on Assests (%)
2015
8,551 7,427
7,474 6,157
5,906
Operating Profit (Taka in million)
2011
2012
2013
2014
2015
3,634 2,699
2,393 1,829
2011
2012
2013
2014
2,139
Profit after Tax (Taka in million)
2015
10,779 7,498
8,081
8,551
9,034
Non-Interest Income (Taka in million)
2011
2012
2013
2014
2015
221
PRIME BANK A N N UA L R E P O RT 2 0 1 5
S t a keh o lder sâ&#x20AC;&#x2122; I n fo r mation
GRAPHICAL PRESENTATION - PBL 7,989 5,583 4,157
2011
6,194
4,633
Investment Income (Taka in million)
2012
2013
2014
2015
41.98 35.75
48.29
51.08
36.62
Cost-Income Ratio (%)
2011
3,341
2012
2013
2014
2015
3,447 2,968
2,840
2,790
Fee based Income (Taka in million)
2011
2012
2013
2014
2015
Deposits Loans & Advances
201,907 182,053 160,890
159,816 138,848
153,589
204,838 147,367
194,825 151,865
Deposit & Advance (Taka in million)
2011
222
2012
2013
2014
2015
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Sta ke holde rsâ&#x20AC;&#x2122; I nformation
10,779 7,498
8,081
8,551
9,034
Non-Performing Loans (Taka in Million)
2011
2012
2013
2014
2015
15.76 11.23
10.54
12.26 10.46
Saving Deposit as % of Total Deposit (Taka in million)
2011
134
151
160
2012
2013
2014
2015
168
81
Number of ATM
2011
2012
2013
2014
2015
119
130
134
140
145
Branch Network
2011
2012
2013
2014
2015
223
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Stock Performance - Market Price Information The reported high and low prices and volume of shares of Prime Bank Limited traded during the year 2015 on Dhaka Stock Exchange and Chittagong Stock Exchange are given below: DSE Month
High
Low
Taka
Taka
CSE Volume
High
Low
Taka
Taka
Total Volume on DSE & CSE
Volume
January
20.20
18.10
8,071,454
19.50
17.10
76,225
8,147,679
February
19.50
18.60
6,810,344
19.50
18.00
46,659
6,857,003
March
19.50
14.80
4,765,291
19.50
14.50
140,694
4,905,985
April
16.10
14.10
3,028,048
15.70
14.00
183,915
3,211,963
May
18.20
14.80
14,816,763
18.10
14.60
184,234
15,000,997
June
17.40
15.80
19,657,269
17.10
15.10
343,730
20,000,999
July
20.20
15.90
10,447,712
19.50
16.00
362,582
10,810,294
August
21.50
18.70
26,727,500
21.10
18.40
912,974
27,640,474
September
20.30
18.50
11,063,300
19.60
18.50
81,964
11,145,264
21.10
18.80
16,320,146
21.00
19.00
233,791
16,553,937
November
19.70
18.20
4,406,725
19.60
17.10
49,101
4,455,826
December
19.60
17.80
11,900,928
19.40
18.00
44,999
11,945,927
October
Price Earning Ratio (Times) 12.85
Market Capitalization
14.57
9.47
(Taka in million)
8.71
8.43
34,702 34,624
26,660 18,631 20,175
2011
2012
2013
2014
2015
Market Price Per Share (Taka) 44.50 37.00 25.90 19.60
2011
224
2012
2013
2014
18.10
2015
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Segment Analysis
PBL
1.39%
7.43%
Conventional Banking
Operating Revenue
Islamic Banking Off-shore Banking
91.18%
4.69% 5.54%
26.37%
5.99%
Conventional Banking
Assets Employed
Conventional Banking
Profit before Tax
Islamic Banking
Islamic Banking
Off-shore Banking
Off-shore Banking
88.47%
Group
68.94%
7.28%
1.36%
0.21%
1.75%
Conventional Banking Islamic Banking
Operating Revenue
Off-shore Banking Local Subsidiaries (PBIL, PBSL) Overseas Subsidiaries (Exchange House, Finance Co.)
89.40%
3.19% 5.33%
0.68%
-1.27%
3.21%
4.60% 25.86%
5.75%
Assets Employed
Conventional Banking
Conventional Banking
Islamic Banking
Islamic Banking
Profit before Tax
Off-shore Banking Local Subsidiaries (PBIL, PBSL)
Local Subsidiaries (PBIL, PBSL) Overseas Subsidiaries (Exchange House, Finance Co.)
Overseas Subsidiaries (Exchange House, Finance Co.) 85.05%
Off-shore Banking
67.60%
225
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Horizontal/Vertical Analysis - Key Financial Data & Key Business Ratios - PBL Taka in million Particulars
2015
2014
2013
2012
2011
2010
Operating Performance (Income Statement) Interest income
15,551
18,446
22,011
22,822
16,709
12,147
Interest expenses
14,257
15,574
17,678
17,410
12,648
7,824
Net interest income
1,294
2,872
4,332
5,411
4,061
4,323
Investment income
7,989
6,194
5,583
4,633
4,157
2,632
Commission, exchange and brokerage
1,956
2,033
2,155
2,429
2,689
2,262
834
806
813
1,018
652
579
12,073
11,906
12,883
13,492
11,559
9,796
6,166
5,750
5,409
4,941
4,132
3,618
Earning before interest, depreciation and tax
17,345
19,187
21,422
23,024
19,666
13,643
Other Operating Income Operating Income Operating expenses
Profit before provision and tax
5,906
6,157
7,474
8,551
7,427
6,178
Provision for loans and assets
3,154
2,877
4,029
3,216
661
540
Profit after provision before tax
2,752
3,280
3,445
5,335
6,766
5,638
613
887
1,616
2,636
3,132
2,535
2,139
2,393
1,829
2,699
3,634
3,103
25,000
25,000
25,000
25,000
10,000
10,000
10,293
10,293
10,293
9,358
7,798
5,776
Tax including deferred tax Profit after tax
Balance Sheet (Financial Position) Authorized capital Paid-up capital Total shareholders' equity Deposits Long-term liabilities
26,415
24,461
23,030
20,787
19,095
16,908
194,825
204,838
201,907
182,053
159,816
124,574
95,170
104,040
91,424
84,827
63,379
47,918
Current liabilities
130,576
126,276
129,415
131,219
117,433
85,611
Loans and advances
151,865
147,367
153,589
160,890
138,848
116,057
Investments
62,733
72,642
56,940
45,862
39,172
20,484
6,516
6,613
6,407
4,363
3,975
1,695
Earning assets
216,975
221,521
211,399
212,204
179,537
137,577
Current assets
140,218
147,341
144,437
133,953
119,695
92,959
Property, Plant and Equipment
9,641
21,064
15,023
2,735
2,262
7,349
Total assets
Net current assets
252,161
254,912
243,869
236,833
199,950
154,342
Total liabilities
225,746
230,451
220,839
216,046
180,856
137,434
Current ratio
1.07
1.17
1.12
1.02
1.02
1.09
Gearing ratio
78.91
81.42
80.67
80.97
77.88
76.98
Quick Ratio
1.07
1.17
1.12
1.01
1.01
1.09
Cash Reserve Ratio (CRR)
7.04
6.71
6.97
6.06
6.22
6.70
Statutory liquidity Ratio (SLR)
33.18
29.83
38.39
34.02
32.96
26.00
Equity debt ratio (%)
11.70
10.61
10.43
9.62
10.56
12.30
Other Business
226
Import
114,747
126,571
133,219
168,532
174,384
147,704
Export
93,700
110,096
127,091
143,612
133,396
106,943
Remittance
41,685
39,484
32,628
42,443
36,890
28,433
Guarantee Business
45,113
30,155
31,170
29,391
27,844
29,000
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Taka in million Particulars
2015
2014
2013
2012
2011
2010
229,843
214,892
220,020
202,340
193,257
182,933
Tier-1 Capital (going concern capital)
22,977
22,511
21,404
20,511
18,592
15,239
Tier-2 Capital (gone-concern capital)
6,306
4,802
5,091
5,241
5,477
5,672
Total capital
29,283
27,313
26,495
25,752
24,069
20,911
Capital Required
22,984
21,489
22,002
20,234
19,326
18,293
Capital Surplus
6,299
5,824
4,493
5,518
4,743
2,617
Tier-1 capital to RWA
10.00
10.48
9.73
10.14
9.62
8.33
Tier-2 capital to RWA
2.74
2.23
2.31
2.59
2.83
3.10
12.74
12.71
12.04
12.73
12.45
11.43
7.59
N/A
N/A
N/A
N/A
N/A
Liquidity Coverage Ratio (LCR)
178.71
145.86
N/A
N/A
N/A
N/A
Net Stable Funding Ratio (NSFR)
109.12
107.25
N/A
N/A
N/A
N/A
11,883
11,215
7,815
6,168
1,908
1,368
7.82
7.61
5.09
3.83
1.37
1.18
Provision for unclassified loans
2,031
1,741
1,691
2,025
1,725
1,463
Provision for classified loans
5,749
4,586
3,733
1,949
778
642
18.10
19.60
25.90
37.00
44.50
94.45
1,029.35
1,029.35
1,029.35
935.77
779.81
577.64
18,652
23,102
25,632
23,964
26,030
19,748
2.08
2.32
1.78
2.88
4.70
5.69
15.00%
15.00%
12.50%
20.00%
30.00%
40.00%
Cash
15%
15.00%
12.50%
10.00%
10.00%
5.00%
Bonus
0%
0.00%
0.00%
10.00%
20.00%
35.00%
15.00
15.00
13.10
21.82
40.21
49.52
Dividend cover ratio (times)
1.39
1.55
1.42
1.44
1.57
1.42
Dividend yield (%)
8.29
7.65
4.83
5.41
6.74
4.23
Market capitalization
18,631
20,175
26,660
34,624
34,702
54,572
Net asset value per share (Taka)
25.66
23.76
22.37
22.21
24.49
29.27
8.71
8.43
14.57
12.85
9.47
16.60
Net interest margin (NIM)
0.86
1.91
2.75
3.61
3.19
4.21
Net non-interest margin on average earning assets
2.10
1.52
1.48
1.60
2.12
1.50
Capital Measures Total risk weighted assets
Total Capital to Risk Weighted Asset Ratio (CRAR) Leverage ratio (Basel-III)
Credit Quality Non-performing loans (NPLs) NPLs to total loans and advances (%)
Share Information Market price per share (Taka) No. of shares outstanding (Million) No. of shareholders (actual) Earnings per share (Taka) Dividend:
Effective dividend ratio (%)
Price earning ratio (times)
Operating Performance Ratio (%)
227
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Taka in million Particulars
2015
Earning base in assets (average)
86.48
86.80
88.12
89.69
89.51
88.66
Gross profit ratio
45.85
43.33
42.15
43.66
47.75
55.60
0.51
1.15
1.80
2.48
2.29
3.10
2.01
2.15
2.76
3.36
3.24
2.89
2.33
2.47
3.11
3.92
4.19
4.43
Non interest income to total income
40.94%
32.87%
27.98%
26.15%
30.98%
31.06%
Net Profit Before Tax to Gross Income
10.45%
11.94%
11.27%
17.26%
27.95%
32.00%
Net Profit After Tax to Gross Income
8.12%
8.71%
5.99%
8.73%
15.01%
17.61%
Cost-income ratio
51.08
48.29
41.98
36.62
35.75
36.93
Credit-deposit ratio
77.95
71.94
76.07
88.38
86.88
93.16
Cost of Deposit
6.64
7.36
8.80
8.75
8.15
6.39
Cost of Fund
9.72
10.19
11.62
11.64
11.06
9.52
Yield on average advance
10.20
12.09
13.85
15.17
13.09
11.76
Return on average assets
0.84
0.96
0.76
1.24
2.05
2.22
Return on average equity
8.41
10.08
8.35
13.53
20.19
21.66
Return on Capital Employed
4.86
4.79
6.53
8.10
9.01
9.53
127
122
117
113
102
94
18
18
17
17
17
14
168
160
151
134
81
43
2,934
2,867
2,710
2,544
2,292
2,139
658
638
661
660
644
621
Long Term
"AA"
"AA"
"AA"
"AA+"
"AA+"
"AA+"
Short Term
ST-2
ST-2
ST-2
ST-1
ST-1
ST-1
Long Term
"AA2"
"AA2"
"AA2"
-
-
-
Short Term
ST-2
ST-2
ST-2
-
-
-
Average earning assets
219,248
216,460
211,802
195,871
158,557
123,741
Average total assets
253,537
249,391
240,351
218,392
177,146
139,574
Average deposits
199,831
203,372
191,980
170,934
142,195
115,765
Average loans & advances
149,616
150,478
157,239
149,869
127,452
102,654
Average equity
25,438
23,745
21,908
19,941
18,002
14,327
Net interest income as a percentage of working funds Profit per employee Operating profit as a percentage of working funds
2014
2013
2012
2011
2010
Other information No. of branches No. of SME branches/centers Number of ATM No. of employees No. of foreign correspondents Rating (CRISL)
Rating (CRAB)
228
Particulars
Total assets
Non - banking assets 252,161.23
220.50
10,988.16
Other assets
-1.08%
25.04%
21.19%
-1.46%
3.05%
151,864.53 6,516.43
76.30%
8,085.88
0.70%
254,912.20
176.34
9,067.22
6,612.69
147,366.65
4,586.55
142,780.10
72,641.83
-13.64%
62,732.86
143,778.65
1,713.52
70,928.31
-42.78%
-12.94%
-
980.45
61,752.41
100%
1,512.69
29.42%
1,957.68 420.00
1,253.81
47.19%
258.88
17,534.78
15,194.72
2,340.06
2014
1,845.46
-56.65%
-0.42%
17,461.06
112.22
-0.82%
2.18%
15 Vs 14
15,069.88
2,391.18
2015
Fixed assets including premises, furniture and fixtures
Bills purchased and discounted
Loans, cash credits, overdrafts, etc./ investments
Loans, advances and lease / investments
Others
Government
Investments
Money at call and short notice
Outside Bangladesh
In Bangladesh
Balance with other banks and financial institutions
Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies)
In hand (including foreign currencies)
Cash
PROPERTY AND ASSETS
Balance Sheet
5 Years - Horizontal Analysis
2.97%
4.53% 243,868.80
6.64%
46.83%
-4.54%
-16.66%
-3.95%
24.15%
-14.36%
24.95%
-
-47.04%
-55.01%
-
8,420.46
6,406.72
153,588.76
6,207.88
147,380.88
56,939.52
792.35
56,147.17
-
870.70
626.53
-2.87%
9.06%
5.96%
30.32%
13 Vs 12
-
100.00%
7.68%
3.21%
-4.05%
-26.12%
-3.12%
27.58%
116.26%
26.33%
-
73.73%
100.12%
244.17
17,642.65
-0.61%
6.03%
14,958.78
2,683.87
2013
1.58%
-12.81%
14 Vs 13
236,833.01
-
7,896.33
4,363.35
160,889.85
7,449.14
153,440.71
45,861.90
925.21
44,936.70
-
1,644.13
1,392.74
251.39
16,177.44
14,117.94
2,059.50
2012
6,819.53
132,589.36
35,377.80
982.15
34,395.65
-
1,516.12
1,138.64
377.48
13,496.68
12,032.57
1,464.10
2011
-
6,175.55
3,975.46
18.45% 199,950.49
-
27.86%
9.76%
15.41% 139,408.89
9.23%
15.73%
29.63%
-5.80%
30.65%
-
8.44%
22.32%
-33.40%
19.86%
17.33%
40.67%
12 Vs 11
29.55%
-
12.42%
134.58%
20.12%
-7.80%
22.02%
72.71%
-12.01%
77.59%
-
46.31%
83.86%
-9.47%
40.93%
44.81%
15.50%
11 Vs 10
Taka in million
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
229
230
Particulars
225,746.20
Total liabilities
8,735.05 1,791.99 1,511.41
Statutory reserve
Revaluation gain / (loss) on investments
Revaluation reserve
26,415.03 252,161.23
Total liabilities and Shareholders’ equity
1,835.87
-
Total Shareholders’ equity
Surplus in profit and loss account / Retained earnings
Other reserve
6.00
2,241.23
Share premium
Foreign currency translation gain
10,293.49
Paid up capital
Capital / Shareholders’ equity
20,478.90
-1.08%
7.99%
2.49%
-
17.88%
0.52%
305.92%
6.72%
-
-
-2.04%
14.12%
-4.89%
194,825.10
Other liabilities
-
-
Other deposits
-
-10.53%
-
133,489.47
Term deposits / Mudaraba term deposits
22.34%
-18.88%
2.35%
36.16%
15 Vs 14
Bearer certificate of deposit
30,713.92
2,387.28
28,234.43
10,442.20
2015
Savings bank / Mudaraba savings deposits
Bills payable
Current / Al-wadeeah current deposits
Deposits and other accounts
agents
Borrowings from other banks, financial institutions and
Liabilities
LIABILITIES AND CAPITAL
Balance Sheet
5 Years - Horizontal Analysis
254,912.20
24,460.71
1,791.27
-
5.09
1,503.52
441.47
8,184.65
2,241.23
10,293.49
230,451.49
17,944.88
204,837.73
-
-
149,202.09
25,106.12
2,942.89
27,586.63
7,668.88
2014
23,029.62
1,341.08
-
4.51
1,511.49
109.19
7,528.63
2,241.23
10,293.49
220,839.19
15,073.79
201,907.14
-
-
152,087.48
21,125.91
2,081.42
26,612.33
3,858.26
2013
4.53% 243,868.80
6.21%
33.57%
-
12.69%
-0.53%
304.30%
8.71%
-
-
4.35%
19.05%
1.45%
-
-
-1.90%
18.84%
41.39%
3.66%
98.77%
14 Vs 13
2.97%
10.79%
-35.28%
-
-10.02%
500.74%
453.73%
10.08%
-
10.00%
2.22%
13.24%
10.91%
-
-
15.16%
10.09%
-39.17%
-2.78%
-81.34%
13 Vs 12
236,833.01
20,787.04
2,072.23
-
5.02
251.60
19.72
6,839.53
2,241.23
9,357.71
216,045.97
13,311.12
182,052.87
-
-
132,068.78
19,188.83
3,421.44
27,373.82
20,681.98
2012
19,094.98
2,779.68
-
8.69
251.60
243.16
5,772.51
2,241.23
7,798.10
180,855.52
10,069.95
159,815.72
-
-
115,250.38
17,943.89
2,992.60
23,628.85
10,969.85
2011
18.45% 199,950.49
8.86%
-25.45%
-
-42.31%
-
-91.89%
18.48%
-
20.00%
19.46%
32.19%
13.91%
-
-
14.59%
6.94%
14.33%
15.85%
88.53%
12 Vs 11
29.55%
12.93%
-0.80%
-
733.26%
-
-82.83%
30.62%
-
35.00%
31.59%
31.71%
28.29%
-
-
35.28%
17.26%
22.76%
9.20%
110.37%
11 Vs 10
Taka in million
Shareholders’ Information PRIME BANK A N N UA L R E P O RT 2 0 1 5
Particulars
Total assets
Non - banking assets 252,161.23
220.50
10,988.16
Other assets
176.34
9,067.22
6,612.69
147,366.65
4,586.55
142,780.10
72,641.83
1,713.52
70,928.31
-
1,512.69
1,253.81
258.88
17,534.78
15,194.72
2,340.06
2014
100.00% 254,912.20
0.09%
4.36%
2.58%
60.23%
151,864.53 6,516.43
3.21%
8,085.88
57.02%
24.88%
62,732.86
143,778.65
0.39%
24.49%
980.45
61,752.41
0.17%
0.77%
1,957.68 420.00
0.73%
1,845.46
0.04%
6.92%
17,461.06
112.22
5.98%
0.95%
%
15,069.88
2,391.18
2015
Fixed assets including premises, furniture and fixtures
Bills purchased and discounted
Loans, cash credits, overdrafts, etc./ investments
Loans, advances and lease / investments
Others
Government
Investments
Money at call and short notice
Outside Bangladesh
In Bangladesh
Balance with other banks and financial institutions
Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies)
In hand (including foreign currencies)
Cash
PROPERTY AND ASSETS
Balance Sheet
5 Years - Vertical Analysis
-
8,420.46
6,406.72
153,588.76
6,207.88
147,380.88
56,939.52
792.35
56,147.17
-
870.70
626.53
244.17
17,642.65
14,958.78
2,683.87
2013
100.00% 243,868.80
0.07%
3.56%
2.59%
57.81%
1.80%
56.01%
28.50%
0.67%
27.82%
-
0.59%
0.49%
0.10%
6.88%
5.96%
0.92%
%
7,449.14
153,440.71
45,861.90
925.21
44,936.70
-
1,644.13
1,392.74
251.39
16,177.44
14,117.94
2,059.50
2012
-
7,896.33
4,363.35
100.00% 236,833.01
-
3.45%
2.63%
62.98% 160,889.85
2.55%
60.43%
23.35%
0.32%
23.02%
-
0.36%
0.26%
0.10%
7.23%
6.13%
1.10%
%
6,819.53
132,028.90
39,172.30
4,776.65
34,395.65
-
1,516.12
1,138.64
377.48
13,496.68
12,032.57
1,464.10
2011
100.00%
-
3.33%
1.84%
199,950.49
-
2,941.51
3,975.46
67.93% 138,848.43
3.15%
64.79%
19.36%
0.39%
18.97%
-
0.69%
0.59%
0.11%
6.83%
5.96%
0.87%
%
100.00%
-
1.47%
1.99%
69.44%
3.41%
66.03%
19.59%
2.39%
17.20%
-
0.76%
0.57%
0.19%
6.75%
6.02%
0.73%
%
Taka in million
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
231
232
Particulars
-
Other deposits
225,746.20
Total liabilities
8,735.05 1,791.99 1,511.41
Statutory reserve
Revaluation gain / (loss) on investments
Revaluation reserve
26,415.03 252,161.23
Total liabilities and Shareholders’ equity
1,835.87
-
Total Shareholders’ equity
Surplus in profit and loss account / Retained earnings
Other reserve
6.00
2,241.23
Share premium
Foreign currency translation gain
10,293.49
Paid up capital
Capital / Shareholders’ equity
20,478.90
Other liabilities
194,825.10
-
133,489.47
Term deposits / Mudaraba term deposits
Bearer certificate of deposit
30,713.92
2,387.28
28,234.43
10,442.20
2015
Savings bank / Mudaraba savings deposits
Bills payable
Current / Al-wadeeah current deposits
Deposits and other accounts
agents
Borrowings from other banks, financial institutions and
Liabilities
LIABILITIES AND CAPITAL
Balance Sheet
5 Years - Vertical Analysis
-
-
149,202.09
25,106.12
2,942.89
27,586.63
7,668.88
2014
17,944.88
24,460.71
1,791.27
-
5.09
1,503.52
441.47
8,184.65
2,241.23
10,293.49
100.00% 254,912.20
10.48%
0.73%
-
-
0.60%
0.71%
3.46%
0.89%
4.08%
89.52% 230,451.49
8.12%
77.26% 204,837.73
-
-
52.94%
12.18%
0.95%
11.20%
4.14%
%
15,073.79
201,907.14
-
-
152,087.48
21,125.91
2,081.42
26,612.33
3,858.26
2013
23,029.62
1,341.08
-
4.51
1,511.49
109.19
7,528.63
2,241.23
10,293.49
100.00% 243,868.80
9.60%
0.70%
-
0.00%
0.59%
0.17%
3.21%
0.88%
4.04%
90.40% 220,839.19
7.04%
80.36%
-
-
58.53%
9.85%
1.15%
10.82%
3.01%
%
-
-
132,068.78
19,188.83
3,421.44
27,373.82
20,681.98
2012
13,311.12
20,787.04
2,072.23
-
5.02
251.60
19.72
6,839.53
2,241.23
9,357.71
100.00% 236,833.01
9.44%
0.55%
-
-
0.62%
0.04%
3.09%
0.92%
4.22%
90.56% 216,045.97
6.18%
82.79% 182,052.87
-
-
62.36%
8.66%
0.85%
10.91%
1.58%
%
10,069.95
159,815.72
-
-
115,250.38
17,943.89
2,992.60
23,628.85
10,969.85
2011
19,094.98
2,779.68
-
8.69
251.60
243.16
5,772.51
2,241.23
7,798.10
100.00% 199,950.49
8.78%
0.87%
-
-
0.11%
0.01%
2.89%
0.95%
3.95%
91.22% 180,855.52
5.62%
76.87%
-
-
55.76%
8.10%
1.44%
11.56%
8.73%
%
100.00%
9.55%
1.39%
-
-
0.13%
0.12%
2.89%
1.12%
3.90%
90.45%
5.04%
79.93%
-
-
57.64%
8.97%
1.50%
11.82%
5.49%
%
Taka in million
Shareholders’ Information PRIME BANK A N N UA L R E P O RT 2 0 1 5
10.06
Managing Director’s salary and fees
394.55 1,075.88 6,166.43 5,906.42
Other expenses
Total operating expenses (B)
Profit / (loss) before provision (C=A-B)
-
Depreciation and repair of Bank’s assets
Charges on loan losses
1.15
221.59
Stationery, printing, advertisements, etc.
Auditors’ fees
137.64
Postage, stamp, telecommunication, etc.
3.45
55.05
Legal expenses
Directors’ fees
675.18
3,591.88
12,072.86
Rent, taxes, insurance, electricity, etc.
Salaries and allowances
Total operating income (A)
834.18
1,956.08
Commission, exchange and brokerage
Other operating income
7,988.73
Investment income
(14,256.81)
Interest / profit paid on deposits, borrowings, etc. 1,293.87
15,550.67
Interest income / profit on investments
Net interest / net profit on investments
2015
Particulars
Profit and Loss Account
5 Years - Horizontal Analysis
-4.06%
7.25%
-3.45%
-1.43%
-
-
-9.15%
15.98%
5.12%
22.40%
53.54%
15.89%
9.52%
1.40%
3.44%
-3.79%
28.97%
-54.95%
-8.45%
-15.70%
15 Vs 14
6,156.69
5,749.63
1,114.31
400.25
-
1.15
3.80
8.67
210.81
112.45
35.85
582.60
3,279.74
11,906.31
806.47
2,033.13
6,194.36
2,872.36
(15,573.52)
18,445.89
2014
-17.63%
6.30%
-3.59%
14.98%
-
66.67%
-12.94%
-25.15%
-7.25%
-16.09%
-5.04%
5.88%
11.59%
-7.58%
-0.75%
-5.68%
10.96%
-33.70%
-11.91%
-16.20%
14 Vs 13
7,474.16
5,408.92
1,155.85
348.12
-
0.69
4.36
11.59
227.29
134.00
37.76
550.26
2,939.02
12,883.08
812.59
2,155.49
5,582.71
4,332.30
(17,678.36)
22,010.66
2013
-12.59%
9.47%
12.49%
4.95%
-
20.00%
-15.29%
1.24%
-25.33%
5.02%
32.15%
27.71%
9.94%
-4.51%
-20.17%
-11.28%
20.49%
-19.94%
1.54%
-3.55%
13 Vs 12
8,550.83
4,941.12
1,027.53
331.71
-
0.58
5.15
11.45
304.37
127.60
28.57
430.87
2,673.29
13,491.95
1,017.96
2,429.44
4,633.33
5,411.21
(17,410.29)
22,821.50
2012
14.70%
17.92%
-4.35%
22.19%
-
10.05%
44.33%
27.16%
18.14%
-3.37%
75.14%
17.22%
29.90%
15.86%
56.11%
-9.65%
9.91%
32.34%
37.65%
36.36%
12 Vs 11
7,455.00
4,190.32
1,074.26
271.48
-
0.52
3.57
9.00
257.64
132.06
16.31
367.57
2,057.91
11,645.32
652.09
2,688.97
4,215.42
4,088.84
(12,647.98)
16,736.82
2011
20.70%
15.81%
5.08%
23.76%
-
-9.13%
-23.32%
0.26%
15.39%
7.21%
-17.33%
17.78%
22.18%
18.89%
12.72%
18.90%
60.18%
-5.42%
61.66%
37.79%
11 Vs 10
Taka in million
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
233
234 2,752.02
Total profit / (loss) before taxes (C-D)
-10.61%
613.00 2,139.02
-30.91%
(100.00)
Deferred tax
Net profit after taxation
-65.85%
713.00
-39.58%
-16.10%
9.66%
8.74%
200.00%
Current tax
Provision for taxation
3,154.41
56.11
Other provisions
Total provision (D)
7.00
9.16%
3,091.30
Provision for diminution in value of investments
4629.80%
68.40
Provision for off-balance sheet exposures
-47.50%
157.02%
39.90
293.00
General provision
1.76%
15 Vs 14
Provision for Off-Shore Banking Units
2,690.00
2015
Specific provision
Provision for loans / investments
Particulars
Profit and Loss Account
5 Years - Horizontal Analysis
2,392.90
887.20
(292.80)
1,180.00
3,280.10
2,876.59
51.60
(7.00)
2,831.99
(1.51)
76.00
114.00
2,643.50
2014
30.80%
-45.10%
-
-26.98%
-4.80%
-28.60%
409.11%
-128.54%
-29.09%
-115.10%
-79.01%
-82.24%
-11.29%
14 Vs 13
1,829.50
1,616.00
-
1,616.00
3,445.50
4,028.66
10.14
24.53
3,994.00
10.00
362.00
642.00
2,980.00
2013
-32.22%
-38.70%
-100.00%
-34.04%
-35.42%
25.28%
-99.22%
-44.00%
113.58%
-92.86%
-
167.50%
100.00%
13 Vs 12
2,698.99
2,636.10
186.30
2,449.80
5,335.09
3,215.74
1,301.94
43.80
1,870.00
140.00
-
240.00
1,490.00
2012
-26.30%
-15.83%
-17.02%
-15.74%
-21.47%
386.50%
100.00%
100.00%
182.90%
7.69%
-
-21.31%
559.29%
12 Vs 11
3,662.18
3,131.82
224.50
2,907.32
6,794.00
661.00
-
-
661.00
130.00
-
305.00
226.00
2011
18.08%
23.54%
-10.20%
27.24%
20.54%
22.41%
-
-
22.41%
-51.85%
-100.00%
154.17%
88.33%
11 Vs 10
Taka in million
Shareholdersâ&#x20AC;&#x2122; Information PRIME BANK A N N UA L R E P O RT 2 0 1 5
1,956.08
Commission, exchange and brokerage
10.06
Managing Director’s salary and fees
394.55 1,075.88 6,166.43 5,906.42
Other expenses
Total operating expenses (B)
Profit / (loss) before provision (C=A-B)
-
Depreciation and repair of Bank’s assets
Charges on loan losses
1.15
221.59
Stationery, printing, advertisements, etc.
Auditors’ fees
137.64
Postage, stamp, telecommunication, etc.
3.45
55.05
Legal expenses
Directors’ fees
675.18
3,591.88
12,072.86
Rent, taxes, insurance, electricity, etc.
Salaries and allowances
Total operating income (A)
834.18
7,988.73
Investment income
Other operating income
1,293.87
(14,256.81)
Interest / profit paid on deposits, borrowings, etc.
Net interest / net profit on investments
15,550.67
2015
Interest income / profit on investments
Particulars
Profit and Loss Account
5 Years - Vertical Analysis
22.43%
23.42%
4.09%
1.50%
0.00%
0.00%
0.01%
0.04%
0.84%
0.52%
0.21%
2.56%
13.64%
45.85%
3.17%
7.43%
30.34%
4.91%
-54.15%
59.06%
%
6,156.69
5,749.63
1,114.31
400.25
-
1.15
3.80
8.67
210.81
112.45
35.85
582.60
3,279.74
11,906.31
806.47
2,033.13
6,194.36
2,872.36
(15,573.52)
18,445.89
2014
22.40%
20.92%
4.05%
1.46%
0.00%
0.00%
0.01%
0.03%
0.77%
0.41%
0.13%
2.12%
11.94%
43.33%
2.93%
7.40%
22.54%
10.45%
-56.67%
67.13%
%
7,474.16
5,408.92
1,155.85
348.12
-
0.69
4.36
11.59
227.29
134.00
37.76
550.26
2,939.02
12,883.08
812.59
2,155.49
5,582.71
4,332.30
(17,678.36)
22,010.66
2013
24.46%
17.70%
3.78%
1.14%
0.00%
0.00%
0.01%
0.04%
0.74%
0.44%
0.12%
1.80%
9.62%
42.15%
2.66%
7.05%
18.27%
14.18%
-57.85%
72.02%
%
8,550.83
4,941.12
1,027.53
331.71
-
0.58
5.15
11.45
304.37
127.60
28.57
430.87
2,673.29
13,491.95
1,017.96
2,429.44
4,633.33
5,411.21
(17,410.29)
22,821.50
2012
27.67%
15.99%
3.33%
1.07%
0.00%
0.00%
0.02%
0.04%
0.98%
0.41%
0.09%
1.39%
8.65%
43.66%
3.29%
7.86%
14.99%
17.51%
-56.34%
73.85%
%
7,455.00
4,190.32
1,074.26
271.48
-
0.52
3.57
9.00
257.64
132.06
16.31
367.57
2,057.91
11,645.32
652.09
2,688.97
4,215.42
4,088.84
(12,647.98)
16,736.82
2011
30.69%
17.25%
4.42%
1.12%
0.00%
0.00%
0.01%
0.04%
1.06%
0.54%
0.07%
1.51%
8.47%
47.94%
2.68%
11.07%
17.35%
16.83%
-52.06%
68.89%
%
Taka in million
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
235
236 2,752.02
Total profit / (loss) before taxes (C-D)
8.12%
613.00 2,139.02
2.33%
(100.00)
Deferred tax
Net profit after taxation
-0.38%
713.00
2.71%
10.45%
11.98%
0.21%
0.03%
Current tax
Provision for taxation
3,154.41
56.11
Other provisions
Total provision (D)
7.00
11.74%
3,091.30
Provision for diminution in value of investments
0.26%
68.40
Provision for off-balance sheet exposures
0.15%
1.11%
39.90
293.00
General provision
10.22%
%
Provision for Off-Shore Banking Units
2,690.00
2015
Specific provision
Provision for loans / investments
Particulars
Profit and Loss Account
5 Years - Vertical Analysis
2,392.90
887.20
(292.80)
1,180.00
3,280.10
2,876.59
51.60
(7.00)
2,831.99
(1.51)
76.00
114.00
2,643.50
2014
8.71%
3.23%
-1.07%
4.29%
11.94%
10.47%
0.19%
-0.03%
10.31%
-0.01%
0.28%
0.41%
9.62%
%
1,829.50
1,616.00
-
1,616.00
3,445.50
4,028.66
10.14
24.53
3,994.00
10.00
362.00
642.00
2,980.00
2013
5.99%
5.29%
0.00%
5.29%
11.27%
13.18%
0.03%
0.08%
13.07%
0.03%
1.18%
2.10%
9.75%
%
2,698.99
2,636.10
186.30
2,449.80
5,335.09
3,215.74
1,301.94
43.80
1,870.00
140.00
-
240.00
1,490.00
2012
8.73%
8.53%
0.60%
7.93%
17.26%
10.41%
4.21%
0.14%
6.05%
0.45%
0.00%
0.78%
4.82%
%
3,662.18
3,131.82
224.50
2,907.32
6,794.00
661.00
-
-
661.00
130.00
-
305.00
226.00
2011
15.07%
12.89%
0.92%
11.97%
27.97%
2.72%
-
-
2.72%
0.54%
0.00%
1.26%
0.93%
%
Taka in million
Shareholdersâ&#x20AC;&#x2122; Information PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Statement of Value Added and its Distribution Taka in million Particulars
2015
2014
26,330
27,480
Less: Cost of services & supplies
(16,485)
(17,701)
Value added by banking service
9,844
9,779
-
-
(3,154)
(2,877)
6,690
6,902
To employees as salaries & allowances
3,602
3,288
To providers of capital as dividend & reserve
2,094
2,200
713
1,180
45
193
336
333
(100)
(293)
280
233
6,690
6,902
Income from banking services
Non-banking income Provision for loans & off-balance sheet exposure
Distribution of value addition
To Government as income tax To expansion and growth Retained profit by the entity Depreciation Deferred taxation
Total
4.83%
-4.24%
0.67%
47.64%
2.79%
5.02%
10.66%
53.84%
To employees as salaries & allowances
17.10%
Distribution of value addition-2014
-1.49%
To employees as salaries & allowances
To providers of capital as dividend & reserve
Distribution of value addition-2015
To Government as income tax Retained profit
To providers of capital as dividend & reserve To Government as income tax
Depreciation
Retained profit
Deferred taxation
Depreciation Deferred taxation
31.30% 31.88%
Capital Adequacy Ratio (%) 12.46
2011
12.64
2012
12.03
2013
12.71
2014
12.74
2015
237
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Market Share information of the Companyâ&#x20AC;&#x2122;s Product-Services
Industry - Deposit
Prime Bank-Deposit
(Taka in million)
(Taka in million)
7,450,231 6,588,516 5,006,825
182,053
201,907
204,838
194,825
159,816
5,806,965
4,170,647
2011
2012
2013
2014
2015
Industry - Loans and Advances
2011
2012
2014
2015
Prime Bank-Loans and Advances
(Taka in million)
(Taka in million)
6,174,735
160,890
5,451,495 4,386,156
2013
153,589
4,761,510
151,865 147,367
3,782,471 138,848
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Economic Value Added Statement Economic value added is a measure of profitability which takes into consideration the cost of total invested equity. Shareholders / equity providers are always conscious about their return on capital invested. As a commercial banking company, we are deeply concerned for delivery of value to all of our shareholders / equity providers. Taka in million 2015 Shareholders' equity
2014
2013
26,415
24,461
23,030
8,937
7,416
6,514
35,352
31,877
29,543
33,614
30,710
27,206
Profit after taxation
2,139
2,393
1,829
Add: Provision for loans / investments, off-balance sheet exposure and Off-shore Banking Units
3,154
2,877
4,029
(1,627)
(2,123)
(2,541)
3,667
3,147
3,318
12.29%
12.90%
12.90%
Cost of average equity
4,130
3,961
3,509
Economic value added
(463)
(814)
(192)
43.14%
-325.27%
-108.27%
Add: Cumulative provision for loans / investments, off-balance sheet exposure and Off-shore Banking Units
Average shareholders' equity Earnings
Less: written-off during the year Average cost of equity (based on weighted average rate of Shanchay Patra issued by the Government of Bangladesh) plus 2% risk premium.
Growth over last year
238
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
Taka in million Maturity analysis Below 1 year Interest earning assets
1-5 years
Above 5 years
Total
128,678
58,979
29,318
216,975
11,540
3,576
20,071
35,186
Total assets
140,218
62,555
49,389
252,161
Interest bearing liabilities
120,208
57,162
25,509
202,880
10,368
1,223
11,276
22,866
130,576
58,385
36,785
225,746
Maturity Gap
9,641
4,170
12,603
26,415
Cumulative Gap
9,641
13,812
26,415
Non-interest earning assets
Non-interest bearing liabilities Total liabilities
Market Value Addition (Taka in million) 2,316
Economic Value Addition
26,415
(Taka in million)
18,631
-192
Value Addition
2012
2013
2014
2015 -463
Book Value
Market Value
-814
-7,784
Economic impact report The bank’s overall mission is to deliver optimum value to its customers, employees, shareholders and the nation and the business strategy is geared towards achieving this. This section covers the value the bank delivers to its shareholders and the nation at large. The bank’s policy has been to deliver optimum value in a manner that is consistent with the highest levels of fairness and transparency. For the bank, it has not been a case of building financial value and enhancing the bottom line at any cost, but rather participating in a process of creating value through fair and ethical means. Building sustainable value of all stakeholders is an important corporate goal. Some of the measures taken to create, sustain and deliver optimum value are as follows:
Maintaining capital adequacy Capital adequacy symbolizes the financial strength and stability of a bank. It limits the extent up to which banks can expand their business in terms of risk weighted assets. Like all commercial institutions, banks too constantly look at ways of expanding their operations by acquiring property, plant and equipment, opening branches, in addition to mobilizing deposits, providing loans and investing in other assets. Regulatory capital requirements are therefore necessary to prevent banks from expanding beyond their ability to manage (over trading), to improve the quality of bank’s assets, to control the ability of the banks to leverage their growth and to lead to higher earnings on assets, leading to peace of mind of all the stakeholders. The bank keeps a careful check on its capital adequacy ratios.
239
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
The capital adequacy computation on Solo basis as at December 31, 2015 is given below: Taka in million Details of Eligible Capital
2015
2014
(Basel-III)
(Basel-II)
Common Equity Tier-I (CET-1) Capital: Paid-up capital
10,293
10,293
Share premium
2,241
2,241
General Reserve
-
-
Minority interest in subsidiaries
-
-
8,735
8,185
Statutory reserve Surplus in profit and loss account / Retained earnings
1,836
1,791
23,106
22,511
-
-
-
-
Goodwill and all other intengible assets
71
-
Reciprocal crossholdings
58
-
129
-
22,977
22,511
2,528
2,830
221
221
Total CET-I Capital Additional Tier-1 (AT-1) Capital: Non-cumulative irredeemable preference share Less: Regulatory adjustments: Shortfall in provisions required against investment in share
Total Tier-1 Capital Tier-2 Capital General provision (Eligible for inclusion in Tier-2 will be limited to a maximum 1.25% of Credit risk-weighted assets) Revaluation gain / loss on investment (50% of total) Revaluation reserve for equity instruments (10% of unrealized market gain) Revaluation reserve for fixed assets (50% of total) Prime Bank Subordinated bond Exchange equalization account
-
-
752
752
3,000
1,000
-
-
6,501
4,802
195
-
6,306
4,802
29,283
27,313
229,843
214,892
10.00
10.48
2.74
2.23
12.74
12.71
Less: Regulatory adjustments: Revaluation Reserves for fixed assets, securities, and equity securities etc. Total Tier-2 Capital Total eligible capital Total risk-weighted assets Core capital ratio (%) Supplementary capital ratio (%) Total Capital to Risk Weighted Asset Ratio (CRAR)
Operational Risk 9.47%
Tier-2 Capital 21.54%
Market Risk 2.53%
Core Capital and Supplementary Capital-2015
Credit Risk, Market Risk and Operational Risk
Tier-1 Capital 78.46%
240
Credit Risk 88.00%
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholders’ Information
Maintaining liquidity The liquidity policy of the bank has always been to carry a positive mismatch in the interest earning assets and interest bearing liabilities in the 1 to 30 days category. Our liquidity remained at optimum levels during the year. The liquid assets ratio stood at 33.18% (required 13% of total demand & time deposits) in December 2015. The assets and liabilities committee (ALCO) of the bank monitors the situation and maintains a satisfactory trade-off between liquidity and profitability.
Payment of dividends The dividend policy of bank has always been to pay a decent dividend to its shareholders while ploughing back sufficient profits to fund growth and capital adequacy requirements. As a result of this prudent dividend policy, the bank has been able to build up its shareholders’ fund base to satisfactory levels. Considering the performance of the bank over the past year, the Board has recommended cash dividend of 15% for the year 2015.
Dividend (%)
Stock Dividend (%) Cash Dividend (%)
10
10 20 10 2011
2012
12.5 2013
15
15
2014
2015
Market Value Added Statement Market Value Added (MVA) statement is the difference between the total market value and the total book value of shares of a bank. A high MVA indicates that the bank has created substantial wealth for the shareholders. MVA is equivalent to the present value of all future expected economic value added. The share market value of bank’s shares stood at Tk 18,631 million whereas the book value of the shares stood at Tk 26,415 million, resulting a Market Value reduce of Tk 7,784 million as of December 31, 2015. The calculation of Market Value Added is given below: Particulars
No. of shares
Market value
1,029,348,616
18.10
18,631
Book value
1,029,348,616
25.66
26,415
Market value added
Value in Taka
Taka in million
(7,784)
241
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Disclosure for Non-Performing Assets Movements of NPA Particulars Opening Balance
Amount in Taka (Million) 2015
2014
11,214.64
7,814.50
Add: Addition NPA during the period
12,988.55
11,939.86
Less: NPA recovered during the period
(2,757.89)
(2,209.31)
Less: NPA declassified/regularized as performing during the period
(7,214.21)
(3,648.76)
Less: NPA written-off during the period
(2,348.29)
(2,681.65)
Closing Balance (NPA)
11,882.80
11,214.64
Sector-wise Break up of NPA Particulars
Amount in Taka (Million) 2015
2014
Corporate
7,401.67
6,014.47
Retail
1,421.76
1,453.83
SME
2,919.56
3,637.60
133.94
108.73
5.87
-
11,882.80
11,214.64
321
238
Credit Card Short term Agri. Credit & Microcredit Total NPA No. of rescheduled loans during the year (incl. Retail Banking Div. & SME Banking Div.) Movement of Provisions made against NPA Particulars Opening Balance
Amount in Taka (Million) 2015
2014
4,586.30
3,733.05
2,789.61
2,976.18
Less: Adjustmen during the year
(1,626.61)
(2,122.93)
Closing Balance
5,749.30
4,586.30
Add: addition during the year
Statement of Value Added and its Distribution Particulars
Amount in Taka (Million) 2015
2014
Government as Taxes Tax
855.15
1,247.77
TDS
2,330.55
2,588.45
VAT
588.41
472.50
Total
3,774.10
4,308.73
Shareholders as Dividend
1,544.02
1,286.69
Employees as bonus/remuneration
3,601.94
3,288.41
Retained by the entity Market Share information of the Company's product/services Economic value added
242
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Shareholdersâ&#x20AC;&#x2122; Information
Financial Calendar 2015 Quarterly Results Audited consolidated results for the 4th quarter ended 31 December 2014
Announced on
26 February 2015
Unaudited consolidated results for the 1st quarter ended 31 March 2015
Announced on
14th May 2015
Unaudited consolidated results for the 2nd quarter and half-year ended 30 June 2015
Announced on
29th July 2015
Unaudited consolidated results for the 3rd quarter ended 30 September 2015
Announced on
25th October 2015
Dividends Distribution of cash dividend of 15.00% in respect of financial year ended 31 December 2014
1st April 2015
Notice of Annual General Meeting
26 February 2015
Annual General Meeting
30th March 2015
Stock Details Particulars
DSE
CSE
PRIMEBANK
PBBANK
Company Code
11116
22013
Listing year
Stock Symbol
2000
1999
Market category
A
A
Electronic share
Yes
Yes
1
1
1,029,348,616
1,029,348,616
Market lot Total number of securities
Availability of information about PBL Annual Report 2015 and other information about PBL may be viewed on PBLâ&#x20AC;&#x2122;s website www.primebank.com.bd PBL provides copies of Annual Reports to the Bangladesh Securities and Exchange Commission, Bangladesh Bank, Dhaka Stock Exchange and Chittagong Stock Exchange for their reference. Investors may read them at their public reference room or library.
243
Shareholdersâ&#x20AC;&#x2122; Information
SOME GLIMPSES OF 20TH AGM
244
PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
245
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Independent Auditors’ Report to the shareholders of Prime Bank Limited
Report on the Financial Statements We have audited the accompanying consolidated financial statements of Prime Bank Limited and its subsidiaries (the “Group”) as well as the separate financial statements of Prime Bank Limited (the “Bank”), which comprise the consolidated and separate balance sheets as at 31 December 2015, and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements and Internal Controls Management is responsible for the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards as stated in note# 2.19 and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 (As amended in 2013) and the Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.
Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements of the Group and separate financial statements of the Bank are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated financial statements of the Group and separate financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and also separate financial statements of the Bank. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank give a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2015, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards as stated in note# 2.19.
Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991 as amended in 2013 and the rules and regulations issued by Bangladesh Bank, we also report the following:
246
(a)
we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;
(b)
to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial Statements and Internal Controls:
PRIME BANK A N N UA L R E P O RT 2 0 1 5
i.
Fina ncia l Sta tements
internal audit, internal control and risk management arrangements of the Group and the Bank, as disclosed in note# 2.11 & 2.20 (i & ii) appeared to be adequate with immaterial control deficiencies as identified in management report;
ii.
inothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Bank and its related entities other than matters disclosed in note # 2.20 (iii) of these financial statements;
(c)
financial statements of subsidiary companies of the Bank namely Prime Bank Investment Limited and Prime Bank Securities Limited have been audited by Howlader Yunus & Co. Chartered Accountants. Prime Exchange Co. (Pte) Limited, Singapore and PBL Finance (Hong Kong) Limited have been audited by C.C. Yang & Co. Chartered Accountants of Singapore and T.O Yip & Co. Limited, Certified Public Accountant. The financial statements PBL Exchange (UK) Limited have been certified by Reedy Siddiqui & Kabani as on 31st December 2015. These accounts have been properly reflected in the consolidated financial statements;
(d)
in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books;
(e)
the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance sheet and separate profit and loss account of the Bank dealt with by the report are in agreement with the books of account;
(f)
the expenditure incurred was for the purposes of the Bankâ&#x20AC;&#x2122;s business;
(g)
the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and Bangladesh Financial Reporting Standard as explained in note# 2.19 as well as with related guidelines, circulars issued by Bangladesh Bank and the instruction given by Bangladesh Bank vide Letter No: DBI-1/90/2016-382 dated 13 March 2016 after the tripartite meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the Management of Prime Bank Limited held on 1 March 2016;
(h)
adequate provisions have been made for loans & advances which are, in our opinion, doubtful of recovery, and while making said provisions instructions given in Bangladesh Bank Letter No. DBI-1/90/2016/382 dated 13.03.2016 has been complied with;
(i)
the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;
(j)
the information and explanations required by us have been received and found satisfactory; and
(k)
we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 9,650 person hours for the audit of the books and accounts of the Bank.
ACNABIN
Syful Shamsul Alam & Co
Chartered Accountants
Chartered Accountants
Dhaka, 21 March 2016
247
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Consolidated Balance Sheet as at 31 December 2015 Particulars
Notes
Amount in Taka 2015
2014
PROPERTY AND ASSETS Cash
3
In hand (including foreign currencies)
2,447,641,587
2,365,051,461
Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) Balance with other banks and financial institutions
15,069,879,177
15,194,723,820
17,517,520,764
17,559,775,281
4
In Bangladesh Outside Bangladesh
132,673,471
272,467,219
1,878,431,497
1,331,769,386
2,011,104,968
1,604,236,605
420,000,000
-
Government
61,752,411,722
70,928,312,066
Others
2,878,854,992
3,567,999,947
64,631,266,714
74,496,312,013 145,825,411,559
Money at call and short notice
5
Investments
6
Loans, advances and lease /investments Loans, cash credits, overdrafts etc./ investments
7
145,181,210,690
Bills purchased and discounted
8
9,689,917,573
6,893,824,341
154,871,128,263
152,719,235,900
Fixed assets including premises, furniture and fixtures
9
6,541,317,961
6,648,653,116
Other assets
10
7,261,557,214
3,144,775,578
Non - banking assets
11
220,500,640
176,340,640
253,474,396,524
256,349,329,133
10,749,469,636
8,083,203,317
28,225,121,254
27,556,891,987
Total assets LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents
12
Deposits and other accounts
13
Current / Al-wadeeah current deposits Bills payable Savings bank / Mudaraba savings deposits Term deposits / Mudaraba term deposits
2,387,277,687
2,942,889,234
30,713,923,933
25,106,122,963
133,488,225,827
149,197,612,596
Bearer certificate of deposit
-
-
Other deposits
-
-
194,814,548,701
204,803,516,780
Other liabilities
14
Total liabilities
21,406,506,239
18,881,002,879
226,970,524,576
231,767,722,976
Capital / Shareholders' equity Paid -up capital
15.2
10,293,486,160
10,293,486,160
Share premium
15.8
2,241,230,396
2,241,230,396
Minority Interest
15.9
60
60 8,184,646,579
Statutory reserve
16
8,735,049,935
Revaluation gain / loss on investments
17
1,833,805,066
461,794,800
Revaluation reserve
18
1,511,411,431
1,503,518,556
Foreign currency translation gain
19
General reserve Surplus in profit and loss account / Retained earnings
248
6,145,156
4,892,900
28,002,888
28,002,888
1,854,740,856
1,864,033,818
Total Shareholders' equity
26,503,871,948
24,581,606,157
Total liabilities and Shareholders' equity
253,474,396,524
256,349,329,133
20
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Consolidated Balance Sheet as at 31 December 2015 Particulars
Amount in Taka
Notes
2015
2014
OFF - BALANCE SHEET EXPOSURES Contingent liabilities
21
Acceptances and endorsements
21.1
26,440,235,317
Letters of guarantee
21.2
63,736,691,078
61,408,149,593
Irrevocable letters of credit
21.3
16,902,956,132
20,698,448,178
Bills for collection
21.4
8,607,304,495
9,262,180,366
Other contingent liabilities
26,742,389,739
-
-
115,687,187,022
118,111,167,876
Documentary credits and short term trade -related transactions
-
-
Forward assets purchased and forward deposits placed
-
-
Undrawn note issuance and revolving underwriting facilities
-
-
Undrawn formal standby facilities , credit lines and other commitments
-
-
Liabilities against forward purchase and sale
-
-
-
-
115,687,187,022
118,111,167,876
Other commitments
Total Off-Balance Sheet exposures including contingent liabilities
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Director
Director
Managing Director
See annexed auditorsâ&#x20AC;&#x2122; report to the Shareholders of the date.
ACNABIN
Syful Shamsul Alam & Co
Chartered Accountants
Chartered Accountants
Dhaka, 21 March 2016
249
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Consolidated Profit and Loss Account for the year ended 31 December 2015 Particulars
Notes
Amount in Taka 2015
2014
Interest income / profit on investments
23
15,566,795,107
18,467,920,602
Interest / profit paid on deposits, borrowings, etc.
24
(14,294,633,015)
(15,629,158,843)
1,272,162,093
2,838,761,759
Net interest / net profit on investments Investment income
25
8,029,421,639
6,258,530,291
Commission, exchange and brokerage
26
2,104,189,655
2,233,954,643
Other operating income
27
907,725,432
882,869,884
12,313,498,818
12,214,116,577
28
3,691,493,512
3,394,371,944
Rent, taxes, insurance, electricity, etc.
29
718,948,414
627,590,438
Legal expenses
30
58,841,460
39,566,713
Postage, stamp, telecommunication, etc.
31
146,287,965
120,248,747
Stationery, printing, advertisements, etc.
32
225,171,225
216,460,016
Managing Director's salary and fees
33
10,060,931
8,674,785
Directors' fees
34
3,789,780
4,082,879
Auditors' fees
35
2,334,082
2,097,114
Charges on loan losses
36
-
-
Depreciation and repair of Bank's assets
37
407,505,456
417,210,587
Other expenses
38
Total operating income (A) Salaries and allowances
1,102,837,129
1,156,252,723
Total operating expenses (B)
6,367,269,955
5,986,555,946
Profit / (loss) before provision (C=A-B)
5,946,228,863
6,227,560,631
Specific provision
2,690,000,000
2,643,500,000
General provision
293,000,000
114,000,000
39,900,000
76,000,000
Provision for loans / investments
39
Provision for Off-Shore Banking Units Provision for off-balance sheet exposures
Provision for diminution in value of investments
68,400,000
(1,510,000)
3,091,300,000
2,831,990,000
(53,959,104)
(57,065,592)
Provision for impairment of client margin loan
46,205,358
248,810,195
Other provisions
56,106,426
51,598,089
Total provision (D)
3,139,652,680
3,075,332,692
Total profit / (loss) before taxes (C-D)
2,806,576,182
3,152,227,939
734,941,671
1,200,938,014
Provision for taxation: Current tax
40
Deferred tax
Net profit after taxation Retained earnings brought forward from previous year
250
20.1
(101,367,093)
(294,247,041)
633,574,578
906,690,973
2,173,001,604
2,245,536,966
232,142,608
274,516,818
2,405,144,212
2,520,053,784
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Consolidated Profit and Loss Account for the year ended 31 December 2015 Particulars
Amount in Taka
Notes
2015
2014
Appropriations Statutory reserve Minority interest General reserve
550,403,356
656,019,965
0.40
0.28
-
-
550,403,356
656,019,966
Retained surplus
20
1,854,740,856
1,864,033,818
Earnings per share (EPS)
45
2.11
2.18
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Director
Director
Managing Director
See annexed auditorsâ&#x20AC;&#x2122; report to the Shareholders of the date.
ACNABIN
Syful Shamsul Alam & Co
Chartered Accountants
Chartered Accountants
Dhaka, 21 March 2016
251
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Consolidated Cash Flow Statement for the year ended 31 December 2015 Particulars A)
Notes
Amount in Taka 2015
2014
Cash flows from operating activities Interest receipts in cash
21,607,203,523
23,664,151,487
Interest payments
(15,085,117,537)
(16,816,635,431)
Dividend receipts
65,877,165
79,659,231
2,104,189,418
2,233,954,643
53,752,852
26,343,014
Cash payments to employees
(3,721,479,301)
(3,470,154,157)
Cash payments to suppliers
(658,590,295)
(774,889,053)
(855,145,169)
(1,247,770,954)
Fees and commission receipts in cash Recoveries of loans previously written off
Income taxes paid Receipts from other operating activities
41
3,510,137,543
2,010,032,909
Payments for other operating activities
42
(1,649,523,781)
(1,622,403,717)
5,371,304,418
4,082,287,972
-
-
7,477,261,344
(11,634,112,033)
-
-
(3,778,504,882)
4,158,023,522
(489,017,506)
(4,019,982,179)
Deposits from other banks / borrowings
(2,459,520,522)
3,866,183,305
Deposits from customers
(6,636,275,008)
2,727,186,380
(555,611,547)
861,472,179
-
-
1,228,846,213
2,276,255,420
(5,212,821,908)
(1,764,973,406)
158,482,510
2,317,314,566
-
5,000,000
(41,355,914)
(17,833,595)
(240,329,738)
(543,794,029)
-
(3,624,186)
2,997,454
1,646,486
(278,688,198)
(558,605,324)
Cash generated from operating activities before changes in operating assets and liabilities Increase / (decrease) in operating assets and liabilities Statutory deposits Purchase of trading securities (Treasury bills) Loans and advances to other banks Loans and advances to customers Other assets
43
Other liabilities account of customers Trading liabilities Other liabilities
Net cash from operating activities B)
Cash flows from investing activities Debentures Payments for purchases of securities Purchase of property, plant and equipment Payment against lease obligation Proceeds from sale of property, plant and equipment Net cash used in investing activities
252
44
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Consolidated Cash Flow Statement for the year ended 31 December 2015 Particulars C)
Notes
Amount in Taka 2015
2014
Cash flows from financing activities Receipts from issue of sub-ordinated bond
2,500,000,000
-
-
-
(1,600,253,349)
(1,342,610,131)
Net cash from in financing activities
899,746,651
(1,342,610,131)
D)
Net increase / (decrease) in cash and cash equivalents (A+ B + C)
779,540,963
416,099,111
E)
Effects of exchange rate changes on cash and cash equivalents
5,229,283
3,471,253
F)
Cash and cash equivalents at beginning of the year
19,170,200,686
18,750,630,322
G)
Cash and cash equivalents at end of the year (D+E+F)
19,954,970,932
19,170,200,686
2,447,641,587
2,365,051,461
15,069,879,177
15,194,723,820
Balance with other banks and financial institutions
2,011,104,968
1,604,236,605
Money at call and short notice
420,000,000
-
-
-
6,345,200
6,188,800
19,954,970,932
19,170,200,686
Receipts from issue of ordinary share including premium net off Tax Dividend paid
Cash and cash equivalents at end of the year Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies)
Reverse repo Prize bonds (note-6a)
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Director
Director
Managing Director
Dhaka, 21 March 2016
253
254 Taka
-
-
-
-
-
-
Net profit for the year
Dividends (Bonus shares)
Cash dividend
Minority interest
Issue of share capital-right share
Appropriation made during the year
550,403,356
-
-
-
-
-
-
-
Dhaka, 21 March 2016
Chairman
28,002,888
28,002,888
-
-
-
-
-
-
-
-
-
-
-
28,002,888
28,002,888
Taka
General reserve
2,241,230,396
2,241,230,396
-
-
-
-
-
-
-
-
-
-
-
2,241,230,396
-
2,241,230,396
Taka
Share premium Taka
-
-
-
-
-
-
-
-
60
-
60
60
60
-
-
0.12
Minority interest
Director
-
-
-
-
-
-
1,833,805,066
-
3,134,505,551
(1,762,495,285)
-
461,794,800
-
461,794,800
Taka
Revaluation gain / loss on investments
1,503,518,556
461,794,800
1,511,411,431 1,833,805,066
-
-
-
-
-
-
-
-
-
-
7,892,875
1,503,518,556
-
1,503,518,556
Taka
Revaluation reserve
Director
These financial statements should be read in conjunction with the annexed notes 1 to 51.
8,184,646,579
10,293,486,160
-
Net gains and losses not recognized in the income statement
10,293,486,160 8,735,049,935
-
Currency translation differences
-
Balance as at 31 December 2014
-
Surplus / (deficit) on account of revaluation of investments
-
Balance as at 31 December 2015
-
Adjustment of last year revaluation gain on investments
-
8,184,646,579
10,293,486,160
-
-
-
8,184,646,579
Taka
10,293,486,160
Surplus / (deficit) on account of revaluation of properties
Restated balance
Changes in accounting policy / Last year's profit
Balance as at 1 January 2015
Particulars
Statutory reserve
Paid up capital
for the year ended 31 December 2015
Consolidated Statement of Changes in Equity
4,892,900
6,145,156
-
-
-
-
-
-
6,145,156
1,252,256
-
-
-
4,892,900
-
4,892,900
Taka
F.C. translation gain
-
-
0.12
(1,600,253,349)
-
2,173,001,605
25,931,123,692
(30,385,606)
3,134,505,551
(1,762,495,285)
7,892,875
24,581,606,157
-
24,581,606,157
Taka
Total
Managing Director
1,864,033,818 24,581,606,157
1,854,740,856 26,503,871,948
(550,403,356)
-
-
(1,600,253,349)
-
2,173,001,605
1,832,395,956
(31,637,862)
-
-
-
1,864,033,818
-
1,864,033,818
Taka
Retained earnings
Fi na n c i a l S t a t e m en ts PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Balance Sheet as at 31 December 2015 Particulars
Notes
Amount in Taka 2015
2014
PROPERTY AND ASSETS Cash
3a
In hand (including foreign currencies)
2,391,184,957
2,340,059,101
Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) Balance with other banks and financial institutions
15,069,879,177
15,194,723,820
17,461,064,134
17,534,782,921
4a
In Bangladesh Outside Bangladesh Money at call and short notice
5
Investments
6a
Government Others
112,219,948
258,877,340
1,845,464,037
1,253,809,238
1,957,683,985
1,512,686,578
420,000,000
-
61,752,411,722
70,928,312,066
980,449,941
1,713,515,478
62,732,861,663
72,641,827,544 142,780,100,320
Loans, advances and lease / investments Loans, cash credits, overdrafts, etc./ investments
7a
143,778,651,854
Bills purchased and discounted
8a
8,085,882,637
4,586,552,073
151,864,534,491
147,366,652,393
Fixed assets including premises, furniture and fixtures
9a
6,516,429,422
6,612,686,818
Other assets
10a
10,988,158,051
9,067,223,175
11
220,500,640
176,340,640
252,161,232,386
254,912,200,069
10,442,199,709
7,668,875,959
28,234,427,685
27,586,626,484
Non - banking assets Total assets LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents Deposits and other accounts
12a 13a.1.c
Current / Al-wadeeah current deposits Bills payable
2,387,277,687
2,942,889,234
Savings bank / Mudaraba savings deposits
30,713,923,933
25,106,122,963
Term deposits / Mudaraba term deposits
133,489,471,451
149,202,091,888
Bearer certificate of deposit
-
-
Other deposits
-
-
194,825,100,756
204,837,730,569
Other liabilities
14a
Total liabilities
20,478,900,456
17,944,881,561
225,746,200,921
230,451,488,089
Capital / Shareholders' equity Paid up capital
15.2
10,293,486,160
10,293,486,160
Share premium
15.8
2,241,230,396
2,241,230,396
Statutory reserve
16
8,735,049,935
8,184,646,579
Revaluation gain / (loss) on investments
17a
1,791,992,895
441,469,626
Revaluation reserve
18
1,511,411,431
1,503,518,556
Foreign currency translation gain
19a
5,995,523
5,086,036
Other reserve Surplus in profit and loss account / Retained earnings Total Shareholders' equity Total liabilities and Shareholders' equity
20a
-
-
1,835,865,125
1,791,274,627
26,415,031,465
24,460,711,980
252,161,232,386
254,912,200,069
255
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Balance Sheet as at 31 December 2015
Particulars
Amount in Taka
Notes
2015
2014
OFF - BALANCE SHEET EXPOSURES Contingent liabilities
21a
Acceptances and endorsements
21a.1
26,440,235,317
Letters of guarantee
21a.2
63,736,691,078
61,408,149,593
Irrevocable letters of credit
21a.3
16,902,956,132
20,698,448,178
Bills for collection
21a.4
8,607,304,495
9,262,180,366
Other contingent liabilities
26,742,389,739
-
-
115,687,187,022
118,111,167,876
Documentary credits and short term trade -related transactions
-
-
Forward assets purchased and forward deposits placed
-
-
Undrawn note issuance and revolving underwriting facilities
-
-
Undrawn formal standby facilities , credit lines and other commitments
-
-
Liabilities against forward purchase and sale
-
-
Other commitments
Total Off-Balance Sheet exposures including contingent liabilities
-
-
115,687,187,022
118,111,167,876
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Director
Director
Managing Director
See annexed auditorsâ&#x20AC;&#x2122; report to the Shareholders of the date.
ACNABIN
Syful Shamsul Alam & Co
Chartered Accountants
Chartered Accountants
Dhaka, 21 March 2016
256
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Profit and Loss Account for the year ended 31 December 2015 Particulars
Notes
Amount in Taka 2015
2014
Interest income / profit on investments
23a
15,550,674,068
18,445,885,369
Interest / profit paid on deposits, borrowings, etc.
24a
(14,256,808,068)
(15,573,523,588)
1,293,866,000
2,872,361,781
Net interest / net profit on investments Investment income
25a
7,988,726,640
6,194,358,289
Commission, exchange and brokerage
26a
1,956,084,340
2,033,125,238
Other operating income
27a
834,179,112
806,468,141
12,072,856,092
11,906,313,449
Total operating income (A) Salaries and allowances
28a
3,591,875,120
3,279,735,275
Rent, taxes, insurance, electricity, etc.
29a
675,180,264
582,596,952
Legal expenses
30a
55,050,183
35,854,242
Postage, stamp, telecommunication, etc.
31a
137,639,651
112,446,490
Stationery, printing, advertisements, etc.
32a
221,594,008
210,809,010
Managing Director's salary and fees
33
10,060,931
8,674,785
Directors' fees
34a
3,452,280
3,799,929
Auditors' fees
35a
1,150,000
1,150,000
Charges on loan losses
36
-
-
Depreciation and repair of Bank's assets
37a
394,546,098
400,253,143
Other expenses
38a
1,075,884,353
1,114,305,707
6,166,432,888
5,749,625,533
5,906,423,204
6,156,687,916
Specific provision
2,690,000,000
2,643,500,000
General provision
293,000,000
114,000,000
Provision for Off-Shore Banking Units
39,900,000
76,000,000
Provision for off-balance sheet exposures
68,400,000
(1,510,000)
3,091,300,000
2,831,990,000
Provision for diminution in value of investments
7,000,000
(7,000,000)
Other provisions
56,106,426
51,598,089
3,154,406,426
2,876,588,089
2,752,016,778
3,280,099,827
713,000,000
1,180,000,000
(100,000,000)
(292,800,000)
613,000,000
887,200,000
2,139,016,778
2,392,899,827
247,251,703
54,394,765
2,386,268,481
2,447,294,592
Total operating expenses (B) Profit / (loss) before provision (C=A-B) Provision for loans / investments
39a
Total provision (D) Total profit / (loss) before taxes (C-D) Provision for taxation Current tax
40a
Deferred tax
Net profit after taxation Retained earnings brought forward from previous years
20.1a
257
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Profit and Loss Account for the year ended 31 December 2015 Particulars
Amount in Taka
Notes
2015
2014
Appropriations Statutory reserve
550,403,356
656,019,965
-
-
550,403,356
656,019,965
General reserve
Retained surplus
20a
1,835,865,125
1,791,274,627
Earnings per share (EPS)
45a
2.08
2.32
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Director
Director
Managing Director
See annexed auditorsâ&#x20AC;&#x2122; report to the Shareholders of the date.
ACNABIN
Syful Shamsul Alam & Co
Chartered Accountants
Chartered Accountants
Dhaka, 21 March 2016
258
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Cash Flow Statement for the year ended 31 December 2015 Particulars A)
Notes
Amount in Taka 2015
2014
Cash flows from operating activities Interest receipts in cash
21,186,164,523
23,176,223,192
Interest payments
(14,641,080,504)
(16,338,208,336)
Dividend receipts
65,877,165
79,659,231
1,956,084,340
2,033,125,238
53,752,852
26,343,014
(3,621,860,910)
(3,356,517,489)
Cash payments to suppliers
(683,457,071)
(650,305,772)
Income taxes paid
(855,145,169)
(1,247,770,954)
Fees and commission receipts in cash Recoveries of loans previously written off Cash payments to employees
Receipts from other operating activities
41a
3,394,602,098
1,866,257,765
Payments for other operating activities
42a
(1,564,841,681)
(1,482,600,260)
Cash generated from operating activities before changes in operating assets and liabilities
5,290,095,645
4,106,205,631
Increase / (decrease) in operating assets and liabilities Statutory deposits Purchase of trading securities (Treasury bills) Loans and advances to other banks Loans and advances to customers Other assets
43a
Deposits from other banks / borrowings Deposits from customers Other liabilities account of customers Trading liabilities Other liabilities
Net cash from operating activities
B)
44a
-
-
7,477,261,344
(11,634,112,033)
-
-
(6,124,494,616)
4,089,651,062
1,706,829,254
(4,074,433,703)
(2,352,463,091)
3,859,709,442
(6,612,613,273)
2,784,707,590
(555,611,547)
861,472,179
-
-
1,237,361,514
2,338,428,624
(5,223,730,415)
(1,774,576,839)
66,365,230
2,331,628,792
-
5,000,000
2,564,668
25,040,898
-
-
(240,329,738)
(541,008,697)
-
(3,624,186)
2,997,454
1,646,486
(234,767,616)
(512,945,499)
Cash flows from investing activities Debentures Proceeds from sale of securities Payments for purchases of securities Purchase of property, plant and equipment Payment against lease obligation Proceeds from sale of property, plant and equipment Net cash used in investing activities
259
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Cash Flow Statement for the year ended 31 December 2015
Particulars C)
Notes
Amount in Taka 2015
2014
Cash flows from financing activities Receipts from issue of sub-ordinated bond
2,500,000,000
-
-
-
(1,544,022,924)
(1,286,685,770)
955,977,076
(1,286,685,770)
787,574,690
531,997,523
3,860,330
2,039,687
19,053,658,299
18,519,621,089
19,845,093,319
19,053,658,299
2,391,184,957
2,340,059,101
(including foreign currencies)
15,069,879,177
15,194,723,820
Balance with other banks and financial institutions
1,957,683,985
1,512,686,578
Money at call and short notice
420,000,000
-
-
-
6,345,200
6,188,800
19,845,093,319
19,053,658,299
Receipts from issue of ordinary share including premium net off Tax Dividend paid Net cash from in financing activities
D)
Net increase / (decrease) in cash and cash equivalents (A+ B + C)
E)
Effects of exchange rate changes on cash and cash equivalents
F)
Cash and cash equivalents at beginning of the year
G)
Cash and cash equivalents at end of the year (D+E+F)
Cash and cash equivalents at end of the year Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (s)
Reverse repo Prize bonds (note-6a)
These financial statements should be read in conjunction with the annexed notes 1 to 51.
Chairman
Dhaka, 21 March 2016
260
Director
Director
Managing Director
-
Net profit for the year
Dividends (Bonus shares)
Cash dividend
Share premium
Issue of share capital (Right share)
Appropriation made during the year
Dhaka, 21 March 2016
Chairman
2,241,230,396
2,241,230,396
-
-
-
-
-
-
-
-
-
-
8,184,646,579
8,735,049,935
550,403,356
-
-
-
-
-
-
-
-
-
-
8,184,646,579
-
8,184,646,579
Taka
Statutory reserve
1,503,518,556
1,511,411,431
-
-
-
-
-
-
-
-
-
-
7,892,875
1,503,518,556
-
1,503,518,556
Taka
Revaluation reserve
441,469,626
1,791,992,895
Director
Director
-
-
-
-
-
-
1,791,992,895
-
3,113,018,555
(1,762,495,285)
-
441,469,626
-
441,469,626
Taka
Revaluation gain / loss on investments
These financial statements should be read in conjunction with the annexed notes 1 to 51.
10,293,486,160
-
Net gains and losses not recognized in the income statement
Balance as at 31 December 2014
-
Currency translation differences
10,293,486,160
-
Surplus / deficit on account of revaluation of investments
Balance as at 31 December 2015
-
Adjustment of last year revaluation gain on investments
-
2,241,230,396
10,293,486,160 -
-
-
2,241,230,396
Taka
Taka 10,293,486,160
Share premium
Paid-up Capital
Surplus / deficit on account of revaluation of properties
Restated balance
Changes in accounting policy / Last year's profit
Balance as at 1 January 2015
Particulars
for the year ended 31 December 2015
Statement of Changes in Equity
5,086,036
5,995,523
-
-
-
-
-
-
5,995,523
909,487
-
-
-
5,086,036
5,086,036
Taka
F.C. Translation gain
-
-
-
(1,544,022,924)
-
2,139,016,778
25,820,037,611
909,487
3,113,018,555
(1,762,495,285)
7,892,875
24,460,711,980
-
24,460,711,980
Taka
Total
Managing Director
1,791,274,627 24,460,711,980
1,835,865,125 26,415,031,465
(550,403,356)
-
-
(1,544,022,924)
-
2,139,016,778
1,791,274,627
-
-
-
-
1,791,274,627
-
1,791,274,627
Taka
Retained earnings
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
261
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Notes to the Financial Statements for the year ended 31 December 2015 1.1 Prime Bank Limited The Prime Bank Limited (â&#x20AC;&#x153;the Bankâ&#x20AC;?) was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch from April 17, 1995 under the license issued by Bangladesh Bank. Presently, the Bank has 145 (One Hundred Forty Five) branches including 18 (Eighteen) SME Centre/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong Port, Chittagong. Out of the above 145 branches, 05 (five) branches are designated as Islamic Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5 (Five) subsidiary Companies (3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering (IPO) in 1999 and its shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share. 1.1.1 Principal activities The principal activities of the Bank are to provide all kinds of commercial banking services to customers through its branches and SME centres/ branches in Bangladesh. The Bank also provides off-shore banking services through its 3 (Three) Off-shore Banking Units (OBU). 1.1.2 Off-shore Banking Units The Bank obtained permission of Off-shore Banking Units vide letter no. BRPD(P)744(84)/2001-868 dated March 19, 2001. The Bank commenced operation of its one unit from March 15, 2007. Presently the Bank has 3 (Three) Off-shore Banking Units (OBU) located at Dhaka EPZ, Chittagong EPZ and Adamjee EPZ. The Off-shore Banking Units are governed under the rules and guidelines of Bangladesh Bank. Separate financial statements of Off -shore Banking Units are shown in Annexure-K. 1.2 The Bank has 5 (Five) Subsidiaries with following detail as presented in note no. 1.2.1 to 1.2.5: 1.2.1 Prime Bank Investment Limited Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited incorporated as a public limited company on April 27, 2010 with the registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no. C-84266/10, dated April 28, 2010 which has commenced its business on the same date. Total 299,999,994 shares (out of 300,000,000 shares) of Prime Bank Investment Limited are held by Prime Bank Limited and only 6 shares are held by 6 Senior Executives of Prime Bank Limited and Prime Bank Investment Limited. The main objectives of the company for which it was established are to carry out the business of full-fledged merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services etc. Securities and Exchange Commission (SEC) thereafter issued a full fledged merchant banking license in favor of Prime Bank Investment Limited, vide letter no. SEC/Reg/MB/ SUB/2010/03/208, dated June 02, 2010 with effect from June 01, 2010. Financial Statements of the company are shown in Annexure-L. 1.2.2 Prime Bank Securities Limited Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies Act 1994 vide certificate of incorporation no. C-84302 /10. Prime Bank Securities Limited became member of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for brokerage transaction vide Bangladesh Securities & Exchange Commission certificate no. 3.1/DSE-219/2010/429, dated September 16, 2010 and 3.2/CSE-141/2010/239, dated August 31, 2010 respectively. Prime Bank Securities Limited commenced its operation from May 2011. The main objectives of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company. Prime Bank Limited and Prime Bank Investment Limited hold 95% and 5% share of Prime Bank Securities Limited respectively. Financial Statements of the company are shown in Annexure-M. 1.2.3 Prime Exchange Co. (Pte) Limited, Singapore Prime Exchange Co. (Pte) Ltd., a fully owned subsidiary company of Prime Bank Limited was incorporated in Singapore on January 06, 2006 and commenced its remittance business from July 08, 2006 under the remittance license issued by the Monetary Authority of Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act (Chapter 187) with 1 (One) branch located at 2A Desker Road, (2nd floor), Singapore 209549. In 2011, the Company has also opened another Branch located at Jurong East Branch, Block: 134 #01-305 Jurong Gateway Road, Singapore 600134. The principal activities of the company are to carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried on or undertaken by remittance and exchange house. Financial Statements of the company are shown in Annexure-N. 1.2.4 PBL Exchange (UK) Limited PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and Wales under registration no. 7081093 dated November 19, 2009. The company is a wholly owned subsidiary of Prime Bank Limited. The company commenced its operation on August 02, 2010 with 3 (three) Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF. Financial Statements of the company are shown in Annexure-O.
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Notes to the Financial Statements for the year ended 31 December 2015 1.2.5 PBL Finance (Hong Kong) Limited PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong) Limited was incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business Registration no. 58197431 both dated April 7, 2011). PBL Finance (Hong Kong) Limited obtained Money Lending Licenses # 307/2011 issued by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011 with one branch located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong. Financial Statements of the company are shown in Annexure-P. 2.00 Significant accounting policies and basis of preparation of financial statements 2.1 Basis of accounting 2.1.1 Statement of compliance The financial statements of the Bank and its subsidiaries (the “Group”) have been made for the year ended on December 31, 2015 and are prepared under the historical cost basis, except for certain investments which are stated at fair/market value and freehold land which are measured at revalued amount, in accordance with the First Schedule (Sec-38) of the Bank Companies Act 1991 (as Ammended up to 2013), BRPD Circular # 14 dated June 25, 2003 and DFIM Circular # 11, dated December 23, 2009, other Bangladesh Bank Circulars, Bangladesh Accounting Standards (“BAS”) and Bangladesh Financial Reporting Standards (“BFRS”) adopted by the Institute of Chartered Accountants of Bangladesh (“ICAB”), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges’ listing regulations and other laws & rules applicable in Bangladesh. In cases where the requirements of Bangladesh Bank differ with those of BAS/BFRS, the requirements of Bangladesh Bank have been applied. In addition to foregoing directives and standards, the operation of Islamic Banking Branches are accounted for in accordance with Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, Bahrain, and BRPD circular no-15, dated November 09, 2009. A separate balance sheet, profit and loss account and a statement of profit paid on deposits are shown in Annexure-G and G(1) and the figures appearing in the annexure have been incorporated in the related heads of these financial statements as recommended by the Central Shariah Board for Islamic Banks in Bangladesh. 2.1.2 Basis of consolidation The consolidated financial statements include the financial statements of Prime Bank Limited and its subsidiaries, i.e. Prime Bank Investment Limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte) Limited, Singapore, PBL Exchange (UK) Limited and PBL Finance (Hong Kong) Limited prepared at the end of the financial year. The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard (BAS)-27, “Separate Financial Statements” and Bangladesh Financial Reporting Standard (BFRS)- 10, “Consolidated Financial Statements”. The consolidated financial statements are prepared for the same financial year ended on December 31, 2015. Subsidiary Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements from the date that control effectively commences until the date that the control effectively ceases. Subsidiary companies are consolidated using the purchase method of accounting. The overseas subsidiary companies i.e. Prime Exchange Co. (Pte) Limited, Singapore, Prime Exchange (UK) Limited and PBL Finance (Hong Kong) Limited has a common financial year ending December 31, 2015. The conversion policy of subsidiary companies is given below:
Particulars
Price
Prime Exchange Co.
PBL Exchange
PBL Finance
(Pte) Ltd., Singapore
(UK) Ltd.
(Hong Kong) Ltd.
For assets & liabilities
Closing price
55.49290
116.26680
10.12907
For income & expenses
Average price
57.18800
118.59095
10.08796
All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss resulting from transactions between Group are also eliminated on consolidation.
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Notes to the Financial Statements for the year ended 31 December 2015 2.1.3
Use of estimates and judgments In preparation of the financial statements management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a going concern basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The most significant areas where estimates and judgments have been applied are to calculate provision for loans, advances and investments as per Bangladesh Bank guideline.
2.1.4
Foreign currency transaction a) Foreign currency Items included in the financial statements of each entity in the group are measured using the currency of the primary economic environment in which the entity operates, i e. the functional currency. The financial statements of the group and the Bank are presented in BDT which is the Bank’s functional and presentation currency. b) Foreign currency translation Foreign currency transactions are converted into equivalent BDT using the prevailing exchange rates on the dates of respective transactions as per BAS-21, “ The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances held in US Dollar are converted into BDT at weighted average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar at buying rates of New York closing of the previous day and converted into equivalent BDT. Assets and liabilities & income and expenses of Off-shore Banking Units have been converted into BDT currency @ US$1 = Taka 78.5003 (closing rate as at 31st December 2015) and Tk77.9506 (average rate at year-end). c) Commitments Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated at rates mentioned in contracts. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in BDT terms at the rates of exchange prevailing on the balance sheet date. d) Translation gains and losses The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the translation of net investment in foreign subsidiary. e) Foreign operations The results and financial position of the Group’s operations whose functional currency is not Bangladeshi Taka are translated into Bangladeshi Taka as follows: i.
Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date.
ii.
Income and expenses in the income statement are translated at an average rate approximating the exchange rates at the year end;
iii.
Resulting exchange differences are recognized as a separate component of equity.
iv.
As per BAS 21, “Foreign Currency Transactions” i.e. foreign currency denominated both monetary and non-monetary items of the OBUs are translated at historical rate because the OBUs are considered as an integral part of the Bank’s operation not a foreign operation due to specific regulations governing the OBU and its unique nature.
f) Consolidation of Financial Statements of foreign operations In Consolidation, foreign exchange differences arising from the translation of net investments in foreign entities, as well as any borrowings are taken into capital reserve. When a foreign operation is disposed of, such currency translation differences are recognized in the income statement as part of the gain or loss on disposal. 2.1.5
Statement of cash flows Statement of cash flows have been prepared in accordance with the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.
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Notes to the Financial Statements for the year ended 31 December 2015 2.1.6
Liquidity statement The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as per the following basis [Annexure-I & I (1)]: i. Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis of their maturity term; ii. Investments are on the basis of their respective maturity; iii. Loans and advances / investments are on the basis of their repayment schedule; iv. Fixed assets are on the basis of their useful lives; v. Other assets are on the basis of their realization / amortization; vi. Borrowing from other Banks, financial institutions and agents, etc. are as per their maturity / repayment terms; vii. Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors; viii. Provisions and other liabilities are on the basis of their payment / adjustments schedule.
2.1.7
Reporting period These financial statements cover one calendar year from 1st January to 31st December 2015.
2.1.8
Offsetting Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously (note-9a, 14a.1, 25a, 26a.1).
2.2 2.2.1
Assets and basis of their valuation Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank management for its short-term commitments.
2.2.2
Loans, advances and lease / investments a. b.
c. d.
Loans and advances are stated in the balance sheet on gross basis. Interest / profit is calculated on a daily product basis but charged and accounted for on accrual basis. Interest / profit on classified loans and advances / investments is kept in suspense account as per Bangladesh Bank instructions and such interest / profit is not accounted for as income until realised from borrowers [note - 7a.10 (x)]. Interest / profit is not charged on bad and loss loans / investments as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts. Commission and discounts on bills purchased and discounted are recognized at the time of realization. Provision for loans and advances / investments is made on the basis of year-end review by the management following instructions contained in Bangladesh Bank BCD Circular no. 34, dated November 16, 1989, BCD Circular no. 20, dated December 27, 1994, BCD Circular no. 12, dated September 4, 1995, BRPD Circular no. 16, dated December 6, 1998, BRPD Circular no. 9, dated May 14, 2001, BRPD Circular no.02, February 2005, BRPD Circular no. 09, August 2005, BRPD Circular no. 17, dated December 06, 2005, BRPD circular no. 32, dated October 27, 2010, BRPD Circular no. 14, dated September 23, 2012, BRPD Circular no 19, dated December 27, 2012, BRPD Circular no 05, dated May 29, 2013 and BRPD Circular no 16, dated November 18, 2014 . The rates of provision for loans and advances / investments are given below: Particulars General provision on unclassified general loans and advances / investments General provision on unclassified small enterprise financing
f.
1% 0.25%
General provision on interest receivable on loans / investments
1%
General provision on unclassified loans / investments for housing finance, loans for professionals to set-up business and loans to share business
2%
General provision on unclassified consumer financing other than housing finance, loan for professionals and loans for BGs/MBs/SDs
5%
General provision on Special Mention Account (SMA) except Short Term Agriculture Loans
e.
Rate
0.25%-5%
Specific provision on substandard loans and advances / investments
20%
Specific provision on doubtful loans and advances / investments
50%
Specific provision on bad / loss loans and advances / investments
100%
Loans and advances / investments are written-off to the extent that (i) there is no realistic prospect of recovery, and (ii) against which legal cases are pending for more than five years as per guidelines of Bangladesh Bank. These writeoff however will not undermine / affect the claim amount against the borrower. Detailed memorandum records for all such write off accounts are meticulously maintained and followed up. Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.
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Notes to the Financial Statements for the year ended 31 December 2015 2.2.3
Investments All investment securities are initially recognised at cost, being fair value of the consideration given, including acquisition charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield method are taken to discount income. The valuation method of investments used are: Held to maturity (HTM) Investments which have ‘fixed or determinable payments’, and are intended to be ‘held to maturity’, other than those that meet the definition of ‘held at amortized cost-others’ are classified as held to maturity. Investment (HTM)-BHBFC is shown in the financial statements at cost price. Held for trading (HFT) Investments classified in this category are acquired principally for the purpose of selling or repurchasing -in short-trading or if designated as such by the management. After initial recognition, investments are measured at fair value and any change in the fair value is recognised in the statement of income for the period in which it arises. These investments are subsequently revalued at current market value on weekly basis as per Bangladesh Bank Guideline. Revaluation gain has been shown in revaluation reserve account & revaluation loss has been shown in Profit & Loss account. Value of investments has been enumerated as follows : Items
Applicable accounting value
Government treasury bills-HTM
Amortized value
Government treasury bills-HFT
Market value
Government treasury bonds-HTM
Amortized value
Government treasury bonds-HFT
Market value
Prize bond
At cost
BHBFCs-debenture
At cost
Investment in listed securities These securities are bought and held primarily for the purpose of selling them in future, or held for dividend income. These are reported at cost. Unrealized gains are not recognized in the profit and loss account. But provision for diminution in value of investment is provided in the financial statements where market price is below the cost price of investments as per Bangladesh Bank guideline (note-14a). Investment in unquoted securities Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of book value over cost for determining the carrying amount of investment in unlisted securities. Investments in subsidiary Investment in subsidiaries is accounted for under the cost method of accounting in the Bank’s financial statements in accordance with the BFRS-10. Accordingly, investments in subsidiaries are stated in the Bank’s balance sheet at cost, less impairment losses (if any). 2.2.4
Property, plant and equipment Property, plant & equipment are recognized if it is probable that future economic benefits associated with the assets will flow to the Bank and the cost of the assets can be reliably measured. a. All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. b. The Bank recognises, in the carrying amount of an item of property, plant and equipment, the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation, such as repairs and maintenance, is normally charged off as revenue expenditure in the period in which it is incurred. c. Revaluation of Land and Building: As per Bangladesh Accounting Standard (BAS-16) revaluation should be made with sufficient regulatory compliance to ensure that the carrying amount does not differ materially from that which would be determined using the fair value at the end of reporting period. The fair value of Land and Buildings is usually determined from market based evidence by an appraisal that is normally undertaken by professionally qualified Valuers. Therefore, any upward increases of the assets have positive impact on the capital adequacy of the Bank (50% of the asset revaluation is considered as Tier-2 “Supplementary Capital” subject to deduction as per roadmap for implementation of BASEL-III). With a view to qualify for higher capital adequacy, the bank revalued its Land and Buildings upon complying with all regulatory requirements. d. Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets other than vehicles, software and all fixed assets of ATM related on which straight line depreciation method is followed and no depreciation is charged on land:
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Notes to the Financial Statements for the year ended 31 December 2015 Category of fixed assets
2.2.5
2.2.6
Rate
Land
Nil
Buildings
2.50%
Furniture and fixtures
10%
Office equipments
20%
Library books
20%
Vehicles
20%
Category of fixed assets (ATM Assets)
Rate
Furniture and fixtures
10%
Office equipment
20%
e.
For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is charged up to the date of disposal.
f.
On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sale proceeds.
g.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset have been capitalized as part of the cost of the asset as per BAS-23.
h.
Leasehold properties are recorded at present value of minimum lease payments or fair market value, whichever is lower as per the provisions of BAS-17. The carrying value of leasehold properties is amortized over the remaining lease term or useful life of leasehold property, whichever is lower.
Intangible assets a.
An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset will flow to the entity and the cost of the assets can be measured reliably.
b.
Software represents the value of computer application software licensed for use of the Bank, other than software applied to the operation software system of computers. Intangible assets are carried at its cost, less accumulated amortization and any impairment losses.
c.
Initial cost comprises license fees paid at the time of purchase and other directly attributable expenditure that are incurred in customizing the software for its intended use.
d.
Expenditure incurred on software is capitalized only when it enhances and extends the economic benefits of computer software beyond their original specifications and lives and such cost is recognized as capital improvement and added to the original cost of software.
e.
Software is amortized using the straight line method over the estimated useful life of 10 (ten) years commencing from the date of the application. Software is available for use over the best estimate of its useful economic life.
Impairment of assets The policy for all assets or cash-generating units for the purpose of assessing such assets for impairment is as follows: The Bank assesses at the end of each reporting period or more frequently if events or changes in circumstances indicate that the carrying value of an asset may be impaired, whether there is any indication that an asset may be impaired. If any such indication exits, or when an annual impairment testing for an asset is required, the bank makes an estimate of the assetâ&#x20AC;&#x2122;s recoverable amount. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered as impaired and is written down to its recoverable amount by debiting to profit & loss account. Fixed assets are reviewed for impairment whenever events or charges in circumstances indicate that the carrying amount of an asset may be impaired.
2.2.7
Other assets Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity and such accounts may be quite insignificant in the overall financial condition of the Bank.
2.2.8
Securities purchased under re-sale agreement Securities purchased under re-sale agreements are treated as collateralized lending and recorded at the consideration paid and interest accrued thereon. The amount lent is shown as an asset either as loans and advances to customers or loans to other banks. The difference between purchase price and re-sale price is treated as interest received and accrued evenly over the life of Repo agreement.
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Notes to the Financial Statements for the year ended 31 December 2015 2.2.9
Receivables Receivables are recognised when there is a contractual right to receive cash or another financial asset from another entity.
2.2.10 Inventories Inventories measured at the lower of cost and net realizable value. 2.2.11
Leasing Leases are classified as finance leases whenever the ‘terms of the lease’ transfer substantially all the risks and rewards of ownership to the lessee as per BAS-17 “ Leases”. All other leases are classified as operating leases as per BAS-17 “Leases”. The Bank as lessor Amount due from lessees under finance leases are recorded as receivables at the amount of the Bank’s net investment in the leases (note-7a.2). Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the bank’s net investment outstanding in respect of the leases. The Bank as lessee Assets held under finance leases are recognised as assets of the Bank at their fair value at the date of acquisition or, if lower, at the present value of the minimum lease payments (note-9a). Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.
2.2.12
Non-banking assets Non-banking assets are acquired on account of the failure of a borrower to repay the loan on time after receiving the decree from the Court regarding the right and title of the mortgage property. The Bank has been awarded ownership of the mortgage properties according to the verdict of the Honorable Court in accordance with the section 33 (7) of “Artharin Adalat-2003”. The value of Non-Banking Assets has been determined and reported in the financial statemetns on the basis of valuation report of an Independent valuer. Details of which is presented in note-11.
2.2.13 Reconciliation of inter-bank and inter-branch account Accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material differences which may affect the financial statements significantly. Un-reconciled entries / balances in the case of inter-branch transactions as on the reporting date are not material. 2.3
Share Capital Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.
2.3.1
Authorised Capital Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of Association. Details are shown in note 15.1.
2.3.2
Paid up Capital Paid up capital represents total amount of shareholders’ capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders are ranked after all other shareholders and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in note note 15.2.
2.4
Statutory reserve As per Bank Companies Act, the Bank requires to transfer 20% of its current year’s profit before tax to statutory reserve until such reserve equals to its paid up capital. The Bank does comply with this requirement of law every year.
2.5
Revaluation reserve When an asset’s carrying amount is increased as a result of revaluation, the increase amount should be credited directly to equity under the head of revaluation surplus / reserve as per BAS-16: “Property, Plant and Equipment”. The Bank revalued its land and buildings during the year 2008 & 2013 which are absolutely owned by the Bank and the increased amount was transferred to revaluation reserve account accordingly. The tax effects on revaluation gain are measured and recognised in the financial statements as per BAS-12: “Income Taxes”.
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Notes to the Financial Statements for the year ended 31 December 2015 2.5.1
Minority interest in subsidiaries Minority interest in business is an accounting concept that refers to the portion of a subsidiary corporation’s stock that is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is always less than 50% of outstanding shares, else the corporation would cease to be a subsidiary of the parent. Minority interest belongs to other investors and is reported on the consolidated balance sheet of the owning company to reflect the claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders.
2.5.2
a) Prime bank sub-ordinated bond Prime Bank issued unsecured non-convertible sub-ordinated bond on 07 February 2010 after obtaining approval from Bangladesh Bank and Bangladesh Securities & Exchange Commission vide their letter # BRPD (BIC) 661 / 14B (P) /2009-319, dated 31 December 2009 and SEC / CI / CPLC-205 / 09 / 282, dated December 23, 2009 respectively. The Subordinated Bond is counted towards Tier- II capital of the Bank. The bond shall bear interest @ 11.50% per annum, payable semi-annually in arrear on 07 August and 07 February of each year. b) Prime Bank Sub-ordinated Bond-2 Prime Bank has issued another subordinated bond on February 19, 2015 namely “Prime Bank Subordinated Bond-2” after obtaining approval from Bangladesh Bank and Bangladesh Securities & Exchange Commission vide their letter #BRPD (BFIS) 661/14B (P)/2014-8043 dated December 18, 2014 and BSEC/CI/DS-16/2014/735 dated October 29, 2014 respectively. The bond shall bear interest with floating rate payable semi-annually on 19th February and 19th August each year. Floating rate is determined by calculating a benchmark rate i.e. peer banks’ most recent average FDR rate and 2.75% margin with a floor at 11.50% and capped at 14.00% p.a.
2.5.3
Share premium Share premium is the capital that the Bank raises upon issuing shares that is in excess of the nominal value of the shares. The share premium may be applied by the Bank in paying up unissued shares to be allotted to members as fully paid bonus shares or writing-off the preliminary expenses of the Bank or the expenses of or the commission paid or discount allowed on, any issue of shares or debentures of the Bank or in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the Bank. Share premium was shown in accounts after deduction of income tax @ 3% on share premium as per finance Act-2010.
2.6
Contingent liabilities A contingent liability is A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or A present obligation that arises from past events but is not recognised because: a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or b) the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated. Contingent assets are not recognised in the financial statements as this may results in the recognition of income which may never be realised.
2.7
Deposits and other accounts Deposits by customers and banks are recognised when the Bank enters into contractual provisions of the arrangements with the counterparties, which is generally on trade date, and initially measured at the consideration received.
2.8
Borrowings from other banks, financial institutions and agents Borrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from banks, financial institutions and agents. These are stated in the balance sheet at amounts payable. Interest paid / payable on these borrowings is charged to the profit & loss account. Disclosures of borrowings against Repo are shown in notes- 6a.9 to 6a.10 and 47
2.9 2.9.1
Basis for valuation of liabilities and provisions Provision for current taxation Provision for current income tax has been made as per prescribed rate in the Finance Act, 2015 on the accounting profit made by the Bank after considering some of the add backs to income and disallowances of expenditure as per income tax laws in compliance with BAS-12 “ Income Taxes”.
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Notes to the Financial Statements for the year ended 31 December 2015 2.9.2
Deferred taxation Deferred tax is accounted for in accordance with BAS 12: “Income Taxes”. Deferred tax normally results in a liability being recognized within the Statement of Financial Position. BAS 12 defines a deferred tax liability as being the amount of income tax payable in future periods. Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences, unused tax losses or unused tax credits can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis.
2.9.3
Benefits to the employees The retirement benefits accrued for the employees of the Bank as on reporting date have been accounted for in accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefits”. Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below: a) Provident fund Provident fund benefits are given to the permanent employees of the Bank in accordance with Bank’s service rules. Accordingly a trust deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone-5, Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52), read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 07, 1997. The Fund is operated by a Board of Trustees consisting six members (03 members from management and other 03 members from the Board of Directors) of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as subscription to the Fund. The Bank also contributes equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account on yearly basis. b) Gratuity fund The Bank operates a funded gratuity scheme on “Continuing Fund Basis”, in respect of which provision is made annually according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved the Prime Bank Limited Employees’ Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.03 5.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2, 3 & 4, read with the provisions of Part - C of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management) of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employees Benefits”. c) Welfare fund Prime Bank’s employees’ welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to the Fund in accordance with Bank Service Rules. The Fund has been established to provide medical support and coverage in the event of accidental death or permanent disabilities of the employees. Disbursement of loan from the fund is done as per rules for employees’ welfare fund. Retirement benefit are also provided from this fund. d) Incentive bonus 10% of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is distributed among the employees based on their performance. The bonus amount is paid annually, normally in first quarter of every following year and the costs are accounted for in the period to which it relates.
2.9.4
Other liabilities Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest suspense, accrued expenses, obligation under finance lease etc. Other liabilities are recognised in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance 1984 and internal policy of the Bank.
2.9.5
Provision for liabilities A provision is recognised in the balance sheet when the Bank has legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.
2.9.6
Provision for Off-balance sheet exposures Off-balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh Bank guidelines. As per BRPD Circular # 14, dated September 23, 2012, banks are advised to maintain provision @1% against off-balance sheet exposures.
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Notes to the Financial Statements for the year ended 31 December 2015 2.9.7
Provision for nostro accounts As per instructions contained in the circular letter no. FEPD (FEMO) / 01 / 2005-677 dated 13 September 2005 issued by Foreign Exchange Policy Department of Bangladesh Bank, provision is to be maintained for the un-reconciled debit balance of nostro account more than 3 months as on the reporting date of these financials. Since there is no unreconciled entries which are outstanding more than 3 months, no provision is required to be maintained.
2.9.8
Provision for rebate to good borrower As per BRPD Circular No .06 (19 March 2015) and BRPD Circular Letter No 03 (16 February 2016) issued by Bangladesh Banks are required to provide 10% rebate on the interest closed from “good borrowers” subject to some qualifing criteria. Accordingly, the Bank has kept provision in the financial statements for the year ended 31 December 2015.
2.9.9
Provision for climate risk fund As per GBCSRD Circular No 04 (9 July 2015) issued by Bangladesh Bank, instructs Banks to maintain a climate fund of 10% of the CSR budget. To comply with this requirement the bank has kept provision in the financial statements for the year ended 31 December 2015.
2.10
Revenue recognition
2.10.1
Interest income (Conventional Banking) In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognised on accrual basis. Interest on unclassified loans and advances are calculated at the prescribed rates to be taken into income. Interest is ceased to be taken into income when such loans and advances are marked as classified as per criteria prescribed by the Bangladesh Bank. It is then kept in interest suspense account. Interest/Profit on classified advances/investment is accounted for on a cash receipt basis. As per Bangladesh Bank circular charging of interest shall be cased as soon as any loan becomes ‘Bad/Loss’. Existing version of Core Banking Software of the Bank accrues interest on loans & advances irrespective of their classfication which necessitated a separate entry for such accrued interest.
2.10.2 Profit on investment (Islamic Banking Branches) Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge / compensation on classified investments is transferred to profit suspense account instead of income account. 2.10.3 Investment income Interest income on investments is recognised on accrual basis. Capital gain on investments in shares is also included in investment income. Capital gain is recognised when it is realised. 2.10.4 Fees and commission income Fees and commission income arising on services provided by the Bank are recognised when those are realized. Commission charged to customers on letters of credit and letters of guarantee is credited to income at the time of transactions being recorded in the books of accounts. 2.10.5 Dividend income on shares Dividend income on shares is recognised during the period when right to receive is established. 2.10.6 Interest paid and other expenses (Conventional Banking Branches) In terms of the provisions of BAS-1 “Presentation of Financial Statements” interest and other expenses are recognised on accrual basis. 2.10.7
Profit paid on deposits (Islamic Banking Branches) Profit paid to mudaraba depositors is recognised on accrual basis as per provisional rate. However, the final profit is determined and to be paid to the depositors as per Annexure-F.
2.10.8 Dividend payments Interim dividend is recognised when they are paid to shareholders. Final dividend is recognized when it is approved by the shareholders. The proposed dividend for the year 2015 has not been recognized as a liability in the balance sheet in accordance with the BAS-10 “Events After the Reporting Period”. Dividend payable to the Bank’s shareholders is recognized as a liability and deducted from the shareholders’ equity in the period in which the shareholders’ right to receive payment is established. 2.11
Risk management Risk is inherent to the banking business and Bank adds shareholders’ value by converting opportunities into profit. The Bank evaluates its opportunities in terms of risk-reward relationship. The risks that are taking by the Bank are reasonable, controlled, within its financial resources and credit competence. In Prime Bank, risk is managed through a clear organizational structure, risk management and monitoring process that are closely aligned with the activities of the Bank’s risk management policy and process as well as in line with the guidelines provided by the country’s central bank, Bangladesh Bank. The Bank’s risk management policy and process is composed with all the structure, policies, process and strategies within the Bank so that it does not conflict with other risk management policies.
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Notes to the Financial Statements for the year ended 31 December 2015 The essential elements of an effective risk management framework are: 1. Clearly defined roles and responsibilities to avoid conflict of interest between business lines. 2. Developing a risk culture where everyone will understand the impact of risk before taking any business decision. 3. Robust risk management and governance by the board for understanding the risks taken by the Bank for safety and protection of the assets.
2.12
Core risk management BRPD circulars no. 17 dated 07 October 2003 and BRPD circular no. 04 dated 05 March 2007 require banks to put in place an effective risk management system. The risk management system of the bank covers the following risk areas.
2.12.1
Credit risk It arises mainly from lending, trade finance, leasing and treasury businesses. This can be described as potential loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from unwillingness of the counter party or decline in his / her financial condition. Therefore, the Bank’s credit risk management activities have been designed to address all these issues. The Bank has segregated duties of the officers / executives involved in credit related activities. A separate Corporate Division has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with the customers, marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval, administration, monitoring and recovery functions have been segregated. For this purpose, three separate units have been formed within the credit division. These are (a) Credit Risk Management Unit (b) Credit Administration Unit and (c) Credit Monitoring and Recovery Unit. Credit Risk Management Unit is entrusted with the duties of maintaining asset quality, assessing risk in lending to a particular customer, sanctioning credit, formulating policy / strategy for lending operation, etc. Adequate provision has been made on classified loans / investments is shown in note-14a.3. A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facility, etc. The assessment process at Head Office starts at Corporate Division by the Relationship Manager / Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority. Credit approval authority has been delegated to the individual executives. Proposals beyond their delegation are approved / declined by the Executive Committee and / or the Management of the Bank. Concentration of credit risk is shown in note -7a. 4. In determining Single borrower / Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory polices. Loans are classified as per Bangladesh Bank’s guidelines. Concentration of single borrower / large loan limit is shown in note-7a.8.
2.12.2
Foreign Exchange Risk Foreign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates. The risk is that adverse fluctuations in exchange rates may result in a loss in earnings. As per the guidelines of Bangladesh Bank, Prime Bank Limited has developed a detailed Foreign Exchange Risk Management policies to minimize different types of risks associated with foreign exchange transactions. The Bank has also developed different strategies to handle foreign exchange risk by setting different types of limits and risk parameters to measure and monitor foreign exchange risk exposure of the Bank. The foreign exchange desk of treasury division is involved in foreign exchange dealing activities with different counterparts; the treasury back office is engaged in transfer of funds and passing of the transaction entries in the books of accounts, and the mid office is responsible for verification of the deals. All foreign exchange transactions are revalued at market rate as per the directive of Bangladesh Bank. All Nostro Accounts are reconciled on a monthly basis and outstanding entries beyond 30 days are reviewed by the management for its settlement.
2.12.3
Asset Liability Management Banks are exposed to the several risks such as Liquidity Risk, Interest Rate Risk, Foreign Exchange Risk, Credit Risk and Operational Risk etc. Monitoring and controlling of these risks is vital to the survival of a financial institution. Asset-Liability Management is a tool to oversee whether different balance sheet risks are properly identified, appropriate policies and procedures are well established to control and limit these risks. Asset-Liability Committee (ALCO) reviews country’s overall economic position, the Bank’s liquidity position, key performance ratios, interest rate risk, deposit and advance growth, cost of deposit & yield on advances, deposit & lending pricing strategy and different forecasted balance sheet risks of the Bank.
2.12.4
Money Laundering Risk Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. If money laundering is done successfully, it allows the criminals to maintain control over their proceeds and ultimately to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions of the drug trafficker, the terrorist, the organized criminal, the insider dealer, the tax evader as well as the many others who need to avoid the attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.
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Notes to the Financial Statements for the year ended 31 December 2015 Prime Bank Ltd (PBL) has implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably designed to comply with applicable laws and regulations. It is the policy of PBL to take all reasonable and appropriate steps to prevent persons engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or terrorist operations, from utilizing PBL products and services. PBL makes every effort to remain in full compliance with all applicable AML and CFT laws, rules and standards in the jurisdictions in which it does business. In order to facilitate compliance with AML and CFT requirements, PBL has appointed one of its Senior Executives as the CAMLCO (Chief Anti-Money Laundering Compliance Officer) and a team of employees with experience on AML and CFT requirements under law, as well as money laundering detection and prevention, to oversee PBL AML and CFT program. PBL has developed and implemented written AML and CFT policies, procedures, internal controls and systems, which include (but are not limited) a customer identification program and procedures; procedures to collect and refresh, as appropriate, customer due diligence information; processes to assess risk; processes and systems to monitor customer transactions and activity; processes and systems to identify and report suspicious activity; and, processes to keep required records. PBL educates its all employees on AML and CFT requirements and activities and also subjects its AML and CFT program to regular independent testing. PBL cooperates fully with law enforcement and regulatory investigations and inquiries in identifying the criminals involve in Money Laundering and Terrorist Activities/Financing. 2.12.5
Internal Control & Compliance Risk Internal control is fundamental to the successful operation and day-to-day running of a business and it assists the bank in achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and management processes, covering the bank’s entire range of activities and operations, and not just those directly related to financial operations and reporting. Its scope is not confined to those aspects of a business that could broadly be defined as compliance matters, but extends also to the performance aspects of a business. Prime Bank Ltd has established a System of Internal Control, which is designed to manage all the risks of failure to a reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable assurance of effective & efficient operations covering all controls including financial & operational controls, reliability of the financial information, compliance with applicable laws & regulations, adherence to management policies, safeguarding of Bank’s Assets, prevention & detection of fraud & errors, and accuracy & completeness of the accounting records. The Board of Directors of Prime Bank Ltd regularly reviews the effectiveness of internal control process through its Audit Committee and Executive Committee and the Audit Committee plays an effective role amongst the Board of Directors, Management, Shareholders, Depositors and develops an efficient, powerful and a safe Banking System. The committee also performs a very important role for publishing Bank’s financial statements, developing an appropriate internal control system and maintains an effective communication with internal and external Auditors. It significantly contributes in controlling and monitoring various risks factors that arise from the business activities of the Bank. Board Audit Committee reviews the actions taken on internal control issues identified in the reports prepared by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities.
2.12.6
Information and communication technology The rapid development of information and communication technologies (ICTs) has effectively facilitated in reorganizing business processes and streamlining the provision of its products and services in today’s dynamic business environment. Such adoption helps the bank to develop and maintain competitive advantage for ensuring bank’s profitability and survivability in the market place. The competitive advantage often brings bank numerous benefits including fast business transactions, increasing automation of business processes, improved customer service, and provision of effective decision support in a timely manner. However, the adoption of ICT applications has also brought organizations risks related to ICT such as strategic risk, financial risk, operational risk and technological risk. Risk management plays a critical role in protecting the bank’s information assets. An effective risk management process is an important component of a successful IT security program. ICT risk management is referred to as the essential process to aid enterprise achieving “the new business changes, future investment in information technology system, an increasing ICT threats and an increasing dependence on delivering information in system”. In order to minimize and control these risks successfully, The Bank has developed and implemented ICT risk management policies and strategies, strengthened ICT security infrastructure, acquired centralized real time security monitoring system, implemented centralized hardware system with high availability facility and implemented Disaster Recover Site (DRS), developed Business Continuity Plan (BCP) and human resource backup plan with segregation of duties for different ICT tasks.
2.12.7
Liquidity risk The object of liquidity risk management is to ensure that all foreseeable funding commitments and deposit withdrawals can be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core retail and corporate deposits and institutional balance (note - 13a). Management of liquidity and funding is carried out by Treasury Department under approved policy guidelines. Treasury front office is supported by a very structured Mid office and Back office. The Liquidity management is monitored by Asset Liability Committee (ALCO) on a regular basis. A written contingency plan is in place to manage extreme situation.
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Notes to the Financial Statements for the year ended 31 December 2015 2.12.8
Market risk The exposure of market risk of the Bank is restricted to foreign exchange risk, interest rate risk and equity risk. Foreign exchange risk Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments and other remittance requirements. No foreign exchange dealing on Bankâ&#x20AC;&#x2122;s account was conducted during the year. Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-toMarket rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly basis and outstanding entry beyond 30 days is reviewed by the management for its settlement. The position maintained by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank. Interest rate risk Interest rate risk may arise either from trading portfolio or non-trading portfolio. The trading portfolio of the Bank consists of Government treasury bills of 28 days maturity. The short-term movement in interest rate is negligible or nil. Interest rate risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset Liability Committee (ALCO) monitors the interest rate movement on a regular basis. Equity risk Equity risk arises from movement in market value of equities held. The risks are monitored by Investment Committee under a well designed policy framework. The market value of equities held was, however, lower than the cost price at the balance sheet date (Annexure-B).
2.12.9
Reputation risk arising from money laundering incidences Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head Office and Compliance Officers at branches, who independently review the transactions of the accounts to verify suspicious transactions. Manuals for prevention of money laundering have been established and transaction profile has been introduced. Training is continuously given to all category of Officers and Executives for developing awareness and skill for identifying suspicious activities / transactions.
2.12.10 Operational risk Operational risk may arise from error and fraud due to lack of internal control and compliance. Management through Internal Control and Compliance Division controls operational procedure of the Bank. Internal Control and Compliance Division undertakes periodical and special audit of the branches and divisions at the Head Office for review of the operation and compliance of statutory requirements. The Audit Committee of the Board subsequently reviews the reports of the Internal Control and Compliance Division. 2.12.11 Audit Committee Disclosures The Audit Committee of the Board was duly formed by the Board of Directors of the Bank in accordance with the BRPD Circular no. 11 dated October 27, 2013 of Bangladesh Bank. Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 07, 2012 on Corporate Governance, the current Committee is constituted with the following 5 (Five) members of the Board and it does comply with the BRPD Circular no. 11, dated October 27, 2013. Sl No. i) ii) iii) iv) v)
Name Mr. Shamsuddin Ahmad, Ph.D. Mr. Md. Nader Khan Mr. Khandker Mohammad Khaled Dr. G M Khurshid Alam Mr. M Farhad Hussain FCA
Status with Bank Independent Director Director Director Independent Director Independent Director
Status with Committee Chairman Member Member Member Member
During the year 2015, the Audit Committee of the Board conducted 9 (Nine) meetings in which the important issues were discussed / reviewed are presented in note no. 48. 2.12.12 Risk Management Committee Disclosures The Board of Directors constituted with the following 5 (Five) members Risk Management Committee of the Board, the third Committee of the Board besides the Executive Committee and the Audit Committee in accordance with Bank Company (Amendment) Act 2013 and it does comply with the BRPD Circular no. 11, dated October 27, 2013. Sl No. i) ii) iii) iv) v)
274
Name Mrs. Nasim Anwar Hossain Mr. Khandker Mohammad Khaled Mr. Shamsuddin Ahmad, Ph.D. Dr. G M Khurshid Alam Mr. M Farhad Hussain FCA
Status with Bank Director Director Director Director Director
Status with Committee Chairman Member Member Member Member
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 The Risk Management Committee of the Board has been formed after the Central Bank’s instruction issued in October 27, 2013. The Committee conducted 5 (Five) meeting during the year where the following important issues were discussed / reviewed: i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) xvi) xvii) 2.13
Review the internal limit of sector and area wise exposure of the Bank; Review the internal limit against off-balance sheet exposure; Centralization process of the Bank; Compliance of core risk inspection by Bangladesh Bank; Strengthening and updating risk management system of the Bank; Review the internal capital adequacy assessment process; Maximization of collateral securities on account of top borrowers to reduce probable impact on CAR due to instance of default; Focus on rewarding business like Fuel, Energy and Fertilizer etc.. Imposing cap for commodity financing; Review the business continuity plan and disaster recovery; Review the quarterly Risk Management paper and Stress Testing report; Comprehensive Risk rating provided by Bangladesh Bank; Formation of Basel Unit; Arrangement of regular training and workshop for head office and branch officials to create awareness; Review the revised green banking policy, green stategic plan and green office guide; Monitoring of large loans and work order financing; Stock monitoring through routine and surprise physical inspection of the premises of the borrowers.
Earnings per share Basic earnings per share Basic earnings per share has been calculated in accordance with BAS 33 “Earnings per Share” which has been shown on the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share Diluted earnings per share is not required to be calculated for the year as there was no scope for dilution during the year under review.
2.14
Events after the reporting period Where necessary, all the material events after the reporting period have been considered and appropriate adjustment / disclosures have been made in the financial statements.
2.15
Memorandum items Memorandum items are maintained to have control over all items of importance and for such transactions where the Bank has only a business responsibility and no legal commitment. Bills for collection, savings certificates, wage earners bonds etc. fall under the memorandum items. However, Bills for Collection is shown under contingent liabilities as per Bangladesh Bank’s format of reporting.
2.16
Related party transaction Related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether a price is charged. Details of related parties transaction are given in note-49.
2.17
Information about business and geographical segments Segmental information is presented in respect of the Group’s business and of Prime Bank Limited. Business segments Business segments report consists of products and services whose risks and returns are different from those of other business segments. These segments comprise Conventional Banking including Off-shore Banking Units, Islamic Banking, Prime Bank Investment Limited and Prime Bank Securities Limited. Business segments report are shown in Annexure-H. Geographical segments Geographical segments report consists of products and services within a particular economic environment where risks and returns are different from those of other economic environments. These segments comprise of Prime Bank Limited, Offshore Banking Units, Prime Bank Investment limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte.) Ltd. Singapore, PBL Exchange (UK) Ltd. and PBL Finance (Hong Kong) Limited. Geographical segments report are shown in Annexure-H. Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the management. Income, expenses, assets and liabilities are specifically identified with individual segments. Based on such allocation, segmental balance sheet as on 31 December 2015 and segmental profit and loss account for the year ended 31 December 2015 have been prepared.
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Notes to the Financial Statements for the year ended 31 December 2015 2.18
Compliance report on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). While preparing the financial statements, Prime Bank applied all the applicable BAS and BFRS as adopted by ICAB. Details are given below: Name of the BAS Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the reporting period Construction Contracts Income Taxes Property, Plant and Equipment Leases Revenue Employee Benefits Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Separate Financial Statements Interests in Joint Ventures Financial Instruments: Presentation Earnings per share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Financial Instruments: Recognition and Measurement Investment Property Agriculture Name of the BFRS First time adoption of Bangladesh Financial Reporting Standards Share Based Payment Business Combinations Insurance Contract Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Financial Instruments: Disclosure Operating Segments Consolidated Financial Statements Joint Arrangement Disclosure of Interest in other entities Fair Value Masurement
BAS no 1 2 7 8 10 11 12 16 17 18 19 20 21 23 24 26 27 31 32 33 34 36 37 38 39 40 41
Status Applied * Applied Applied Applied Applied N/A Applied Applied Applied Applied Applied N/A Applied Applied Applied N/A ** Applied N/A Applied * Applied Applied *** Applied Applied Applied Applied * N/A N/A
BFRS no 1 2 3 4 5 6 7 8 10 11 12 13
Status N/A N/A N/A N/A N/A N/A Applied Applied Applied N/A N/A Applied
N/A=Not Applicable * In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are different to BAS/BFRS, some of the requirements specified in these BAS/BFRSs are not applied. Refer below (note-2.19) for such recognition and measurement differences that are most relevant and material to the Bank and the Group. ** This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the plan. Therefore, it is not applicable for the Bankâ&#x20AC;&#x2122;s annual report as it is the employer and not the retirement benefit plan itself. *** The objective of BAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the principles for recognition and measurement in complete or condensed financial statements for an interim period and hence it is not applicable for annual financial statements. However, the Bank being a listed entity in Dhaka and Chittagong Stock Exchanges regularly publishes Interim Financial Report complying with BAS 34.
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Notes to the Financial Statements for the year ended 31 December 2015 New and amended standards adopted by the Bank and the Group There are no new standards, amendments to standards and interpretations that are effective for the first time for the financial year ended 31 December 2015 that have a significant impact on the Group and the Bank. New and amended standards and interpretations not yet adopted by the Bank and the Group A number of new standards, amendments to standards and interpretations are effective for annual periods beginning from 1 January 2015 or later, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group and the Bank. Although International Accounting Standards Board (IASB) has issued a new standard (IFRS 9) along with related amendments to existing standards (IAS/BAS 32, 39) but none of these have been adopted and/or endorsed locally as BAS/BFRS and as such any possible impact could not be determined. 2.19
Departures from BAS/BFRS The consolidated financial statements of the Group and the financial statements of the Bank as at and for the year ended 31 December 2015 have been prepared under the historical cost convention except investments and in accordance with the “First Schedule” (section 38) of the Bank Companies Act 1991, as amended by Bangladesh Bank (the Central Bank of Bangladesh) through BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank Circulars, Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong Stock Exchange’s listing regulations. In case, any requirement of provisions and circulars issued by Bangladesh Bank differs with those of other regulatory authorities, the provisions and circulars issued by Bangladesh Bank shall prevail. Material departures from the requirements of BFRS are as follows: i) Investment in shares and Securities BFRS: As per requirements of BAS 39, investment in shares and securities generally falls either under “at fair value through profit and loss account” or under “available for sale” where any change in the fair value (as measured in accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise investments are recognized at costs. ii) Revaluation gain/loss on Government securities BFRS: As per requirement of BAS 39, where securities T-bills and T-bonds fall under the category of “held for trading”, any change in the fair value (as measured in accordance with BFRS 13) of held for trading assets is recognized through profit and loss account. T-bills and T-Bonds designated as “held to maturity” are measured at amortised cost method and interest income is recognised through the profit and loss account. Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortisation of discount are recognised in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortised at the year end and gains or losses on amortisation are recognised in other reserve as a part of equity. iii) Provision on loans and advances BFRS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012 and BRPD circular no. 05 dated 29 May 2013 a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on time past due. Again as per BRPD circular no. 10 dated 18 September 2007 and BRPD circular no. 14 dated 23 September 2012, a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39. iv) Recognition of interest in suspense BFRS: Loans and advances to customers are generally classified as ‘loans and receivables’ as per BAS 39 and interest income is recognised through effective interest rate method over the term of the loan. Once a loan is impaired, interest income is recognised in profit and loss account on the same basis based on revised carrying amount. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet. v) Other comprehensive income BFRS: As per BAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of Other Comprehensive Income are to be included in a Single Other Comprehensive Income (OCI) Statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to include in a Single Comprehensive Income (OCI) Statement. As such the company does not prepare the other comprehensive income statement. However elements of OCI, if any, are shown in the statements of changes in equity.
277
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Notes to the Financial Statements for the year ended 31 December 2015 vi) Financial instruments – presentation and disclosure In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 cannot be made in the financial statements. vii) Repo and Reverse Repo transactions BFRS: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement istreated as a loan and the underlying asset continues to be recognized in the entity’s financial statements. The difference between selling price and repurchase price will be treated as interest expense. Same rule applies to the opposite side of the transaction (reverse repo). Bangladesh Bank: As per DOS Circular letter no. 6 dated 15 July 2010 and subsequent clarification in DOS circular no. 2 dated 23 January 2013, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a normal sales transactions and the financial assets are derecognized in the seller’s book and recognized in the buyer’s book. Howevwer, as per DMD circular letter no. 7 dated 29 July 2012, non primary dealer banks are eligible to participate in the Assured Liquidity Support (ALS) programme, whereby such banks may enter collaterallised repo arrangements with Bangladesh Bank. Here the selling bank accounts for the arrangement as a loan, thereby continuing to recognise the asset. viii) Financial guarantees BFRS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value (as measured in accordance with BFRS 13), and the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortized amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities. Bangladesh Bank: As per BRPD 14, financial guarantees such as letter of credit, letter of guarantee will be treated as OffBalance Sheet items. No liability is recognized for the guarantee except the cash margin. ix) Cash and cash equivalent BFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7. Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, Treasury bills, Bangladesh Bank bills and Prize bond are not shown as cash and cash equivalent. Money at call and on short notice presented on the face of the balance sheet, and Treasury bills, Prize bonds are shown in investments. x) Non-banking asset BFRS: No indication of Non-banking asset is found in any BFRS. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named Non-banking asset. xi) Cash flow statement BFRS: Cash flow statement can be prepared either in direct method or in indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flows is the mixture of direct and indirect method. xii) Balance with Bangladesh Bank: (CRR) BFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per BAS 7. Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents. xiii) Presentation of intangible asset BFRS: An intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38. Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14. xiv) Off-balance sheet items BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement of disclosure of offbalance sheet items. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of balance sheet. xv) Disclosure of appropriation of profit BFRS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face of profit and loss account. xvi) Loans and advance net of provision BFRS: Loans and advances should be presented net of provisions.
278
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances. xvii) Uniform accounting policy In several cases Bangladesh Bank and Bangladesh Securities and Exchange Commission guidelines categorize, recognize, measure and present financial instruments differently from those prescribed in BFRS 10. As such some disclosure, presentation and measurement requirements of BFRS 10 cannot be made in the financial statements. 2.20
The Bank’s compliance with related pronouncements by Bangladesh Bank: i) Internal Control The objective of internal control is to ensure that management has reasonable assurance that (i) operations are effective, efficient and aligned with strategy, (ii) financial reporting and management information is reliable, complete and timely accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical values including sustainability, and (iv) assets of the company are safeguarded and frauds & errors are prevented or detected. Prime Bank Limited has established an effective internal control system whose primary aim is to ensure the overall control of risks and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high level risk culture among the personnel of the Bank, establish efficient and qualified operating model of the Bank, ensure reliability of internal and external information including accounting and financial information, secure the Bank’s operations and assets, and comply with laws, regulatory requirements and internal policies. The Board of Directors of Prime Bank, through its Audit Committee, periodically reviews the effectiveness of Bank’s internal control system covering all the material controls, including financial, operational and compliance controls, risk management systems, the adequacy of resources, qualifications and experience of staff of the accounting and financial reporting function, training programs, budget, etc. Board Audit Committee reviews the actions taken on internal control issues identified by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities. ii) Internal Audit Internal Audit is the continuous and systematic process of examining and reporting on the activities of an organization undertaken by the specially assigned staff(s). Internal Auditor works as the Eyes & Ears of the management. It may therefore be used to bridge the gap between management & shop floor. It can assure the management that the Internal Controls are adequate and in operations, the policies and systems laid down are being adhered to and accounting records provided by the lower level are correct. Internal Audit Mechanism is used as an important element to ensure good governance of PBL. Internal Audit Activity of PBL is effective and it provides senior management with a number of important services. These include detecting and preventing fraud, testing internal control, and monitoring compliance with own policies & procedures, applicable rules & regulations, instructions/ guidelines of regulatory authority etc. During the period 2015, ICCD conducted inspection on many of the Branches/ Divisions of Head Office of the Bank and submitted reports presenting the findings of the audits/ inspections. Necessary control measures and corrective actions have been taken on the suggestions or observations made in these reports. The reports or key points of the Reports have also been discussed in the meetings of the Audit Committee of the Board and necessary steps have been taken according to the decision of the said Committee for correct functioning of Internal Controls & Compliance. iii) Fraud and Forgeries The increasing wave of fraud and forgery cases in the banking sector in recent time calls for concerted steps in identifying ways for reducing or preventing frauds and forgeries by analyzing the causes and effect of frauds and forgeries, and prescribing effective control strategies for salvaging frauds in the banking sector. Prime Bank does always pay due attention on antifraud internal controls for prevention of fraud and forgery. The Bank has already implemented some strategies like Financial Control Strategy, Personnel Control Strategy, Accounting Control Strategy, Credit Control Strategy, Cost Control Strategy, Administrative Control strategy, Process Control Strategy etc. in order to strengthening the control system further. Although it is not possible to eliminate all frauds because of the inherent limitations of Internal Control System, the Board of Directors and Management have taken all the measures to keep the operational risk in a very minimum level. Internal Control and Compliance Division (ICCD) assesses and evaluates the effectiveness of Bank’s anti-fraud internal control measures, recommends for further improvement in implementation of aforesaid strategies and reports to the Bangladesh Bank on effectiveness of controls at the end of each quarter following their prescribed format.
2.21
The financial statements were approved by the Board of Directors on 21 March 2016.
2.22
General a)
These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.
b)
The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided for in the books of the Bank.
c)
Figures of previous year have been rearranged whenever necessary to conform to current years presentation.
279
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 3
2014
Consolidated cash i Cash in hand Prime Bank Limited (note-3a.1)
2,391,184,957
Prime Bank Investment Limited
12,609
9,228
Prime Bank Securities Limited
25,000
25,000
Prime Exchange Co. Pte. Ltd., Singapore
2,340,059,101
56,419,021
24,958,132
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
2,447,641,587
2,365,051,461
ii Balance with Bangladesh Bank and its agent bank(s)
3a
Prime Bank Limited (note-3a.2)
15,069,879,177
15,194,723,820
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
15,069,879,177 17,517,520,764
15,194,723,820 17,559,775,281
2,344,391,158
2,284,671,278
Cash of the Bank
3a.1 Cash in hand In local currency In foreign currency
46,793,799
55,387,823
2,391,184,957
2,340,059,101
14,336,197,689
13,528,018,067
3a.2 Balance with Bangladesh Bank and its agent bank(s) In local currency In foreign currency Sonali Bank as agent of Bangladesh Bank (Local currency)
239,355,016
1,284,357,478
14,575,552,705
14,812,375,544
494,326,472
382,348,275
15,069,879,177
15,194,723,820
17,461,064,134
17,534,782,921
Reconciliation statements regarding Bangladesh Bank balance are given Annexure-A-1 3a.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Bank Companies Act, 1991 and MPD circular nos. 01 & 02, dated June 23, 2014 and December 10, 2013 & DOS circular no. 1 dated 19 January 2014. The Cash Reserve Requirement on the Bankâ&#x20AC;&#x2122;s time and demand liabilities at the rate of 6.5% has been calculated and maintained with Bangladesh Bank and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory Liquidity Ratio for Islamic banking, excluding CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below: a)
Cash Reserve Requirement Required reserve
13,236,417,440
13,100,234,670
Actual reserve maintained (note-3a.2)
14,336,197,689
13,528,018,067
1,099,780,249
427,783,397
Required reserve
25,422,733,180
25,077,954,010
Actual reserve maintained- (note-3a.5)
64,877,278,167
74,077,853,175
39,454,544,987
48,999,899,165
Total required reserve
38,659,150,620
38,178,188,680
Actual reserve held
79,213,475,856
87,605,871,241
40,554,325,236
49,427,682,561
Surplus / (deficit) b)
Statutory Liquidity Ratio
Surplus / (deficit)
Total surplus
280
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
3a.4 Maturity grouping of cash Payable on demand Up to 1 month
-
-
4,204,646,694
4,434,548,251
Over 1 month but not more than 3 months
-
-
Over 3 months but not more than 6 months
-
-
Over 6 months but not more than 1 year
-
-
Over 1 year but not more than 5 years Over 5 years
-
-
13,256,417,440
13,100,234,670
17,461,064,134
17,534,782,921
2,391,184,957
2,340,059,101
733,681,488
1,666,705,753
7,026,719,442
17,013,171,209
50,730,260,280
53,052,917,111
3,995,432,000
-
3a.5 Held for Statutory Liquidity Ratio Cash in hand (note -3a.1) Balance with Bangladesh Bank and its agent bank(s) (note-3a.2) Government securities (note-6a.ii) Government bonds (note-6a.ii) Bangladesh Bank bills (note-6a.ii) Debenture of HBFC (note-6a.ii)
4
-
5,000,000
64,877,278,167
74,077,853,175
112,219,948
258,877,340
Consolidated balance with other banks and financial institutions In Bangladesh Prime Bank Limited (note-4a.1) Prime Bank Investment Limited
8,927,395
32,854,585
22,078,183
14,949,084
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
143,225,526
306,681,009
10,552,055
34,213,790
132,673,471
272,467,219
Prime Bank Limited (note-4a.2)
1,845,464,037
1,253,809,238
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
-
42,420,563
19,892,087
27,004,332
Prime Bank Securities Limited
Less: Inter-company transaction
Outside Bangladesh
Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
4a
13,075,373
8,535,253
1,878,431,497
1,331,769,386
2,011,104,968
1,604,236,605
112,219,948
258,877,340
Balance with other banks and financial institutions of the Bank In Bangladesh (note-4a.1) Outside Bangladesh (note-4a.2)
1,845,464,037
1,253,809,238
1,957,683,985
1,512,686,578
281
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
4a.1 In Bangladesh Current account Agrani Bank Ltd., Principal Branch, Dhaka Agrani Bank Ltd., Purana Paltan Branch, Dhaka Agrani Bank Ltd., Bhairab Bazar, Kishoregonj Agrani Bank Ltd., Mirzapur Branch, Mirzapur Agrani Bank Ltd., Takerhat Branch AB Bank Ltd. Principal Branch, Dhaka The City Bank Ltd, Dhaka Dutch-Bangla Bank Ltd., Mirzapur Branch, Tangail Exim Bank Ltd., Motijheel Branch, Dhaka Islami Bank BD Ltd., Local Office, Dhaka Islami Bank BD Ltd., Jhikorgacha Janata Bank Ltd., Local Office, Dhaka Janata Bank Ltd., Ishwardi Branch Janata Bank Ltd., Corporate Branch, Bogra National Bank Ltd., Rangpur Branch Pubali Bank Ltd., Dhaka Stadium Branch, Dhaka Rupali Bank Ltd. ,Motijheel Branch, Dhaka Sonali Bank Ltd., Rangpur Branch Sonali Bank Ltd., Local Office, Dhaka Sonali Bank Ltd., Narayanganj Sonali Bank Ltd., Fakirapool Branch, Dhaka Sonali Bank Ltd., Faridpur Branch, Faridpur Sonali Bank Ltd., Narsingdi Branch Sonali Bank Ltd., Satkhira Standard Chartered Bank, Bangladesh United Commercial Bank Ltd., Principal Branch, Dhaka Off-shore Banking Units Uttara Bank Ltd., Local Office, Dhaka Less: Off-shore Banking Units
450,055 90,589 125,267 950 2,997,108 272,289 5,497,455 1,700,841 7,283,421 13,384,236 54,650 45,665 1,189,499 3,115,514 10,548,641 7,075,778 3,088,525 490,928 21,436,335 9,551,324 683,486 8,367,891 7,441,892 122,645,890 171,841 227,710,071 122,645,890 105,064,180
451,555 91,859 6,000,000 421,522 2,077 2,997,108 273,329 5,558,530 1,701,991 7,294,929 195 63,395,674 335,461 717 45,665 1,192,109 3,117,664 6,062,379 7,091,261 729,105 521,853 34,548,014 2,415,682 472,015 7,444,042 288,300,173 173,341 440,638,250 288,300,173 152,338,077
333,824
320,555
Special notice deposit accounts Agrani Bank Ltd., Principal Branch, Dhaka Agrani Bank Ltd., Takerhat Branch
-
-
ICB Islamic Bank Ltd., Principal Office, Motijheel, Dhaka
13,529
14,334
ICB Islamic Bank Ltd., Sylhet
16,786
17,016
Dutch-Bangla Bank Ltd., Local Office
798,759
467,809
Janata Bank Ltd., Local Office, Dhaka
5,797,626
5,532,288
2,000
4,856
National Bank Ltd., Narayanganj Branch, Dhaka Sonali Bank Ltd., Bhairab Bazar, Kishoregonj Social Islami Bank Ltd., Principal Branch, Dhaka
950
950
12,444
12,603
6,975,918
6,370,411
Savings accounts Al Arafah Islami Bank Ltd., Dhaka
69,882
64,622
Bank Al Falah Ltd., Dhaka
38,337
36,595
Social Islami Bank Ltd., Principal Branch, Dhaka
Fixed deposits
282
71,632
67,635
179,850
168,851
-
100,000,000
-
100,000,000
112,219,948
258,877,340
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
89,234,389
75,324,652
7,297,026
5,480,696
The Bank of Tokyo Mitsubishi Ltd., Japan
4,666,337
4,370,045
SMBC, Tokyo, Japan
2,865,364
3,265,829
4a.2 Outside Bangladesh (NOSTRO Accounts) Current account AB Bank Ltd., Mumbai, India Bank of Bhutan Phuentsholing, Bhutan
Citibank N.A., Mumbai, India Citibank N.A., London , UK
67,539
67,065
15,647,498
36,487,520
Citibank N.A., New York, USA
780,868,501
87,228,607
Commerz Bank AG, Frankfurt , Germany (EURO)
120,894,608
183,578,934
Commerz Bank AG, Frankfurt , Germany (US$)
20,201,726
5,222,540
Commonwealth Bank of Australia, Australia
3,858,040
2,826,530
36,982,287
22,210,205
Habib American Bank, New York, USA
15,722,503
15,683,490
Habib Metropolitan Bank Ltd, Karachi
38,016,862
32,423,765
Deutsche Bank Trust Company Americas
Habib Bank Ltd, Karachi
12,720,108
15,622,827
HDFC Bank Limited, Kolkata, India
77,658,426
84,540,590
HSBC Bank USA, New York, USA
61,722,441
250,802,434
HANA Bank, Seoul ICICI Bank Ltd, Mumbai, India
329,309
672,653
91,506,287
29,956,770
Intesa Sanpaolo SPA, Milano, Italy
6,539,177
546,234
J. P. Morgan Chase Bank, New York
15,914,173
32,633,551
Korea Exchange Bank Seoul Mashreq Bank PSC, New York, USA
3,977,972
6,194,466
37,524,246
25,668,495
Mashreq Bank PSC, Mumbai, India
12,857,337
33,718,293
National Westminister Bank, London, UK
48,018,672
24,303,332
The National Commercial Bank, Jeddah
5,082,055
2,240,494
Nepal Bangladesh Bank Ltd., Kathmandu, Nepal
6,061,420
2,265,228
People's Bank, Colombo, Sri Lanka
10,887,653
20,835,713
Skandinaviska Enskilda Banken, Sweden Sonali Bank, Kolkata, India
2,862,492
292,499
30,757,984
25,592,031
Standard Chartered Bank, Kolkata, India
102,724,015
72,954,547
Standard Chartered Bank, New York, USA
40,331,055
43,058,439
Standard Chartered Bank, Singapore
59,973,958
23,520,569
Standard Chartered Bank, Frankfurt, Germany
8,702,076
14,638,739
The Bank of Nova Scotia, Toronto, Canada
3,923,583
5,536,254
Unicredito Italiano SPA, Milano, Italy
4,863,651
6,669,508
Wells Fargo Bank N. A. Newyork
55,792,406
56,056,726
Zuercher Kantonal Bank, Zurich
8,410,862
1,318,969
1,845,464,037
1,253,809,238
1,957,667,798
1,412,671,381
(Annexure -A) 4a.3 Maturity grouping of balance with other banks and financial institutions Payable on demand Up to 1 month
16,186.53
15,197
Over 1 month but not more than 3 months
-
100,000,000
Over 3 months but not more than 6 months
-
-
Over 6 months but not more than 1 year
-
-
Over 1 year but not more than 5 years
-
-
Over 5 years
-
-
1,957,683,985
1,512,686,577
283
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 5 6
Money at call and short notice
2014
420,000,000
-
Consolidated investments Government 61,752,411,722
70,928,312,066
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
Prime Bank Limited (note-6a)
PBL Finance (Hong Kong) Limited
-
-
61,752,411,722
70,928,312,066
Others Prime Bank Limited (note-6a)
980,449,941
1,713,515,478
Prime Bank Investment Limited
1,146,778,917
1,102,855,608
Prime Bank Securities Limited
6a
751,626,134
751,628,861
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
2,878,854,992
3,567,999,947
64,631,266,714
74,496,312,013
Investments of the Bank i) Investment classified as per Bangladesh Bank Circular: Held for trading (HFT)
29,616,350,264
37,415,148,103
Held to maturity (HTM)
32,129,716,259
33,511,975,163
Other securities
986,795,141
1,714,704,278
62,732,861,663
72,641,827,544
ii) Investment classified as per nature: a) Government securities: 28 days treasury bills
-
-
91 days treasury bills
1,517,507,370
1,215,262,051
182 days treasury bills
3,656,193,364
6,396,833,170
364 days treasury bills
1,853,018,707
10,263,299,733
-
-
7,026,719,442
17,875,394,955
3,995,432,000
-
5 years treasury bills 30 days Bangladesh Bank bills Government bonds: Prize bonds Government bonds - (note-6a.2)
6,345,200
6,188,800
50,723,915,080
53,046,728,311
50,730,260,280
53,052,917,111
61,752,411,722
70,928,312,066
b) Other investments: -
5,000,000
Dhaka Bank Subordinated Bond interest rate @ 11.65% (note-6a.4)
120,001,253
171,430,361
National Bank Subordinated Bond interest rate @ 11.50% (note-6a.5)
103,250,489
129,063,111
58,832,107
83,073,414
Debentures of HBFC-bearing interest rate @ 5.5% (note-6a.3)
Lanka Bangla Finance Zero coupon bond interest rate @ 11.50% (note-6a.6) Orascom bond interest rate @ 13.50% (note-6a.7) Shares (note-6a.8) Reverse Repo
284
-
-
321,910,842
324,475,510
376,455,250
1,000,473,081
980,449,941
1,713,515,478
62,732,861,663
72,641,827,544
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
6a.1 Maturity grouping of investments On demand Up to 1 month
-
-
5,748,896,156
3,097,836,950
Over 1 month but not more than 3 months
4,697,489,673
17,270,237,935
Over 3 months but not more than 6 months
3,839,173,209
4,804,452,330
Over 6 months but not more than 1 year Over 1 year but not more than 5 years Over 5 years
3,157,088,123
4,311,998,542
17,710,799,882
14,760,391,175
27,579,414,620
28,396,910,612
62,732,861,663
72,641,827,544
-
-
2 years Bangladesh Government Islami Investment Bonds
900,000,000
850,000,000
5 years Bangladesh Government treasury bonds (8.26%-9.66%)
1,705,169,400
2,977,110,892
10 years Bangladesh Government treasury bonds(8.50%-11.80%)
18,518,818,202
18,668,730,600
6a.2 Government bonds Name of the bonds HTM 3 years T & T bonds
15 years Bangladesh Government treasury bonds(8.69%-14.00%)
6,304,873,171
6,308,387,732
20 years Bangladesh Government treasury bonds(9.10%-13.29%)
4,700,855,486
4,702,745,940
32,129,716,259
33,506,975,163
-
-
HFT 3 years T & T bonds 2 years Bangladesh Government treasury bonds (8.40%-8.75%)
778,878,184
3,047,335,016
5 years Bangladesh Government treasury bonds (8.25-11.78%)
8,507,340,307
3,813,506,882
10 years Bangladesh Government treasury bonds(8.50%-11.75%)
8,621,770,200
5,094,520,690
15 years Bangladesh Government treasury bonds(11.60%-12.30%)
686,210,130
3,721,355,996
-
3,863,034,563
18,594,198,822
19,539,753,148
50,723,915,080
53,046,728,311
20 years Bangladesh Government treasury bonds
6a.3 Debentures of Bangladesh House Building Finance Corporation - at redeemable value Principal Add: Accrued Interest Less: Redeemed up to 31 December 2015 Redeemable value
5,000,000
100,000,000
-
-
(5,000,000)
(95,000,000)
-
5,000,000
6a.4 Dhaka Bank Ltd. Subordinated Bond Opening balance Add: Interest accrued during the year
171,430,361
171,430,361
19,650,961
19,805,000
Less: Principal redemption during the year
(51,000,000)
-
Less: Interest received during the year
(20,080,069)
(19,805,000)
Redeemable value
120,001,253
171,430,361
129,063,111
161,328,889
6a.5 National Bank Ltd. Subordinated Bond Opening balance Add: Interest accrued during the year Less: Principal redemption during the year Less: Interest received during the year Redeemable value
14,711,822
18,134,222
(25,600,000)
(32,000,000)
(14,924,444)
(18,400,000)
103,250,489
129,063,111
285
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
6a.6 Lanka Bangla Finance Zerocoupon Bond Opening balance
83,073,414
-
-
82,599,807
9,090,692
473,607
(30,662,705)
-
Add: Addition/purchase during the year Add: Interest accrued during the year Less: Principal redemption during the year Less: Interest received during the year
(2,669,295)
-
Redeemable value
58,832,107
83,073,414
Principal
-
100,075,000
Add: Interest accrued during the year
-
5,025,000
Less: Principal redemption during the year
-
(100,000,000)
Less: Interest received during the year
-
(5,100,000)
Redeemable value
-
-
AB Bank Ltd.
47,632,736
47,632,736
Bank Asia Ltd.
24,429,908
24,429,908
The City Bank Ltd.
29,538,943
29,538,943
19,262,511
19,569,239
Dhaka Bank Ltd.
26,313,698
28,551,258
Eastern Bank Ltd.
37,410,456
37,410,456
6a.7 Orascom Bond
6a.8 Investment in shares Quoted
DESCO
Federal Insurance Company Bangladesh Ltd.
-
20,380
Jamuna Bank Ltd.
18,370,447
18,370,447
Mutual Trust Bank Ltd.
6,962,625
6,962,625
27,970,098
27,970,098
22,130,581
22,130,581
National Bank Ltd. One Bank Ltd. Uttara Bank Ltd.
37,009,980
37,009,980
297,031,983
299,596,650
15,694,430
15,694,430
Unquoted Central Depository Bangladesh Limited (CDBL) Investment in SWIFT MSF Details shown in Annexure -B
4,184,430
4,184,430
5,000,000
5,000,000
24,878,860
24,878,860
321,910,842
324,475,510
6a.9 (i) Disclosure regarding outstanding Repo Counterparty name
Agreement date
Reversal date
Amount -
Total
-
6a.9 (ii) Disclosure regarding outstanding Reverse Repo Counterparty name Commercial Bank of Ceylon Total
286
Agreement date
Reversal date
28.12.2015
04.01.2016
Amount 376,455,250 376,455,250
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
Maximum outstanding during the year
Daily average outstanding during the year
6a.10 Disclosure regarding Overall transaction of Repo and Reverse Repo Counterparty name
Minimum Outstanding during the year
Securities sold under Repo With Bangladesh Bank
214,540,000
794,155,000
10,215,836
With other Banks & FIS
499,608,500
3,756,869,610
14,399,165
From Bangladesh Bank
170,000,000
15,500,000,000
2,314,975,342
From other Banks & FIS
134,418,345
10,146,552,915
4,000,094,077
143,778,651,854
142,780,100,320
5,668,562,176
6,008,332,073
350,622,901
381,629,800
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
149,797,836,931
149,170,062,193
Securities purchased under Reverse Repo
7
Consolidated loans, advances and lease / Investments Prime Bank Limited (note-7a) Prime Bank Investment Limited Prime Bank Securities Limited
Less: Inter-company transactions
Consolidated bills purchased and discounted (note-8)
7a
4,616,626,241
3,344,650,634
145,181,210,690
145,825,411,559
9,689,917,573
6,893,824,341
154,871,128,263
152,719,235,900
24,776,655,379
36,737,396,813
Loans, advances and lease / investments of the Bank i) Loans, cash credits, overdrafts, etc. Inside Bangladesh Secured overdraft / Quard against TDR Cash credit / Murabaha
22,663,517,614
18,211,516,645
32,097,906,688
35,650,698,225
House building loans
3,301,459,546
3,603,454,341
Loans against trust receipt
5,303,651,218
7,415,940,130
Loans (General)
Payment against document
31,860,469
124,216,527
14,451,065,292
12,552,789,720
Lease finance / Izara (note - 7a.2)
5,350,151,030
4,881,673,072
Credit card
1,122,503,659
1,131,739,750
SME loan
804,349,365
759,121,216
Hire purchase
6,225,517,167
6,166,006,210
Retail loan
Other loans and advances Outside Bangladesh
27,650,014,427
15,545,547,671
143,778,651,854
142,780,100,320
-
-
143,778,651,854
142,780,100,320
3,828,649,204
3,058,777,247
ii) Bills purchased and discounted (note-8a) Payable Inside Bangladesh Inland bills purchased Payable Outside Bangladesh Foreign bills purchased and discounted
4,257,233,433
1,527,774,826
8,085,882,637
4,586,552,073
151,864,534,491
147,366,652,393
287
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
7a.1 Residual maturity grouping of loans, advances and lease / investments including bills purchased and discounted Repayable on demand Up to 1 month
-
-
37,813,617,177
30,925,806,865
Over 1 month but not more than 3 months
29,982,412,893
24,803,590,283
Over 3 months but not more than 1 year
41,061,785,234
52,909,983,172
Over 1 year but not more than 5 years
41,268,199,563
36,009,389,193
Over 5 years
1,738,519,624
2,717,882,879
151,864,534,491
147,366,652,393
551,655,846
336,799,649
7a.2 Lease finance / Izara Lease rental receivable within 1 year Lease rental receivable within 5 years Lease rental receivable after 5 years Total lease / Izara rental receivable Less: Unearned interest receivable Net lease / Izara finance
4,530,503,185
4,299,112,110
706,419,176
1,063,047,630
5,788,578,207
5,698,959,388
438,427,177
817,286,316
5,350,151,030
4,881,673,072
7a.3 Loans, advances and lease / investments under the following broad categories Loans
96,338,478,862
87,831,186,862
Cash credits
22,663,517,614
18,211,516,645
Overdrafts
24,776,655,379
36,737,396,813
143,778,651,854
142,780,100,320
8,085,882,637
4,586,552,073
151,864,534,491
147,366,652,393
a) Loans, advances and lease / investments to Directors of the Bank
-
-
b) Loans, advances and lease / investments to Chief Executive and other senior executives
1,755,263,620
1,854,730,519
29,132,063,544
31,618,811,445
5,853,612,737
7,522,730,824
3,301,459,546
3,603,454,341
iv) Retail loan
14,451,065,292
12,552,789,720
v) Small and medium enterprises
17,821,208,397
20,054,785,565
-
1,330,547,279
23,647,683
8,962,095
77,820,537,765
66,304,300,432
1,705,675,907
2,515,540,173
150,109,270,871
145,511,921,874
151,864,534,491
147,366,652,393
Bills purchased and discounted (note-8)
7a.4 Loans, advances and lease / investments on the basis of significant concentration including bills purchased and discounted.
c) Loans, advances and lease / investments to customer groups: i) Commercial lending ii) Export financing iii) House building loan
vi) Special program loan vii) Staff loan viii) Industrial loans / investments detail (note-7a.4 d) ix) Other loans and advances (SOD)
288
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
d) Details of Industrial loans / investments i) Agricultural industries
1,968,431,491
1,994,050,047
ii) Textile industries
5,297,102,298
6,070,725,733
iii) Food and allied industries
3,819,089,460
4,356,321,717
iv) Pharmaceutical industries
609,341,556
761,551,074
v) Leather, chemical, cosmetics, etc.
402,244,140
707,533,596
vi) Tobacco industries vii) Cement and ceramic industries viii) Service Industries ix) Transport and communication industries x) Other industries including bills purchase and discounted
880,165,799
748,929,479
3,269,884,057
3,624,965,032
20,742,040,185
15,611,991,380
3,139,819,037
5,139,792,413
37,692,419,741
27,288,439,961
77,820,537,765
66,304,300,432
7a.5 Loans, advances and leases / investments -geographical location-wise Inside Bangladesh Urban 105,444,098,064
108,095,013,290
Chittagong Division
31,692,710,788
23,268,148,497
Khulna Division
5,538,918,688
5,880,071,007
3,631,124,553
4,141,205,976
Dhaka Division
Rajshahi Division Barisal Division
121,355,000
111,647,769
Sylhet Division
1,178,059,595
1,551,503,515
Rangpur Division
841,639,011
836,669,471
148,447,905,699
143,884,259,526
Rural Dhaka Division
1,650,853,915
1,722,496,792
Chittagong Division
853,951,155
785,355,167
Khulna Division
78,224,955
64,859,403
Rajshahi Division
539,966,163
587,730,942
Sylhet Division
293,632,603
321,950,563
3,416,628,792
3,482,392,867
Outside Bangladesh
-
-
151,864,534,491
147,366,652,393
7a.6 Sector-wise loans, advances and lease / investments including bills purchased and discounted Public sector Co-operative sector Private sector
40,264,135
59,912,330
-
-
151,824,270,356
147,306,740,063
151,864,534,491
147,366,652,393
120,099,028,762
119,143,801,725
9,384,539,259
311,203,980
7a.7 Details of pledged collaterals with the Bank Collateral of movable / immovable assets Local banks and financial institutions guarantee Government guarantee
-
-
Foreign banks guarantee
-
15,864,992
1,325,515,112
2,681,663,312
Fixed deposit receipts
4,917,742,073
3,245,988,405
FDR of other banks
907,446,006
118,678,100
Government bonds
2,718,597
372
Personal guarantee
10,725,952,295
8,577,141,544
4,501,592,387
13,272,309,962
151,864,534,491
147,366,652,393
Export documents
Other securities
289
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
7a.8 Details of large loans, advances and lease / investments Number of clients with outstanding amount and classified loans / investments exceeding 10% of total capital of the Bank. Total capital of the Bank was Taka 29,282.83 million as at 31 December 2015 (Tk. 27,312.77 million in 2014). Number of clients
27
Amount of outstanding advances / investments Amount of classified advances / investments Measures taken for recovery
Name of clients
Outstanding (Tk. in million) Funded
Non-funded
61,404,100,000
61,529,337
202,696,000
Negotiation under in Process
Negotiation under in Process
Total
Total
(Tk. in million)
(Tk. in million)
Abdul Monem Group
103.40
1,614.10
1,717.50
-
Annata Apparel Group
356.40
1,438.90
1,795.30
2,057.20
Abul Khair Group
3,549.20
726.90
4,276.10
1,934.90
BSRM Group
2,245.00
357.80
2,602.80
-
Bangladesh Rural Advancement Committee
3,920.40
2,334.20
6,254.60
3,225.10
-
-
-
978.20
2.40
747.30
749.70
-
Bulk Trade Group BSA Group City Group
665.80
1,993.10
2,658.90
2,064.80
Confidence Group
893.40
1,622.00
2,515.40
1,991.90
121.10
282.90
404.00
459.80
Energypac Group Hameem Group Kabir Group
-
-
-
1,066.90
2,045.40
892.00
2,937.40
3,452.40
KDS Group
-
-
-
1,357.10
MAX Group
644.70
1,115.30
1,760.00
2,330.60
4.10
3,338.20
3,342.30
5,949.00
Mir Group
877.30
306.50
1,183.80
1,358.40
Molla Group
660.40
348.70
1,009.10
1,251.90
Nasir Group
1,642.40
235.80
1,878.20
2,449.10
Noman Group
2,073.90
292.10
2,366.00
2,579.40
2,774.10
-
2,774.10
2,973.60
Pran-RFL Group
2,169.80
780.90
2,950.70
-
Project Builders Ltd.
2,358.70
713.10
3,071.80
3,375.10
Pakiza Group
1,573.60
148.90
1,722.50
1,864.60
RAK Group
1,902.60
499.50
2,402.10
2,412.60
-
-
-
1,787.90
Meghna Group
Prime Bank Investment Ltd
Saad Musa Group Square Group
290
25
61,362,500,000
96.90
793.50
890.40
1,245.20
Standard Group
350.90
1,030.40
1,381.30
2,662.60
Summit Group
400.50
962.40
1,362.90
7,614.90
TK Group
749.50
2,648.10
3,397.60
2,960.90
Toma Group
807.20
2,290.50
3,097.70
-
Uttara Group
-
860.30
860.30
-
32,989.10
28,373.40
61,362.50
61,404.10
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
7a.9 Large loan restructuring i) The loan (General) liabilities for Taka 1,744,564,781.00 against Jamuna Denims Ltd., has been restructured (vide Bangladesh Banks approval dated September 02, 2015) for a period of 12 years (including 12 months moratorium) as per Bangladesh Bank BRPD Circular no. 04 dated January 29, 2015 on “Large Loan Restructuring”. ii) The loan (General) liabilities for Taka 621,663,487.00 against S.A.Oil Refinery Limited and Samannaz Super Oil Limited, has been restructured (vide Bangladesh Banks approval dated September 27, 2015) for a period of 6 years (including 12 months moratorium) as per Bangladesh Bank BRPD Circular no. 04 dated January 29, 2015 on “Large Loan Restructuring”. 7a.10 Particulars of loans, advances and lease / investments i) Loans / investments considered good in respect of which the Bank is fully secured
106,312,038,913
138,441,662,321
ii) Loans / investments considered good against which the Bank holds no security other than the debtors’ personal guarantee
10,156,248,759
2,697,014,628
iii) Loans / investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors
35,396,246,819
6,227,975,444
iv) Loans / investments adversely classified; provision not maintained there against
-
-
151,864,534,491
147,366,652,393
v) Loans / investments due by directors or officers of the banking company or any of them either separately or jointly with any other persons (note-7a.4b+7a.4c.vii)
1,778,911,303
1,863,692,614
vi) Loans / investments due from companies or firms in which the directors of the Bank have interest as directors, partners or managing agents or in case of private companies, as members
-
-
vii) Maximum total amount of advances / investments, including temporary advances made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person.
1,778,911,303
1,863,692,614
viii) Maximum total amount of advances / investments, including temporary advances / investments granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in the case of private companies, as members
-
-
-
-
a) Classified loans and advances / investments on which interest has not been charged (note-7a.11)
11,882,795,211
11,214,642,962
b) Provision on classified loans and advances / investments (for details see note-14a.3 & 14a.5)
5,749,296,814
4,586,296,479
c) Provision kept against loans / investments classified as bad debts
5,623,209,928
3,796,912,946
d) Interest credited to Interest Suspense Account (note-14a.6)
4,502,882,848
2,722,214,058
Opening Balance
7,642,692,134
5,519,757,834
Amount written off during the year
1,626,612,518
2,122,934,300
9,269,304,651
7,642,692,134
97,912,852
202,683,654
21,905,054,275
17,739,148,578
ix) Due from banking companies x) Classified loans and advances / investments
xi) Cumulative amount of written off loans / investments
Amount realised against loans / investments previously written off The amount of written off / classified loans / investments for which law suits have been filed (note-7a.14)
291
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
132,243,318,958
130,535,948,803
7,738,420,321
5,616,060,628
139,981,739,279
136,152,009,431
Sub-standard
489,829,571
1,852,281,599
Doubtful
342,861,718
1,268,158,259
11,050,103,923
8,094,203,104
7a.11 Classification of loans, advances and lease / investments Unclassified Standard including staff loan Special mention account (SMA)
Classified
Bad / Loss
11,882,795,211
11,214,642,962
151,864,534,491
147,366,652,393
2,029,309,713
1,739,048,000
7a.12 Particulars of required provision for loans, advances and lease / investments
Status
Base for provision
Rate (%)
139,981,739,279
*Various
General Provision Loans/investments (Including SMA) Interest receivable on loans/investments
598,942,439
1
5,989,424
6,414,540
2,035,299,138
1,745,462,540
*General provision is kept @ 1% on general loans and advances / investments and 0.25% on small enterprise financing, 2% on certain other types of lending and 5% on consumer financing. Status
Base for provision
Rate (%)
Specific provision Sub-standard Doubtful
236,254,923
20
47,250,985
210,778,032
145,224,351
50
72,612,176
560,031,717
5,623,209,928
100
5,623,209,928
3,796,912,946
5,743,073,088
4,567,722,695
Required provision for loans, advances and lease / investments
7,778,372,225
6,313,185,236
Total provision maintained (note - 14, 14a3 & 14a.5)
7,789,557,838
6,336,963,297
11,185,613
23,778,061
Bad / Loss
Excess / (short) provision at 31 December 2015
The Bank has maintained adequate provision in the financial statements for the year ended December 31, 2015 as per Bangladesh Bank guideline and the letter received from DBI-1, Bangladesh Bank (ref: DBI-1/90/2016/382 dated 13.03.2016). 7a.13 Particulars of required provision on Off-balance Sheet Exposures Base for provision Acceptances and endorsements
26,440,235,317
Letter of guarantee
63,736,691,078
637,366,911
614,081,496
Letter of credit
16,902,956,132
169,029,561
206,984,482
Bills for collection
8,607,304,495
86,073,045
-
Required provision on Off-balance Sheet Exposures
1,156,871,870
1,088,489,875
Total provision maintained (note - 14a.4)
1,156,890,000
1,088,490,000
18,130
125
Excess / (short) provision at 31 December 2015
292
Rate 1% 264,402,353
267,423,897
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
7a.14 Suits filed by the Bank (Branch wise details) Agrabad Branch Adamjee EPZ Branch Asad Gate Branch
764,916,339
197,535,420
2,511,129
1,286,331
17,009,312
17,477,895
Ashulia Branch
115,802,082
7,028,374
Banani Branch
29,871,525
29,808,789
Bangshal Branch
39,170,540
31,309,540
Banshkhali Branch
514,774
-
Barisal Branch
1,505,795
545,085
Barelekha Branch
1,380,839
-
Bashundhara Branch
7,449,079
7,290,747
418,291
-
Bhairab Bazar Branch
5,158,714
2,157,714
Biswanath Bracnh
563,880
319,700
Bogra Branch
228,597,931
5,105,996
Head Office, FMD & Card
Beani Bazar Branch
35,040,568
33,324,152
Chaumuhani Branch
10,510,317
13,248,317
Chaudagram Branch
5,302,005
-
Court Road Branch
4,474,906
507,721
Cox's Bazar Branch
14,067,036
1,719,330
1,782,297
1,782,297
2,529,018,219
2,529,054,520
930,000
1,150,000
18,555,126
187,000
Dinajpur Branch Elephant Road Branch Fatickchari Branch Faridpur Branch Feni Branch Foreign Exchange Branch Ganakbari Branch Garib-e-Newaz Branch Gulshan Branch
-
226,081
187,267,978
176,209,687
2,259,960
800,000
326,495
326,495
790,360,100
111,393,494
Hajigonj Branch
1,522,867
277,365
Halishahar Branch
1,863,455
1,075,000
Hathazari Branch IBB, Amberkhana Branch
7,255,230
9,439,029
24,859,041
19,633,392
IBB, Dilkusha Branch
947,923,221
26,740,776
IBB, Mirpur Branch
219,846,012
76,854,347
IBB, O.R. Nizam Road Branch
81,450,178
83,114,851
IBB, Pahartali Branch
35,464,189
15,499,110
Jamalpur Branch
1,218,950
-
Jatrabari Branch
14,609,073
1,918,013
Jessore Branch
917,104,426
912,410,130
2,293,964
2,293,964
Joypara Joydevpur Chowrasta Branch Jubilee Road Branch Kawran Bazar Branch Khatunganj Branch Khulna Branch Kishoreganj Kustia Branch Laldighi East Branch Madhabdi Branch Mirpur-1 Branch
352,452
-
2,384,726,000
1,773,411,000
102,899,915
102,899,915
922,430,047
795,319,047
2,357,000,102
2,363,516,165
4,508,606
84,755
-
4,257,716
1,273,805,621
1,021,859,621
27,986,508
2,937,003
9,682,240
12,028,175
293
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
Suits filed by the Bank (Branch wise details) Motijheel Branch
2,012,365
Mouchak Branch
46,484,175
153,102,393
Moulvibazar Branch, Dhaka
87,022,927
91,239,263
Mymensingh Branch Nabiganj Branch
189,123
-
8,482,743
8,482,743
35,027,955
-
3,725,502
-
Naogaon Branch
63,273,369
63,273,369
Narayanganj Branch
45,166,637
41,247,381
New Eskaton Branch
3,033,954
1,392,076
Oxygen More Branch
4,137,696
3,092,696
Pabna Branch
8,280,882
8,280,882
Pallabi Branch
5,128,092
4,448,836
Panthapath Branch
7,644,941
6,628,535
Natore Branch
Pragati Sarani Branch
13,139,852
13,139,851
Prabortak More Branch
3,226,638
3,258,862
Rajshahi Branch
308,387,319
314,953,333
Rangpur Branch
3,037,537
2,377,017
Retail Banking Division
37,311,713
8,392,261
Ring Road Branch
94,770,310
61,580,105
Sat Masjid Road Branch
51,744,782
51,744,782
Savar Branch
103,663,342
46,139,940
SBC Tower Branch
438,730,014
84,760,405
Shibpur Branch
588,636
-
10,298,059
5,465,265
Sirajdikhan Branch
2,514,000
-
SME Banking, Dhaka
51,296,562
57,202,183
Simrail Branch
Sremangal Branch
40,011,512
40,011,512
Sylhet Branch
4,352,508
25,395,848
58,262,095
32,078,626
Subidbazar Branch, Sylhet Tangail Branch
857,583
857,583
Tajpur Branch
3,010,347
2,128,421
Tongi Branch
3,096,365
2,432,493
1,889,223
1,841,723
61,280,653
41,767,517
Uposhahar Branch, Sylhet Uttara Branch Vatiari
1,794,404
-
21,905,054,275
17,739,148,578
Consolidated bills purchased and discounted 8,085,882,637
4,586,552,073
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
Prime Bank Limited (note-8a)
PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
294
6,165,056,254
2,012,365
Muradpur Branch
8
6,138,613,125
Mohakhali Branch
-
-
1,604,034,937
2,307,272,268
9,689,917,573
6,893,824,341
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 8a
2014
Bills purchased and discounted Payable in Bangladesh Payable outside Bangladesh
3,828,649,204 4,257,233,433 8,085,882,637
3,058,777,247 1,527,774,826 4,586,552,073
1,293,103,943 4,283,123,004 2,361,722,267 147,933,422 8,085,882,637
1,690,324,909 1,812,860,923 1,050,338,299 33,027,942 4,586,552,073
6,516,429,422
6,612,686,818
9,288,907
12,804,672
8a.1 Maturity grouping of bills purchased and discounted Payable within one month Over one month but less than three months Over three months but less than six months Six months or more 9
Consolidated fixed assets including premises, furniture and fixtures Prime Bank Limited (note-9a) Prime Bank Investment Limited Prime Bank Securities Limited
949,602
2,628,471
Prime Exchange Co. Pte. Ltd., Singapore
888,053
3,649,221
12,837,831
14,596,992
PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
9a
924,146
2,286,942
6,541,317,961
6,648,653,116
Fixed assets including premises, furniture and fixtures of the Bank Property, Plant & Equipment Land
3,706,444,788
3,702,444,788
Building
1,721,156,789
1,649,581,248
Furniture and fixtures
867,425,776
818,405,134
1,517,086,442
1,440,363,793
322,659,539
321,433,375
Office equipment and machinery Vehicles Library books
1,805,129
1,805,129
8,136,578,462
7,934,033,467
31,690,384
31,690,384
275,122,823
249,631,775
Leased property: Leased vehicles ATM Hardware & equipment Furniture & fixtures
44,477,715
43,528,537
319,600,538
293,160,312
Furniture and fixtures
2,991,998
2,991,998
Office equipment and machinery
1,742,930
1,742,930
1,410,371
1,410,371
Off-shore Banking Units
Vehicles
Less: Accumulated depreciation
Intangibles assets Software-core banking Software-ATM Cost of intangibles assets Less: Accumulated amortization Net book value at the end of the year (See annexure-C for detail)
6,145,299
6,145,299
8,494,014,684
8,265,029,462
2,048,531,792
1,756,221,695
6,445,482,891
6,508,807,767
252,656,062 43,212,614 295,868,676 224,922,145 70,946,531 6,516,429,422
244,443,757 43,212,614 287,656,371 183,777,321 103,879,050 6,612,686,818
The fixed assets recognised and measurements policy are described in note 2.2.4
295
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 10
Consolidated other assets Prime Bank Limited (note-10a) Less: Investment in Prime Bank Investment Limited (note-10a.5)
9,067,223,175 (2,999,999,940)
(712,500,000)
(712,500,000)
(37,500,000)
(37,500,000)
Less: Investment in PBL Exchange (UK) Ltd. (note-10a.5)
(56,352,624)
(56,352,624)
Less: Investment in Prime Exchange Co. Pte. Ltd., Singapore (note-10a.5)
(10,993,235)
(10,993,235)
Less: Investment in PBL Finance (Hong Kong) Limited (note-10a.5)
(34,365,722)
(34,365,722)
-
(2,191,547,381)
7,136,446,530
3,023,964,273
Less: Due from Investment in PBL Finance (Hong Kong) Limited (note-10a)
Prime Bank Investment Limited (investment in PBSL)
37,500,000
37,500,000
Prime Bank Investment Limited
24,918,544
23,532,489
Prime Bank Securities Limited
52,389,715
51,482,825
Prime Exchange Co. Pte. Ltd., Singapore
7,260,636
4,800,033
PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
-
-
3,041,790
3,495,959
125,110,685
120,811,305
7,261,557,214
3,144,775,578
29,548,731 986,757 3,814,211,521 7,789,741,770 129,879,902 300,000,000 20,000,000 200,000,000 600,000,000 400,000,000 400,000,000 200,000,000 550,000,000 500,000,000 785,003,000 350,000,000 150,000,000 150,000,000 14,718,908 598,942,439 1,151,010,115 259,576,914 8,068,884 18,996,235 138,049,975 171,932,724 3,201,558 79,984,853 93,925,437 18,907,779,722 7,919,621,671 10,988,158,051
24,722,480 2,305,667 3,814,211,521 4,351,658,435 132,911,416 2,191,547,381 17,926,965 641,454,035 1,381,562,486 274,085,598 8,202,887 18,533,017 384,161,142 136,623,524 10,395,688 115,268,108 46,222,676 13,551,793,026 4,484,569,851 9,067,223,175
Other assets of the Bank Stationery and stamps Exchange adjustment account Investment in subsidiary (note-10a.5) Off-shore Banking Units Due from Off-shore Banking Units PBL Finance (Hong Kong) Limited Commercial Bank of Ceylon National Bank of Pakistan Standard Bank Limited BRAC Bank Limited One Bank Limited AB Bank Limited IFIC Bank Limited Dhaka Bank Limited Southeast Bank Limited Eastern Bank Limited IDLC Finance Limited United Finance Delta Brac Housing Finance Corporation Prepaid expenses Interest / profit receivable on loan (note-10a.1) Interest receivable on Govt. securities Advance deposits and advance rent Prepaid expenses against house furnishing Branch adjustments account Suspense account (note -10a.2) Encashment of PSP / BSP ATM Credit card Sundry assets (note -10a.3) Less: Off-shore Banking Units
296
10,988,158,051 (2,999,999,940)
Less: PBIL investment in Prime Bank Securities Ltd.(below)
Less: Investment in Prime Bank Securities Limited (note-10a.5)
10a
2014
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
10a.1 Interest / profit receivable: Amount represents interest / profit receivable on loans, advances and lease / investments, interest on term placement, Government securities & foreign currency balance, etc. 10a.2 Suspense account includes TT / DD in transit, advance against Land/ Building, advance against new branch, advance against TA/ DA, printing and stationery, postage, suspense- others, clearing adjustment account etc. 10a.3 Sundry assets Protested Bills Less: Write off during the year Others
16,103,770
18,304,367
-
-
77,821,668
27,918,309
93,925,437
46,222,676
10a.4 Particulars of required provision for other assets Rate Purchase of credit card bills Protested bills Legal Expenses
71,000,000
100%
71,000,000
71,000,000
16,103,770
100%
16,103,770
18,304,367
2,819,595
50%
1,409,798
937,374
23,969,368
100%
23,969,368
4,268,575
Required provision for other assets
112,482,935
94,510,317
Total provision maintained (note - 14a.8)
112,506,648
94,538,648
23,713
28,331
2,999,999,940
2,999,999,940
712,500,000
712,500,000
Prime Exchange Co. Pte. Ltd., Singapore
10,993,235
10,993,235
PBL Exchange (UK) Ltd.
56,352,624
56,352,624
PBL Finance (Hong Kong) Limited
34,365,722
34,365,722
3,814,211,521
3,814,211,521
Others
Excess / (short) provision at 31 December 10a.5 Investment in subsidiaries Prime Bank Investment Limited Prime Bank Securities Limited
As per the provision of the Exchange Demutualization Act-2013 and in accordance with the Bangladesh Security Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE) alloted total 72,15,106 ordinary shares at a face value of Tk 10.00 each and Chittagong Stock Exchange Ltd. (CSE) alloted total 42,87,330 ordinary Shares at face value of Tk 10.00 each against the Membership of DSE and CSE respectively. Out of the above DSE transferred 2,886,042 shares and CSE transferred 1,714,932 shares directly to the credit of the Beneficiary Owner’s account of the company. The remaining shares were credited to blocked accounts as per provisions of the Exchange Demutualization Act, 2013. As there is no active market for shares of DSE and CSE, we have shown the value at original cost as investment. 11
Non-Banking Assets Name of Parties M/s Rima Flour Mills
Possession date 18.03.2014
124,438,400
124,438,400
M/s Ripon Motors
18.03.2014
51,902,240
51,902,240
M/s Megna Bangla Trade
28.04.2014
18,399,360
-
M/s Ampang Food Industries
28.04.2014
25,760,640
-
220,500,640
176,340,640
The Bank has been awarded ownership of the mortgage properties of the above mentioned parties according to the verdict of the Honorable Court in accordance with the section 33(7) of “Artharin Adalat-2003”. An amount of Tk.220,500,640/- is reported in the financial statements as Non -Banking assets. The value of Non-Banking Assets has been determined on the basis of valuation report of an Independent valuer.
297
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 12
Consolidated borrowings from other banks, financial institutions and agents Prime Bank Limited (note-12a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Less: Inter-company transactions
12a
2014
10,442,199,709 3,081,354,480 375,927,982 1,466,613,706 15,366,095,877 4,616,626,241 10,749,469,636
7,668,875,959 3,387,911,205 371,066,787 11,427,853,951 3,344,650,634 8,083,203,317
5,104,179,309 5,338,020,400 10,442,199,709
3,381,658,959 4,287,217,000 7,668,875,959
5,000,000,000 15,880,380 88,298,929 5,104,179,309
2,500,000,000 4,354,922 7,061,595 743,665,000 126,577,443 3,381,658,959
392,501,500 392,501,500 235,500,900 1,962,507,500 2,355,009,000 5,338,020,400
1,948,735,000 779,494,000 1,558,988,000 4,287,217,000
10,442,199,709 10,442,199,709
743,665,000 6,925,210,959 7,668,875,959
15,880,380 2,270,503,900 1,570,006,000 5,585,809,429 1,000,000,000 10,442,199,709
755,081,517 2,338,482,000 4,575,312,443 7,668,875,959
28,234,427,685 28,234,427,685 9,306,431 28,225,121,254
27,586,626,484 27,586,626,484 29,734,497 27,556,891,987
Borrowings from other banks, financial institutions and agents of the Bank In Bangladesh (note-12a.1) Outside Bangladesh (note-12a.2)
12a.1 In Bangladesh PBL bond Standard Chartered Bank, Bangladesh NPSB Settlement Repo of Treasury Bills Refinance against SME loan from Bangladesh Bank
12a.2 Outside Bangladesh Emirates NBD, Dubai, UAE Habib Bank, Dubai, UAE Habib Bank Ltd, Kabul, Afganistan FMO, Netherlands Commercial Bank of Qatar International Finance Corporation 12a.3 Security against borrowings from other banks, financial institutions and agents Secured (Treasury bills) Unsecured
12a.4 Maturity grouping of borrowings from other banks, financial institutions and agents Payable on demand Up to 1 month Over 1 month but within 3 months Over 3 months but within 1 year Over 1 year but within 5 years Over 5 years 13
Consolidated deposits and other accounts Current deposits and other accounts Prime Bank Limited (note-13a.1.c) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Less: Inter-company transactions
298
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
Bills payable 2,387,277,687
2,942,889,234
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
2,387,277,687
2,942,889,234
Prime Bank Limited (note-13a.1.c)
Savings bank / Mudaraba savings deposits 30,713,923,933
25,106,122,963
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
-
-
30,713,923,933
25,106,122,963
Prime Bank Limited (note-13a.1.c)
Term / Fixed deposits 133,489,471,451
149,202,091,888
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
Prime Bank Limited (note-13a.1.c)
PBL Finance (Hong Kong) Limited Less: Inter-company transactions
13a
-
-
133,489,471,451
149,202,091,888
1,245,624
4,479,293
133,488,225,827
149,197,612,596
194,814,548,701
204,803,516,780
Deposits and other accounts of the Bank Deposits from banks (note -13a.1.a) Deposits from customers (note-13a.1.b)
643,322,569
3,269,109,409
194,181,778,188
201,568,621,160
194,825,100,757
204,837,730,569
227,265,228
21,869,581
13a.1 a) Deposits from Banks Current deposits and other accounts Savings bank / Mudaraba savings deposits Special notice deposits Fixed deposits
63,787,472
27,249,372
352,269,869
719,990,457
-
2,500,000,000
643,322,569
3,269,109,409
b) Customer Deposits i) Current deposits and other accounts Current / Al-wadeeah current deposits Foreign currency deposits Security deposits Sundry deposits (note - 13a.2) Less: Off-shore Banking Units
12,849,210,601
11,346,101,277
3,878,870,738
4,060,096,974
8,913,666
9,104,416
11,392,813,343
12,437,754,408
28,129,808,348
27,853,057,075
122,645,890
288,300,173
28,007,162,457
27,564,756,903
299
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
ii) Bills payable Pay orders issued Pay slips issued
2,344,782,078
2,901,951,106
3,942,234
3,950,619
Demand draft payable
38,238,164
36,668,259
Foreign demand draft
313,592
313,592
T. T. payable
-
4,720
Bill Pay ATM
1,620
938
2,387,277,687
2,942,889,234
30,650,136,461
25,078,873,591
Fixed deposits / Mudaraba fixed deposits
73,131,243,276
85,381,031,529
Special notice deposits
12,152,345,704
13,293,344,787
iii) Savings bank / Mudaraba savings deposits iv) Term / Fixed deposits
Non resident Taka deposits Scheme deposits
1,128,171,888
902,232,979
46,725,440,713
46,405,492,137
133,137,201,582
145,982,101,432
194,181,778,188
201,568,621,160
194,825,100,757
204,837,730,568
c) Deposits and other accounts Current deposits and other accounts Deposits from banks (note -13a.1.a) Deposits from customers (note-13a.1.b.i)
227,265,228
21,869,581
28,007,162,457
27,564,756,903
28,234,427,685
27,586,626,484
Bills payable Deposits from banks (note -13a.1.a) Deposits from customers (note-13a.1.b.ii)
-
-
2,387,277,687
2,942,889,234
2,387,277,687
2,942,889,234
Savings bank / mudaraba savings deposits Deposits from banks (note -13a.1.a) Deposits from customers (note-13a.1.b.iii)
63,787,472
27,249,372
30,650,136,461
25,078,873,591
30,713,923,933
25,106,122,963
Term / Fixed deposits Deposits from banks (note -13a.1.a) Deposits from customers (note-13a.1.b.iv)
352,269,869
3,219,990,457
133,137,201,582
145,982,101,432
133,489,471,451
149,202,091,888
194,825,100,757
204,837,730,568
5,275,533,369
5,539,717,082
13a.2 Sundry deposits F.C. held against back to back L/C Sundry creditors Risk fund and service charges (CCS and lease finance) Sale proceeds of PSP / BSP Margin on letters of guarantee Margin on letters of credit
144,790,129
57,193,734
55,008,833
74,060,000
39,390,000
1,118,046,375
1,207,823,431
1,406,644,553
1,351,138,286
Margin on FDBP / IDBP, export bills, etc
94,589,168
79,490,309
Lease deposits
94,899,109
114,199,921
1,693,568,923
2,077,841,359
Interest / profit payable on deposits Withholding VAT/Tax /Excise duty payable to Government Authority Others
300
160,321,066
364,619,972
416,764,704
1,053,337,075
1,411,590,355
11,392,813,343
12,437,754,408
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
13a.3 Payable on demand and time deposits a) Demand deposits Current deposits
13,076,475,830
11,367,970,858
Savings deposits (9%)
2,764,253,154
2,259,551,067
Foreign currency deposits (Non interest bearing)
3,756,224,847
3,771,796,801
Security deposits Sundry deposits Bills payable
8,913,666
9,104,416
11,392,813,343
12,437,754,408
2,387,277,687
2,942,889,234
33,385,958,527
32,789,066,784
Savings deposits (91%)
27,949,670,779
22,846,571,896
Fixed deposits
73,131,243,276
87,881,031,529
Special notice deposits
12,504,615,573
14,013,335,244
Deposits under schemes
46,725,440,713
46,405,492,137
b) Time deposits
Non resident Taka deposits
1,128,171,888
902,232,979
161,439,142,230
172,048,663,784
194,825,100,757
204,837,730,569
13a.4 Sector-wise break-up of deposits and other accounts Government
1,690,489,720
2,022,588,387
643,322,569
3,269,109,409
Other public
4,691,418,255
8,344,684,894
Foreign currency
3,756,224,847
3,771,796,801
184,043,645,366
187,429,551,078
194,825,100,757
204,837,730,569
Deposit money banks
Private
13a.5 Unclaimed deposits and valuables Savings deposits SDR Pay order Sundry Deposit
17,131
-
165,000
35,780
400
710,933
236,041
17,343
418,572
764,057
227,265,228 95,491,760.11 320,565,580.72 643,322,569
21,869,581 92,048,512.62 2,500,000,000 655,191,315.54 3,269,109,409
37,721,191,402 42,949,226,207 35,358,682,329 51,255,925,724 24,509,056,266 418,572 191,794,500,500
30,818,341,049 52,232,350,268 29,123,967,930 48,594,967,734 37,855,340,887 764,057 198,625,731,926
13a.6 Maturity analysis of deposits a) Maturity analysis of deposits from Banks Payable on demand Up to 1 month Over 1 month but within 3 months Over 3 months but within 1 year Over 1 year but within 5 years Over 5 years but within 10 years Over 10 years b) Maturity analysis of customer deposits excluding bills payable Payable on demand Up to 1 month Over 1 month but within 3 months Over 3 months but within 1 year Over 1 year but within 5 years Over 5 years but within 10 years Over 10 years
301
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 c) Maturity analysis of bills payable Payable on demand Up to 1 month Over 1 month but within 3 months Over 3 months but within 1 year Over 1 year but within 5 years Over 5 years but within 10 years Over 10 years
14
Consolidated other liabilities Prime Bank Limited (note-14a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Less: Inter-company transactions
14a
2014
2,387,277,687 2,387,277,687 194,825,100,756
2,942,889,234 2,942,889,234 204,837,730,569
20,478,900,456 766,708,351 81,890,065 14,520,217 22,468,792 42,018,360 21,406,506,239 21,406,506,239
17,944,881,561 787,857,453 63,792,922 26,777,326 29,721,778 27,971,839 18,881,002,879 18,881,002,879
3,054,078,509 108,705,671 220,772,352 2,274,329,764 926,928,345 54,304,595 10,499,916 1,156,890,000 538,400,000 5,504,033 110,080,671 7,241,640,538 9,517,300 68,324,749 4,502,882,848 76,534,515 2,000,000 5,000,000 112,506,648 20,478,900,456
3,560,736,089 114,717,427 240,797,211 2,416,474,933 1,034,821,220 90,117,676 1,088,490,000 498,500,000 6,560,200 131,203,993 5,828,945,997 9,517,300 61,324,749 2,722,214,058 45,398,089 523,970 94,538,648 17,944,881,561
14,306,077,038 855,145,169 15,161,222,207
13,058,306,084 1,247,770,954 14,306,077,038
16,722,551,971 713,000,000 17,435,551,971 2,274,329,764
15,542,551,971 1,180,000,000 16,722,551,971 2,416,474,933
Other liabilities of the Bank Foreign currency held against EDF loan Expenditure and other payables Provision for bonus Provision for income tax (note - 14a.1) Deferred tax liability (note-14a.2) Unearned commission on bank guarantee Credit card Provision for off-balance sheet exposures (note-14a.4) Provision for Off-shore Banking Units (note-14a.5) Fund for employee welfare fund (EWF) Fund for Prime Bank Foundation (PBF) Provision for loans and advances / investments (note - 14a.3) Provision for Interest receivable on loans and advances / investments Provision for diminution in value of investments (note-39a) Interest suspense account (note - 14a.6) Provision for Impairement loss for investment in subsidiaries (note-39a) Provision for climate risk fund Provision of rebate for good borrower Other liabilities Other provision (note - 14a.7)
14a.1 Provision for income tax Advance tax Balance of advance income tax on 1 January Paid during the year Settlement of previous year's tax liability Provision Balance of provision on 1 January Provision of previous year Provision made during the year (note-40a) Net balance at 31 December * Corporate tax position of the bank is shown in annexure-D
302
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
14a.2 Deferred tax liability Deferred tax liability Balance as on 1 January Add: Provision for revaluation of land and building (note-18) Add: Addition / Adjustment during the year (note-40a) Balance as on 31 December
1,034,821,220 (7,892,875) (100,000,000) 926,928,345
1,319,653,470 7,967,750 (292,800,000) 1,034,821,220
4,165,296,479 (1,626,612,518) 97,912,852 41,605,793 (41,605,793) 2,690,000,000 5,326,596,814
3,342,047,125 (2,122,934,300) 202,683,654 9,522,472 100,000,000 (9,522,472) 2,643,500,000 4,165,296,479
1,663,649,518 (41,605,793) 293,000,000 1,915,043,724 7,241,640,538
1,659,171,990 (109,522,472) 114,000,000 1,663,649,518 5,828,945,997
1,088,490,000 68,400,000 1,156,890,000
1,090,000,000 (1,510,000) 1,088,490,000
421,000,000 1,700,000 422,700,000
391,000,000 30,000,000 421,000,000
77,500,000 38,200,000 115,700,000 538,400,000
31,500,000 46,000,000 77,500,000 498,500,000
2,722,214,058 5,661,548,663 (2,815,053,735) (1,065,826,138) 4,502,882,848
1,913,098,167 2,932,771,293 (1,248,876,000) (874,779,402) 2,722,214,058
94,538,648 17,970,000 (2,000) 112,506,648
88,338,648 6,200,000 94,538,648
An amount of Taka 7,892,875/- adjusted during the year due to changes of tax rate. 14a.3 Provision for loans, advances and lease / investments Movement in specific provision on classified loans / investments: Provision held as on 1 January Less: Fully provided debts written off during the year Add: Recoveries of amounts previously written off Add: Specific provision made during the year for other accounts Add: Transferred from General Provision Less: Provision no longer required Add: Net charge to profit and loss account (note-39a) Provision held as on 31 December Movement in general provision on unclassified loans / investments Provision held as on 1 January Add: Amount transferred to classified provision Add: General provision made during the year (note-39a) Provision held as on 31 December 14a.4 Provision for off-balance sheet exposures Provision held as on 1 January Add: Amount transferred from classified provision Add: Provision made during the year (note-39a) Provision held as on 31 December 14a.5 Provision for Off-shore Banking Units Movement in specific provision on classified loans / investments: Provision held as on 1 January Add: Transferred from Unclassified Provision of OBU Add: Net charge to profit and loss account (note-39a) Provision held as on 31 December Movement in general provision on unclassified loans / investments Provision held as on 1 January Add: Amount transferred to classified provision of OBU Add: General provision made during the year (note-39a) Provision held as on 31 December 14a.6 Interest suspense account Balance as on 1 January Add: Amount transferred to “interest suspense” account during the year Less: Amount recovered from “interest suspense” account during the year Less: Amount written-off during the year Balance as on 31 December 14a.7 Other provision for classified assets Balance as on 1 January Add: Addition during the year (note-39a) Less: Adjustment during the year Balance as on 31 December
303
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka
15
2015
2014
25,000,000,000
25,000,000,000
30,000,000 ordinary shares of Taka 10 each issued for cash
300,000,000
300,000,000
883,821,276 ordinary shares of Taka 10 each issued as bonus shares
8,838,212,760
8,838,212,760
115,527,340 ordinary shares of Taka 10 each issued as right shares
1,155,273,400
1,155,273,400
10,293,486,160
10,293,486,160
Share capital
15.1 Authorized capital 2,500,000,000 ordinary shares of Taka 10 each 15.2 Issued, subscribed and fully paid up capital
15.3 History of paid-up capital Given below the history of raising of share capital of Prime Bank Limited: Accounting year Declaration
No of share
Value in capital
Cumulative
1995
Opening capital
10,000,000
100,000,000
100,000,000
1996
60% Bonus share
6,000,000
60,000,000
160,000,000
1997
25% Bonus share
4,000,000
40,000,000
200,000,000
1999
Initial Public Offer (IPO)
20,000,000
200,000,000
400,000,000
2000
25% Bonus share
10,000,000
100,000,000
500,000,000
2001
20% Bonus share
10,000,000
100,000,000
600,000,000
2002
16.67% Bonus share
10,000,000
100,000,000
700,000,000
2003
42.86% Bonus share
30,000,000
300,000,000
1,000,000,000
2004
40% Bonus share
40,000,000
400,000,000
1,400,000,000
2005
25% Bonus share
35,000,000
350,000,000
1,750,000,000
2006
30% Bonus share
52,500,000
525,000,000
2,275,000,000
2007
25% Bonus share
56,875,000
568,750,000
2,843,750,000
2008
25% Bonus share
71,093,750
710,937,500
3,554,687,500
2009
30% Bonus share
106,640,620
1,066,406,200
4,621,093,700
25% right share
115,527,340
1,155,273,400
5,776,367,100
2010
35% Bonus share
202,172,848
2,021,728,480
7,798,095,580
2011
20% Bonus share
155,961,911
1,559,619,110
9,357,714,690
2012
10% Bonus share
93,577,147
935,771,470
10,293,486,160
1,029,348,616
10,293,486,160
15.4 Percentage of shareholdings at the closing date Particulars
2014
2015
2014
Taka
Taka
%
%
Sponsors
4,052,540,940
4,172,290,330
39.37%
40.53%
Financial Institutions
2,602,745,660
2,256,814,180
25.29%
21.92%
Foreign Investors
38,472,820
140,552,070
0.37%
1.37%
Non- resident Bangladeshi
29,691,770
39,915,690
0.29%
0.39%
3,570,034,970
3,683,913,890
34.68%
35.79%
10,293,486,160
10,293,486,160
100.00%
100.00%
General Public
304
2015
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
15.5 Shareholding range on the basis of shareholdings as at 31 December 2015 Taka
Number of share holders
Shareholding range
Shares
Percentage
Less than 500
8,151
1,444,463
0.14%
500- 5,000
7,801
13,618,144
1.32%
5,001 - 10,000
1,157
8,396,006
0.82%
10,001 - 20,000
630
9,157,013
0.89%
20,001 - 30,000
192
4,744,778
0.46%
30,001 - 40,000
97
3,422,445
0.33%
40,001 - 50,000
82
3,699,414
0.36%
50,001 - 100,000
187
13,161,160
1.28%
100,001 - 1,000,000
227
72,568,889
7.05%
Over 1,000,000
128
899,136,304
87.35%
18,652
1,029,348,616
100.00%
15.6 Name of the Directors and their shareholdings as at 31 December 2015 Sl Name of the directors 1
Mr. Azam J Chowdhury (Representative of East Coast Shipping Lines Ltd.)
Status Chairman
Opening position
Closing position
20,601,158
20,601,158
% of shares as at 31.12.2015 2.00 (Share holding of East Cost Shipping Lines Ltd.)
2
Mr. Khandker Mohammad Khaled
Vice Chairman
28,570,378
28,570,378
3
Mr. M. A. Khaleque
Vice Chairman
21,846,820
21,846,820
2.78 2.12
4
Quazi Sirazul Islam
Director
20,616,158
20,616,158
2.00 3.69
5
Mr. Md. Nader Khan
Director
38,019,361
38,019,361
6
Mr. Md. Shirajul Islam Mollah
Director
20,644,922
20,644,922
2.01
7
Mr. Mafiz Ahmed Bhuiyan
Director
20,591,099
20,591,099
2.00
8
Mr. Md. Shahadat Hossain
Director
27,811,583
27,811,583
9
Mr. Mohammad Mushtaque Ahmed Tanvir
Director
20,760,250
20,760,250
(Share holding of Uniglory Cycle Industries Ltd.)
Director
20,882,328
21,132,328
2.05 2.27
(Representative of Uniglory Cycle Industries Ltd.)
10 Mrs. Marina Yasmin Chowdhury
2.70 2.02
11 Mrs. Nasim Anwar Hossain
Director
23,365,749
23,365,749
12 Mrs. Salma Huq
Director
32,254,341
32,254,341
3.13
13 Mr. Tarique Ekramul Haque
Director
-
20,600,391
2.00
14 Mr. Nafis Sikder
Director
25,826,178
25,826,178
2.51
15 Mr. Imran Khan
Director
20,588,337
20,588,337
2.00
Waheed Murad Jamil 16 Mr. (Representative of Mawsons Limited.)
Director
-
20,587,749
2.00
Independent Director
-
-
-
17 Mr. Shamsuddin Ahmad, Ph.d 18 Dr. G. M. Khurshid Alam
Independent Director
-
-
-
19 Mr. M. Farhad Hussain, FCA
Independent Director
-
-
-
Managing Director
-
-
-
342,378,662
383,816,802
20 Mr. Ahmed Kamal Khan Chowdhury
Directors of the Bank complies with the requirements at SEC notification no-SEC/CMRRCD/2009-193/119/Admin/34 dated 21/11/2011 regarding holding of shares which states that â&#x20AC;&#x153;each Director other than Independent Directors of any listed company shall hold minimum 2% (Two percent) share of the Paid-up Capital otherwise there shall be a casual vacancy of Directorsâ&#x20AC;?.
305
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
15.7 Capital to risk weighted assets ratio (Consolidated) In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no. 35 dated December 29, 2010, BRPD Circular no. 07 dated March 31, 2014 and BRPD Circular no.18 dated 21 December 2014, required capital of the Bank (Consolidated) at the close of business on 31 December 2015 was Taka 23,084,490,041 as against available Tier-I capital of Taka 22,999,026,164 and Tier-II capital of Taka 6,302,813,104 making a total capital of Taka 29,301,839,268 thereby showing a surplus capital / equity of Taka 6,217,349,227 at that date. Details are shown below: Tier-1 Capital Common Equity Tier-1 (CET-1) Capital Paid-up capital (note-15.2)
10,293,486,160
10,293,486,160
Share premium (note-15.8)
2,241,230,396
2,241,230,396
Minority interest(note-15.9)
60
60
Statutory reserve (note-16)
8,735,049,935
8,184,646,579
General reserve Surplus in consolidated profit and loss account / Retained earnings (note-20)
28,002,888
28,002,888
1,854,740,856
1,864,033,818
23,152,510,295
22,611,399,902
-
-
-
-
71,247,453
-
82,236,679
-
Additional Tier-1 (AT-1) Capital Non-cumulative irredeemable preference shares Less: Regulatory Adjustments for CET-1 Capital Goodwill and all other intangible assets Reciprocal Crossholdings
153,484,132
-
22,999,026,164
22,611,399,902
Tier-2 Capital General provision maintained against unclassified loan / investments (note-14a.3) General provision on off-balance sheet exposures (note-14a.4)
-
1,663,649,518
-
1,088,490,000
General provision on off-shore Banking Units (note-14a.5)
-
77,500,000
* General provision including off-balance sheet exposures
2,516,687,762
-
Revaluation gain / loss on investments-50% of total (note-17)
230,897,400
230,897,400
Total Tier-1 Capital
Revaluation reserve-50% of total (note-18) Prime Bank Sub-ordinated Bond
751,759,278
751,759,278
3,000,000,000
1,000,000,000
6,499,344,440
4,812,296,196
Less: Regulatory Adjustments Revaluation Reserves for fixed assets, securities and equity securities Total Tier-2 Capital A) Total Regulatory capital Total assets including off-balance sheet exposures B) Total risk weighted assets C) Required capital based on risk weighted assets (10% on B) D) Surplus (A-C)
196,531,336
-
6,302,813,104
4,812,296,196
29,301,839,268
27,423,696,097
369,161,583,546
374,460,497,009
230,844,900,410
216,324,253,765
23,084,490,041
21,632,425,376
6,217,349,227
5,791,270,721
12.69%
12.68%
Capital to risk weighted assets ratio Capital requirement
Required
Held
Required
Tier -1 Capital
5.50%
9.96%
5.00%
Tier -2 Capital
4.50%
2.73%
5.00%
10.00%
12.69%
Total Capital to risk weighted assets ratio
10.00%
Held 10.45% 2.23% 12.68%
Leverage Ratio Particulars Leverage ratio
Required 3.30%
Held 7.57%
Required
Held
-
* According to the Basel III guidelilnes, general provision eligible for inclusion in Tier-2 will be limited to a maximum 1.25 percentage points of credit risk-weighted assets.
306
-
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
Capital to risk weighted assets ratio (Solo) Tier-1 Capital Common Equity Tier-1 (CET-1) Capital Paid-up capital (note-15.2)
10,293,486,160
10,293,486,160
Share premium (note-15.8)
2,241,230,396
2,241,230,396
Statutory reserve (note-16)
8,735,049,935
8,184,646,579
1,835,865,125
1,791,274,627
23,105,631,616
22,510,637,762
-
-
-
-
-
-
Goodwill and all other intangible assets
70,946,531
-
Reciprocal Crossholdings
58,051,004
-
128,997,535
-
22,976,634,081
22,510,637,762
General provision maintained against unclassified loan / investments (note-14a.3)
-
1,663,649,518
General provision on off-balance sheet exposures (note-14a.4)
-
1,088,490,000
General provision on off-shore Banking Units (note-14a.5)
-
77,500,000
* General provision including off-balance sheet exposures
2,528,201,094
-
220,734,813
220,734,813
Surplus in consolidated profit and loss account / Retained earnings (note-20)
Additional Tier-1 (AT-1) Capital Non-cumulative irredeemable preference shares Less: Regulatory Adjustments for CET-1 Capital Shortfall in provisions required against investments in shares
Total Tier-1 Capital Tier-2 Capital
Revaluation gain / loss on investments-50% of total (note-17a) Revaluation reserve-50% of total (note-18) Prime Bank Sub-ordinated Bond
751,759,278
751,759,278
3,000,000,000
1,000,000,000
6,500,695,185
4,802,133,609
Less: Regulatory Adjustments Revaluation Reserves for fixed assets, securities and equity securities
194,498,818
-
6,306,196,367
4,802,133,609
29,282,830,448
27,312,771,370
Total assets including off-balance sheet exposures
367,848,419,408
373,023,367,945
B) Total risk weighted assets
229,842,911,808
214,891,840,014
22,984,291,181
21,489,184,001
6,298,539,267
5,823,587,369
12.74%
12.71%
Total Tier-2 Capital A) Total Regulatory capital
C) Required capital based on risk weighted assets (10% on B) D) Surplus (A-C) Capital to risk weighted assets ratio Capital requirement Tier -1 Capital Tier -2 Capital Total Capital to risk weighted assets ratio
Required 5.50%
Held 10.00%
4.50%
2.74%
10.00%
12.74%
Required 5.00%
Held 10.48%
5.00%
2.23%
10.00%
12.71%
Leverage Ratio Particulars Leverage ratio
Required 3.30%
Held 7.59%
Required
Held
-
-
* According to the Basel III guidelilnes, general provision eligible for inclusion in Tier-2 will be limited to a maximum 1.25 percentage points of credit risk-weighted assets.
307
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
15.8 Share premium 11,552,734 ordinary shares of Taka 200 each per share Less: Income tax deduction at source @ 3% on total premium
2,310,546,800
2,310,546,800
69,316,404
69,316,404
2,241,230,396
2,241,230,396
15.9 Minority interest Share capital Retained earnings 16
60 0.28
60
60
8,184,646,579
7,528,626,614
Statutory reserve Balance on 1 January Addition during the year ( 20% of pre-tax profit) Balance at 31 December 2015
17
60 0.40
550,403,356
656,019,965
8,735,049,935
8,184,646,579
1,791,992,895
441,469,626
33,663,400
3,727,540
Consolidated revaluation gain / loss on investments Prime Bank Limited (note-17a) Gain on revaluation of Investment at Prime Exchange Co. Pte. Ltd., Singapore Gain on revaluation of Investment at Prime Exchange (UK) Ltd. Gain on revaluation of Investment at PBL Finance (Hong Kong) Limited
1,780,776
4,104,926
6,367,995
12,492,708
1,833,805,066
461,794,800
441,469,626
109,193,803
17(a) Revaluation gain / loss on investments of the Bank Opening balance on 1 January Add: Amortized/Revaluation Gain Less: Adjustment of amortization/revaluation gain against sale/maturity Add: Adjustment of revaluation gain/(loss) of OBU fixed assets Less: Adjustment of Revaluation loss
18
3,113,018,555
622,833,216
(1,762,480,631)
(290,552,049)
(14,654)
(5,346)
-
-
1,791,992,895
441,469,626
1,778,219,183
1,778,219,183
-
-
Revaluation reserve Balance on 1 January Addition during the year Balance at 31 December 2015
1,778,219,183
1,778,219,183
Less: Provision for deferred tax
(266,807,752)
(274,700,627)
1,511,411,431
1,503,518,556
Prime Bank Limited (note-19a)
5,995,523
5,086,036
Prime Bank Investment Limited
-
-
Prime Bank Securities Limited
-
-
(164,670)
(302,730)
The Bank revalued the assets of Land and Buildings details described in note 2.5 19
Consolidated foreign currency translation gain/ (loss)
Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
23,223
54,804
291,081
54,790
6,145,156
4,892,900
5,086,036
4,513,294
909,487
572,743
5,995,523
5,086,036
19a Foreign currency translation gain/ (loss) Balance on 1 January Addition during the year Balance at 31 December 2015
308
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 20
Consolidated retained earnings / movement of profit and loss account Prime Bank Limited (note-20a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Less: Minority Interest Less: Profit Remitted by Prime Exchange Co. Pte. Ltd., Singapore Less: Profit Remitted by PBL Finance (Hong Kong) Limited Less: Foreign currency translation gains
20a
20.1
Retained earnings / movement of profit and loss account of the Bank Balance on 1 January Addition during the year Transfer to statutory reserve Cash dividend Issue of bonus shares Balance at 31 December 2015 Add: Foreign currency translation gain/ (loss) Consolidated retained earnings brought forward from previous year Prime Bank Limited (note-20.1 a) Prime Bank Investment Ltd. Prime Bank Securities Ltd. Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Foreign currency translation gain on 1 January
20.1.a
21
Retained earnings brought forward from previous year of the Bank Balance on 1 January Bonus shares issued Cash dividend paid Balance at 31 December 2015 Foreign currency translation gain on 1 January
2014
1,836,774,612 19,922,830 (30,126,512) 7,018,200 (47,872,274) 126,313,545 1,912,030,401 (0.40) (1,627,343) (54,603,082) (1,059,120) 1,854,740,856
1,791,847,369 14,117,109 17,484,332 40,234,150 (48,578,004) 105,232,830 1,920,337,787 (0.28) (5,904,302) (50,020,059) (379,607) 1,864,033,818
1,791,274,627 2,139,016,778 (550,403,356) (1,544,022,924) 1,835,865,125 909,487 1,836,774,612
1,341,080,535 2,392,899,827 (656,019,965) (1,286,685,770) 1,791,274,627 572,743 1,791,847,369
247,251,703 14,117,109 17,484,332 38,460 (48,578,004) 609,689 230,923,288 1,219,320 232,142,608
54,394,765 198,499,857 49,055,787 19,946,318 (49,495,332) 490,720 272,892,115 1,624,702 274,516,818
1,791,274,627 (1,544,022,924) 247,251,703 247,251,703
1,341,080,535 (1,286,685,770) 54,394,765 54,394,765
26,440,235,317 26,440,235,317
26,742,389,739 26,742,389,739
63,736,691,078 63,736,691,078
61,408,149,593 61,408,149,593
Consolidated contingent liabilities
21.1 Acceptances and endorsements Prime Bank Limited (note-21a.1) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited 21.2 Letters of guarantee Prime Bank Limited (note-21a.2) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
309
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 21.3 Irrevocable Letters of Credit Prime Bank Limited (note-21a.3) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
21.4 Bills for collection Prime Bank Limited (note-21a.4) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
21a
2015
2014
16,902,956,132 16,902,956,132
20,698,448,178 20,698,448,178
8,607,304,495 8,607,304,495 115,687,187,022
9,262,180,366 9,262,180,366 118,111,167,875
22,217,861,839 3,795,495,346 426,878,132 26,440,235,317 (5,275,533,369) 21,164,701,947
21,774,217,291 4,509,657,895 458,514,552 26,742,389,739 (5,539,717,082) 21,202,672,657
19,902,808,871 43,833,882,206 63,736,691,078 (1,118,046,375) 62,618,644,703
19,812,783,078 41,595,366,515 61,408,149,593 (1,207,823,431) 60,200,326,162
93,292,136 980,043,463 62,663,355,478 63,736,691,078 (1,118,046,375) 62,618,644,703
20,344,060 1,909,382,141 59,478,423,392 61,408,149,593 (1,207,823,431) 60,200,326,162
4,797,132,088 6,213,489,934 5,892,334,110 16,902,956,132 (1,406,644,553) 15,496,311,580
5,037,481,634 10,264,457,760 5,396,508,785 20,698,448,178 (1,351,138,286) 19,347,309,892
8,607,304,495 8,607,304,495 (94,589,168) 8,512,715,328
9,262,180,366 9,262,180,366 (79,490,309) 9,182,690,056
Contingent liabilities of the Bank
21a.1 Acceptances and endorsements Back to back bills (Foreign) Back to back bills (Local) Back to back bills (EPZ) Less: Margin 21a.2 Letters of guarantee Letters of guarantee (Local) Letters of guarantee (Foreign) Foreign counter guarantees Less: Margin
Money for which the Bank is contingently liable in respect of guarantees given favoring: Directors or officers Government Banks and other financial institutions Others Less: Margin 21a.3 Irrevocable Letters of Credit Letters of credit (Sight) Letters of credit (Deferred) Back to back L/C Less: Margin
21a.4 Bills for collection Outward bills for collection Less: Margin
310
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 22
2014
Income statement Income: Interest, discount and similar income (note-22.1)
23,473,523,543
24,560,584,428
65,877,165
79,659,231
1,183,973,742
1,156,719,912
Gains less losses arising from dealing in securities
-
-
Gains less losses arising from investment securities
-
-
772,110,598
876,405,326
Dividend income (note-25a) Fees, commission and brokerage (note-22.2)
Gains less losses arising from dealing in foreign currencies (note-26a.1) Income from non-banking assets Other operating income (note-27a) Profit less losses on interest rate changes
-
-
834,179,112
806,468,141
-
-
26,329,664,160
27,479,837,038
14,256,808,068
15,573,523,588
-
-
Administrative expenses (note-22.3)
4,754,701,605
4,302,204,792
Other operating expenses (note-38a)
1,075,884,353
1,114,305,707
Expenses: Interest / profit paid on deposits, borrowings, etc. (note-24a) Losses on loans, advances and lease/ investments
Depreciation on banking assets (note-37a)
335,846,930
333,115,035
20,423,240,956
21,323,149,122
5,906,423,204
6,156,687,916
15,550,674,068
18,445,885,369
22.1 Interest, discount and similar income Interest income / Profit on investments (note-23a) Interest income on treasury bills / reverse repo / bonds (note-25a)
5,317,290,316
4,998,194,457
Gain on Discounted bond / bills (note-25a)
1,265,573,443
1,029,558,633
Gain on sale of shares (note-25a) Gain on Govt. security trading (note-25a) Interest on debentures (note-25a) Less: Loss on sale/revaluation of security trading (note-25a)
81,040
17,605,179
1,764,531,911
255,904,955
45,136,173
56,714,976
23,943,286,950
24,803,863,571
469,763,407
243,279,143
23,473,523,543
24,560,584,428
1,183,973,742 1,183,973,742
1,156,719,912 1,156,719,912
3,591,875,120
3,279,735,275
675,180,264
582,596,952
55,050,183
35,854,242
22.2 Fees, commission and brokerage Commission (note-26a) Settlement fee-PBIL (note-26a) 22.3 Administrative expenses Salary and allowances (note-28a) Rent, taxes, insurance, electricity, etc. (note-29a) Legal expenses (note-30a) Postage, stamp, telecommunication, etc. (note-31a)
137,639,651
112,446,490
Stationery, printing, advertisement, etc. (note-32a)
221,594,008
210,809,010
10,060,931
8,674,785
Directors' fees (note-34a)
3,452,280
3,799,929
Auditors' fees (note-35a)
1,150,000
1,150,000
Managing Director's salary and fees (note-33)
Repair of Bank's assets (note-37a)
58,699,168
67,138,108
4,754,701,605
4,302,204,792
311
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 23
Consolidated interest income / profit on investment Prime Bank Limited (note-23a)
15,550,674,068
18,445,885,369
Prime Bank Investment Limited
314,585,833
391,826,475
Prime Bank Securities Limited
6,897,066
11,667,012
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited Less: Inter-company transactions
23a
Loans against imported merchandise / Murabaha Loans against trust receipts Packing credit
84,434,808 18,933,813,664
404,917,960
465,893,062
15,566,795,107
18,467,920,602
3,079,697,761
3,541,296,853
127,859
8,800,379
687,232,732
1,160,197,662
36,791,461
52,004,730
House building loan
431,553,691
534,957,359
Lease finance / Izara
522,888,234
719,886,856
Hire purchase
730,351,298
901,394,752
Payment against documents
9,979,828
20,866,736
2,080,785,933
2,510,348,691
Secured overdraft
2,739,638,189
3,637,595,881
Consumer credit scheme
Cash credit / Bai-Muajjal
1,844,208,977
2,025,943,938
Staff loan
130,593,621
121,324,259
Small and Medium Enterprise (SME)
927,212,255
773,839,769
Agricultural Loan
73,840,314
159,705,030
Forced loan
37,300,398
44,346,278
Documentary bills purchased
404,613,076
462,666,395
Interest income from credit card
241,036,146
238,602,584
Other loans and advances / Investments Total interest / profit on loans and advances / investments
1,280,809,766
1,281,442,730
15,258,661,538
18,195,220,882
Interest / profit on balance with other banks and financial institutions
46,236,823
1,892,083
Interest on call loans
41,007,500
83,109,736
204,768,206
165,662,668
15,550,674,068
18,445,885,369
Prime Bank Limited (note-24a)
14,256,808,068
15,573,523,588
Prime Bank Investment Limited
370,054,659
452,709,342
40,539,482
46,302,622
-
-
Interest / profit received from foreign banks
Consolidated interest / profit paid on deposits, borrowings, etc.
Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
Less: Inter-company transactions
312
99,556,101 15,971,713,068
Interest income / profit on investment of the Bank Loans (General) / Musharaka
24
2014
-
-
33,442,892
25,717,753
14,700,845,101
16,098,253,305
406,212,086
469,094,461
14,294,633,015
15,629,158,843
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 24a
2014
Interest / profit paid on deposits, borrowings, etc. of the Bank i.
Interest / profit paid on deposits: Savings bank / Mudaraba savings deposits Special notice deposits Term deposits / Mudaraba term deposits Deposits under scheme
ii.
1,117,143,575
920,693,312
667,506,220
769,330,607
6,512,914,372
8,237,080,877
4,908,180,082
4,992,418,311
Foreign currency deposits (note-24a.1)
14,575,844
15,409,740
Others
44,455,761
37,002,013
13,264,775,853
14,971,934,861
9,970,972
37,265,181
1,209,580
32,348,366
60,461,098
7,495,873
Interest / Profit paid for borrowings: Call deposits Repurchase agreement (repo) Bangladesh Bank-refinance Local bank accounts
173,182,477
127,279,499
Foreign bank accounts
210,803,977
109,699,808
PBL bond
536,404,110
287,500,000
992,032,215
601,588,727
14,256,808,068
15,573,523,588
Interest / profit paid on F.C
7,807,094
11,816,544
Interest / profit paid on N.F.C.D
6,768,750
3,593,196
Interest / profit paid on R. F.C.D
-
-
14,575,844
15,409,740
Prime Bank Limited (note-25a)
7,988,726,640
6,194,358,289
Prime Bank Investment Limited
37,697,115
61,528,131
Prime Bank Securities Limited
2,997,884
2,643,871
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
24a.1 Foreign currency deposits
25
Consolidated investment income
PBL Finance (Hong Kong) Limited
Less: Inter-company transactions
25a
-
-
8,029,421,639
6,258,530,291
-
-
8,029,421,639
6,258,530,291
Investment income of the bank Interest on treasury bills / Reverse repo / bonds
5,317,290,316
4,998,194,457
Interest on debentures / bonds
45,136,173
56,714,976
Gain on discounted bond / bills
1,265,573,443
1,029,558,633
81,040
17,605,179
1,764,531,911
255,904,955
Gain on sale of shares Gain on Govt. security trading Dividend on shares Less: Loss on sale/revaluation of security trading
65,877,165
79,659,231
8,458,490,047
6,437,637,432
469,763,407
243,279,143
7,988,726,640
6,194,358,289
313
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 26
Consolidated commission, exchange and brokerage Prime Bank Limited (note-26a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
26a
2014
1,956,084,340 36,146,727 20,618,556 51,206,364 40,133,668 2,104,189,655
2,033,125,238 53,751,361 30,121,613 72,320,132 44,636,299 2,233,954,643
214,244,945 379,663,140 480,105,773 70,591,373 22,553,222 16,815,290 1,183,973,742 772,110,598 1,956,084,340
237,368,368 407,349,243 377,763,760 74,493,576 1,501,206 46,569,530 11,674,229 1,156,719,912 876,405,326 2,033,125,238
773,653,071
876,433,792
Commission, exchange and brokerage of the Bank Commission on L/Cs Commission on L/Cs-back to back Commission on L/Gs Commission on remittance Commission for services rendered to issue of shares Merchant Commission Underwriting Commission regarding Treasury bill/ Bond Commission from sale of BSP /PSP Exchange gain (note - 26a.1) - including gain from FC dealings Settlement fees / Brokerage
26a.1 Exchange gain Exchange gain Exchange gain-credit card
-
-
(1,542,473)
(28,466)
772,110,598
876,405,326
Prime Bank Limited (note-27a)
834,179,112
806,468,141
Prime Bank Investment Limited
16,889,121
23,193,276
Less: Exchange loss
27
Consolidated other operating income
Prime Bank Securities Limited
542,394
971,313
Prime Exchange Co. Pte. Ltd., Singapore
250,255
979,239
PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited Less: Inter-company transactions
27a
-
-
57,158,676
54,459,314
909,019,558
886,071,283
1,294,126
3,201,399
907,725,432
882,869,884
Other operating income of the Bank Rent recovered Service and other charges Retail Income Income from ATM service
8,147,564
8,323,697
63,404,965
72,669,789
214,144,265
212,931,338
106,820,338
112,559,700
Credit card income (note-27a.2)
44,703,680
45,111,771
Postage / telex / SWIFT/ fax recoveries
178,642,207
172,324,387
Incidental charges Rebate from foreign Bank outside Bangladesh Profit on sale of fixed assets Miscellaneous earnings (note-27a.1)
-
100
58,334,327
77,611,186
497,917
1,363
159,483,850
104,934,811
834,179,112
806,468,141
27a.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank, notice fee and sale proceeds of various items, etc.
314
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
Annual fees
20,049,523
22,082,937
Inter-change fees
24,249,533
21,791,785
404,623
1,237,049
44,703,680
45,111,771
3,591,875,120 26,189,519 12,237,012 21,122,273 19,238,535 20,831,052 3,691,493,512
3,279,735,275 28,775,522 12,735,339 21,618,106 21,652,530 29,855,172 3,394,371,944
1,546,182,253 1,025,326,131 452,928,007 145,488,331 2,853,361 419,097,038 3,591,875,120
1,356,779,270 958,027,048 455,631,477 123,886,019 4,258,494 381,152,966 3,279,735,275
Prime Bank Limited (note-29a)
675,180,264
582,596,952
Prime Bank Investment Limited
6,175,792
7,993,200
Prime Bank Securities Limited
5,511,831
5,159,239
12,109,502
12,346,270
PBL Exchange (UK) Ltd.
11,815,691
11,729,050
PBL Finance (Hong Kong) Limited
8,155,335
7,765,727
718,948,414
627,590,438
394,771,802
319,980,722
27a.2 Credit card income
Others
28
Consolidated salaries and allowances Prime Bank Limited (note-28a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
28a
Salaries and allowances of the Bank Basic pay Allowances Bonus Bank's contribution to provident fund Retirement benefits Gratuity
29
Consolidated rent, taxes, insurance, electricity, etc.
Prime Exchange Co. Pte. Ltd., Singapore
29a
Rent, taxes, insurance, electricity, etc. of the Bank Rent, rates and taxes Lease rent
92,393
88,281
Insurance
157,257,436
143,111,343
Power and electricity
30
123,058,632
119,416,606
675,180,264
582,596,952
55,050,183 195,500 57,500 1,349,179 1,619,122 569,976 58,841,460
35,854,242 238,050 80,500 1,327,337 1,934,549 132,035 39,566,713
Legal expenses
24,770,886
16,529,650
Other professional charges
30,279,297
19,324,592
55,050,183
35,854,242
Consolidated legal expenses Prime Bank Limited (note-30a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
30a
Legal expenses of the Bank
315
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka
31
2015
2014
Prime Bank Limited (note-31a)
137,639,651
112,446,490
Prime Bank Investment Limited
1,467,110
995,916
377,115
409,428
Consolidated postage, stamp, telecommunication, etc.
Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
31a
17,049,863
15,590,175 44,983,403
Data communication
54,053,192
24,748,451
Telephone - office
28,329,588
26,149,647
848,055
974,814
137,639,651
112,446,490
Prime Bank Limited (note-32a)
221,594,008
210,809,010
Prime Bank Investment Limited
1,048,374
1,308,710
Consolidated stationery, printing and advertisements, etc.
PBL Finance (Hong Kong) Limited
168,251
311,775
1,367,365
2,623,799
794,797
1,092,829
198,430
313,893
225,171,225
216,460,016
65,617,871
69,559,376
80,510,595
53,785,419
Stationery, printing and advertisements, etc. of the Bank Office and security stationery Computer consumable stationery Publicity and advertisement
75,465,543
87,464,216
221,594,008
210,809,010
Basic salary
6,028,999
4,481,323
Bonus
1,000,000
1,495,000
House rent allowance
1,200,000
989,398
631,932
-
Managing Director's salary and fees
Bank's contribution to provident fund Utility allowance
360,000
457,686
House maintenance allowance
480,000
700,559
Others
360,000
550,819
10,060,931
8,674,785
Prime Bank Limited (note-34a)
3,452,280
3,799,929
Prime Bank Investment Limited
293,800
239,250
43,700
43,700
Prime Exchange Co. Pte. Ltd., Singapore
-
-
PBL Exchange (UK) Ltd.
-
-
Consolidated Directors' fees
Prime Bank Securities Limited
PBL Finance (Hong Kong) Limited
316
4,240,788 120,248,747
37,358,953
PBL Exchange (UK) Ltd.
34
5,057,213 146,287,965
Telegram, telex, fax and internet
Prime Exchange Co. Pte. Ltd., Singapore
33
1,021,368
Postage & Courier
Prime Bank Securities Limited
32a
1,134,757
717,950
Postage, stamp, telecommunication, etc. of the Bank
Telephone - residence
32
1,028,926
-
-
3,789,780
4,082,879
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 34a
Directors' fees of the Bank Meeting fees Other benefits
2014
1,794,000 1,658,280 3,452,280
1,875,000 1,924,929 3,799,929
As per BRPD circular no.03 dated 18.01.2010, Tk 5,000/- has been paid as Honarioum to the Directors for all the meetings held before 03 October 2015. Subsequently, Bank has paid Tk. 8,000/-as Honarioum according to the BRPD circular letter no. 11 dated 04 October 2015. 35
35a
36
37
Consolidated Auditors' fees Prime Bank Limited (note-35a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
1,150,000 115,000 115,000 228,752 533,659 191,671 2,334,082
1,150,000 115,000 69,000 271,210 311,241 180,664 2,097,114
1,150,000 1,150,000
1,150,000 1,150,000
-
-
394,546,098 4,650,111 1,801,834 3,156,149 1,915,718 1,435,546 407,505,456
400,253,143 6,428,119 2,654,663 3,602,317 2,292,974 1,979,371 417,210,587
285,485,875 375,265 285,861,140
291,131,795 3,793,227 294,925,021
39,505,858 10,479,932 49,985,790
34,433,167 3,756,847 38,190,014
4,970,809 5,363,374 33,590,216 9,621,669 5,153,101 58,699,168 394,546,098
4,523,282 10,882,447 32,717,379 9,357,054 9,657,946 67,138,108 400,253,143
Prime Bank Limited (note-38a)
1,075,884,353
1,114,305,707
Prime Bank Investment Limited
10,267,486
12,705,853
Auditors' fees of the Bank External Audit fee Charges on loan losses Loan -written off Interest waived Consolidated depreciation and repair of Bank's assets Prime Bank Limited (note-37a) Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
37a
Depreciation and repair of Bank's assets Depreciation - (see annexure-C for detail) Fixed assets Leased assets Amortization -(see annexure-C for detail) Software-core banking Software-ATM Repairs Building Furniture and fixtures Office equipment Bank's vehicles Maintenance
38
Consolidated other expenses
Prime Bank Securities Limited
5,327,607
5,863,524
Prime Exchange Co. Pte. Ltd., Singapore
5,376,415
14,190,798
PBL Exchange (UK) Ltd.
4,149,497
6,506,926
1,831,771
2,679,915
1,102,837,129
1,156,252,723
PBL Finance (Hong Kong) Limited
317
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 38a
2014
Other expenses of the Bank Security and cleaning Entertainment Car expenses ATM expenses Retail expenses Books, magazines and newspapers, etc. Liveries and uniforms Medical expenses Bank charges and commission paid Loss on sale of fixed assets Finance charge for lease assets House furnishing expenses Subscription to institutions Donations Sponsorship Prime Bank Cricket Club Traveling expenses Expenses for merchant banking Local conveyance, labor, etc. Business development Training and internship Remittance charges Cash reward to branches Laundry, cleaning and photographs, etc. Credit card expenses Consolidated salary (staff) Annual General Meeting Exgratia Welfare fund Prime Bank Foundation Miscellaneous expenses
194,080,166 38,936,422 167,231,766 160,090,421 65,101,170 2,076,086 839,455 243,489 5,114,290 224,694 2,530,644 12,218,082 49,832,068 30,790,575 16,180,046 29,567,029 63,474 15,908,174 20,762,286 13,754,312 9,044,328 1,708,000 6,292,173 34,690,664 29,183,835 2,400,210 14,710,228 5,504,033 110,080,671 36,725,563 1,075,884,353
162,915,686 40,994,187 165,854,269 155,814,918 87,845,530 1,772,786 821,726 137,934 4,834,775 281,382 97,507 2,476,934 10,068,894 39,140,323 22,593,888 47,000,000 31,403,376 5,112 17,595,136 36,135,564 21,257,378 9,457,108 2,235,000 5,786,304 38,057,189 26,808,753 2,423,555 15,805,148 6,560,200 131,203,993 26,921,153 1,114,305,707
Previously, expenses of Prime Bank Cricket Club was included under the head of â&#x20AC;&#x153;Sponsorshipâ&#x20AC;?. Now it is presented in seperately. 39
Consolidated provision for loans, investments, off balance sheet exposure & other assets Provision for bad and doubtful loans and advances / investments-PBL (note-39a) Provision for unclassified loans and advances / investments-PBL (note-39a)
2,690,000,000
2,643,500,000
293,000,000
114,000,000
1,700,000
30,000,000
Provision for unclassified loans and advances / investments (OBU) (note-39a)
38,200,000
46,000,000
Provision for off-balance sheet exposure-PBL (note-39a)
68,400,000
(1,510,000)
7,000,000
(7,000,000)
(63,391,138)
(49,637,089)
35,899,749
245,135,052
2,432,034
(428,503)
Provision for bad and doubtful loans and advances (OBU) (note-39a)
Provision for diminution in value of investments-PBL (note-39a) Provision for diminution in value of investments-PBIL Provision for impairment of client margin loan-PBIL Provision for diminution in value of investments-PBSL Provision for impairment of client margin loan-PBSL Provision for impairement loss for investment in subsidiaries (note-39a)
10,305,609
3,675,143
31,136,426
45,398,089
Provision for climate risk fund (note-39a)
2,000,000
-
Provision for Good Borrower rebate (note-39a)
5,000,000
-
Provision for other assets (note-39a)
17,970,000
6,200,000
3,139,652,680
3,075,332,692
As per the Press release # BSEC/Mukhopatro (2nd khondo)/2011/2205 dated 30 November 2015 of Bangladesh Securities and Exchange Commission and Bangladesh Bank DOS Circular Letter no 03, dated 12 March 2015, 20% provision has been made by Prime Bank Securities Limited and Prime Bank Investment Limited against provision on diminution in value of investments and impairment of client margin loan.
318
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 39a
Provision for loans, investments, off balance sheet exposure & other assets of the Bank
Provision for bad and doubtful loans and advances / investments Provision for unclassified loans and advances / investments Provision for bad and doubtful loans and advances (OBU)
2,690,000,000
2,643,500,000
293,000,000
114,000,000
1,700,000
30,000,000
Provision for unclassified loans and advances / investments (OBU)
38,200,000
46,000,000
Provision for off-balance sheet exposure
68,400,000
(1,510,000)
Provision for diminution in value of investments
7,000,000
(7,000,000)
Provision for impairement loss for investment in subsidiaries
31,136,426
45,398,089
Provision for climate risk fund
2,000,000
-
Provision for Good Borrower rebate
5,000,000
-
Provision for other assets
40
2014
17,970,000
6,200,000
3,154,406,426
2,876,588,089
713,000,000
1,180,000,000
Prime Bank Investment Limited
7,127,747
8,532,689
Prime Bank Securities Limited
536,228
490,088
Prime Exchange Co. Pte. Ltd., Singapore
162,528
1,044,414
-
-
14,115,168
10,870,823
734,941,671
1,200,938,014
Prime Bank Limited (note-40a)
(100,000,000)
(292,800,000)
Prime Bank Investment Limited
(580,634)
(857,621)
Prime Bank Securities Limited
Consolidated tax expenses Current tax Prime Bank Limited (note-40a)
PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
Deferred tax
(786,459)
(391,254)
Prime Exchange Co. Pte. Ltd., Singapore
-
(198,166)
PBL Exchange (UK) Ltd.
-
-
PBL Finance (Hong Kong) Limited
40a
(294,247,041)
633,574,578
906,690,973
Tax expenses of the Bank Current tax
713,000,000
1,180,000,000
(100,000,000)
(292,800,000)
613,000,000
887,200,000
Prime Bank Limited (note-41a)
3,394,602,098
1,866,257,765
Prime Bank Investment Limited
54,586,236
84,721,407
3,540,278
3,615,184
250,255
979,239
-
-
Deferred tax
41
(101,367,093)
Consolidated receipts from other operating activities
Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
57,158,676
54,459,314
3,510,137,543
2,010,032,909
319
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 41a
Receipts from other operating activities of the Bank Rent recovered Service and other charges
44,703,680
45,111,771
214,144,265
212,931,338
Income from ATM services
106,820,338
112,559,700
Postage / Telex / Fax / SWIFT charge recoveries
178,642,207
172,324,387
-
100
Gain from sale of treasury bond / shares Miscellaneous earnings
104,936,174 1,866,257,765
Prime Bank Limited (note-42a)
1,564,841,681
1,482,600,260
Prime Bank Investment Limited
18,514,688
21,815,910
Prime Bank Securities Limited
11,432,753
57,539,985
20,092,775
28,571,653
Consolidated payments for other operating activities
PBL Exchange (UK) Ltd.
18,835,919
21,117,569
PBL Finance (Hong Kong) Limited
15,805,966
10,758,340
1,649,523,781
1,622,403,717
675,180,264
582,596,952
Payments for other operating activities of the Bank
Legal expenses
55,050,183
35,854,242
Postage and communication charges, etc.
137,639,651
112,446,490
Directors' fees Other expenses
3,452,280
3,799,929
693,519,303
747,902,647
1,564,841,681
1,482,600,260
1,706,829,254
(4,074,433,703)
(Increase) / decrease of consolidated other assets Prime Bank Limited (note-43a) Inter-company capital Prime Bank Investment Limited Prime Bank Securities Limited Prime Exchange Co. Pte. Ltd., Singapore PBL Exchange (UK) Ltd. PBL Finance (Hong Kong) Limited
-
-
(1,386,055)
193,704,428
(906,890)
(6,814,745)
(2,460,603)
(19,755)
-
-
(2,191,093,212)
(132,418,404)
(489,017,506)
(4,019,982,179)
51,005,998,929
53,430,295,197
29,548,731
24,722,480
259,576,914
274,085,598
(Increase)/ decrease of other assets of the Bank T & T bonds Stationery and stamps Advance deposits and advance rent Branch adjustment account
18,996,235
18,533,017
138,049,975
384,161,142
Encashment of PSP / BSP
171,932,724
136,623,524
Credit card
79,984,853
115,268,108
8,540,321,087
7,567,549,637
Suspense account
Sundry assets
320
77,611,186 1,059,789,624
159,981,767
Rent, rates and taxes
43a
58,334,327 2,560,422,986 3,394,602,098
Prime Exchange Co. Pte. Ltd., Singapore
43
8,323,697 72,669,789
Retail Income
Rebate from foreign Bank outside Bangladesh
42a
8,147,564 63,404,965
Credit card income
Incidental charges
42
2014
60,244,409,447
61,951,238,701
1,706,829,254
(4,074,433,703)
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 44
Increase / (decrease) of consolidated other liabilities Prime Bank Limited (note-44a)
1,237,361,514
2,338,428,624
Prime Bank Investment Limited
(21,149,102)
66,278,159
Prime Bank Securities Limited
18,097,143
(129,033,153)
Prime Exchange Co. Pte. Ltd., Singapore
(12,257,109)
3,434,146
PBL Exchange (UK) Ltd.
(7,252,754)
(9,013,371)
PBL Finance (Hong Kong) Limited
44a
14,046,521
6,161,015
1,228,846,213
2,276,255,420
3,054,078,509
3,560,736,089
108,705,671
114,717,427
6,872,352
1,697,211
Increase / (decrease) of other liabilities of the Bank F.C. held against EDF L/C Expenditure and other payables Provision for bonus Unearned commission on bank guarantee
54,304,595
90,117,676
4,502,882,848
2,722,214,058
7,726,843,975
6,489,482,461
1,237,361,514
2,338,428,624
Net profit after tax (Numerator)
2,173,001,604
2,245,536,966
Number of Ordinary shares outstanding (Denominator)
1,029,348,616
1,029,348,616
2.11
2.18
Net profit after tax (Numerator)
2,139,016,778
2,392,899,827
Number of Ordinary shares outstanding (Denominator)
1,029,348,616
1,029,348,616
2.08
2.32
Interest suspense account
45
2014
Consolidated earnings per share (CEPS)
Consolidated earnings per share (CEPS) Earnings per share has been calculated in accordance with BAS - 33: “Earnings Per Share (EPS)”. 45a
Earnings per share (EPS) of the Bank
Earnings per share (EPS)
Earnings per share has been calculated in accordance with BAS - 33: “Earnings Per Share (EPS)”. 46
Number of employees of the Bank The number of employees engaged for the whole year or part thereof who received a total remuneration of Tk. 36,000 p.a. or above were 2,934.
47
Assets pledged as security for liabilities of the Bank Treasury bills & bonds to Bangladesh Bank for Repo
-
-
321
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015 48
Disclosure on Audit Committee of the Bank a) Particulars of Audit Committee The audit committee of the Board was duly constituted by the Board of Directors of the Bank in accordance with the BRPD Circular no.11 dated October 27, 2013 of Bangladesh Bank. Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 7, 2012 on Corporate Governance, the current Committee is Constituted with the following 5 (Five) members of the Board and it is also comply with the BRPD Circular No. 11 dated 27.10.2013. Status with bank Independent Mr. Shamsuddin Ahmad, Ph.D Director Mr. Md. Nader Khan Director Name
Khandker Mohammad Khaled
Status with committee
Educational Qualification
Chairman
Ph.D (Economic Development), University of Hawaii, USA
Member
B.Sc B.Sc. Engineer (Mechanical), Bangladesh University of Engineering and Technology (BUET).
Director
Member
Dr. G. M. Khurshid Alam
Independent Director
Member
Ph.D (Economic), Boston University, USA
Mr. M Farhad Hussain FCA
Independent Director
Member
GEC ”A” level from Greenmore College, Birmingham, UK. Accountancy Foundation Course, Institute of Chartered Accountants of England and Wales.
b) Meetings held by the Audit Committee during the year by date: Meeting No
Held on
103rd
24.02.2015
104th
25.03.2015
th
12.05.2015
105
106th
07.07.2015
107th
25.07.2015
108th
13.08.2015
th
21.09.2015
110th
20.10.2015
111th
07.12.2015
109
c) Review by the Audit Committee and Recommended thereof: i)
Reviewed and approved Audit plan of the year.
ii)
Reviewed the draft Annual Financial Statements-2014.
iii)
Reviewed interim financial reports (Quarterly and half-yearly) of the year-2015 before presenting to the board for approval. iv) The Committee scrutinized the applications received from the incumbent external auditors of the Bank M/S ACNABIN and Syful Shamsul Alam & Co. expressing their willingness to be re-appointed for the year 2015. v) The Committee reviewed and approved the Annual Health Report of the Bank for the year 2014 for onward reporting to Bangladesh Bank. vi) The Committee perused the half yearly Status Report depicting quantum and status of complaints received up to June 2015 under “Guidelines for customer Services and Compliant Management” of Bangladesh Bank. The Committee upon perusal advised Management to direct all concerned for discharging their duties maintaining high service quality and to be cautious and courteous while dealing with the customers and allow no opportunity of complaint. vii) The Committee perused the status of the pending disciplinary & administrative actions under reference of various special investigations conducted during the year 2015 and asked management to speed up the process for resolving the cases without lingering beyond the stipulated time frame. viii) The Committee reviewed Financial Reports of the Subsidiary Companies of the Bank. ix) x)
The Committee reviewed and examined the financial reporting process followed in the Bank. The Committee reviewed and perused all presented reports i.e. Special Investigation Report, Comprehensive/Special Inspection report, Surprise Inspection Report prepared on the basis of findings of Audit conducted on various branches and Divisions of Head Office. xi) The Committee reviewed Shariah Audit reports of the Islamic Branches and advised Management to strictly maintain the Shariah compliance to keep the religious solemnity intact. The Committee also advised to arrange regular training and educational program of Shariah Based Banking. xii) The Committee perused the compliance status of the comprehensive Inspection Report on Prime Bank Limited conducted by Bangladesh Bank as on the position of 31.12.2014.
322
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015 d) Steps taken for implementation of an effective internal control procedure of the Bank :
49
i)
The Committee issued some Guidelines on Compliance of the decisions of the Committee for prompt and meticulous actions to be taken by the Management accordingly.
ii)
The Committee issued Guidelines on Management of Cash & Mutilated Notes regarding receipt of mutilated and built-up notes at the counters of the branches and attending on regular basis.
iii)
The three Independent Members of the Audit Committee formulated a â&#x20AC;&#x153;Whistle Blower Protection Policyâ&#x20AC;? which is executed after getting approval of the Board. The Policy is intended to encourage and enable employees and others to raise serious concerns internally so that the Prime Bank Group can address and correct inappropriate conduct and actions.
Related Party Disclosures of the Bank i) Names of the Directors together with a list of entities in which they have Interest
Annexure-E
ii) Significant contracts where Bank is a party and wherein Directors have interest during the year 2015 (Figure in Taka) Relationship with the Bank
Nature of transaction
Director
Credit Card
500,000
19,619
Vice Chairman
Credit Card
500,000
477,261
Mrs. Marina Yasmin Chowdhury
Director
Credit Card
500,000
2,721
Mr. Mohammad Mushtaque Ahmed Tanvir
Director
Credit Card
500,000
39,666
Mr. Nafis Sikder
Director
Credit Card
500,000
331,747
Mrs. Nasim Anwar Hossain
Director
Credit Card
500,000
70,880
Mr. Tarique Ekramul Haque
Director
Credit Card
500,000
346,574
Quazi Sirazul Islam
Director
Credit Card
500,000
30,233
Name of Directors Mr. Imran Khan Mr. M. A. Khaleque
Approve limit
Outstanding amount
Mrs. Salma Huq
Director
Credit Card
500,000
30,048
Mr. Md. Shirajul Islam Mollah
Director
Credit Card
500,000
155,289
Mr. Shamsuddin Ahmad, Ph.D
Independent Director
Credit Card
500,000
2,990
Dr. G. M. Khurshid Alam
Independent Director
Credit Card
500,000
35,715
iii) Shares issued to Directors and Executives without consideration or exercisable at a discount
Nil
iv) Related party transactions Nature of party/ contract
Relationship
Amount
Bangla Trac Ltd.
Common Director
2,032,000
Lease agreement
Common Director
1,981,220
Lease agreement
Common Director
280,800
Lease agreement
Common Director
1,786,680
Lease agreement
Common Director
642,000
v) Lending policies in respect of related party a.
Amount of transaction regarding loans and advances, deposits, guarantees and commitment as on 31.12.2015
Nil
b.
Amount of transactions regarding principal items of deposits, expenses and commission
Nil
c.
Amount of provision against loans and advances given to related party
Nil
d.
Amount of guarantees and commitments arising from other off-balance sheet exposures
Nil
323
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015
Nil
vi) Disclosure of transaction regarding Directors and their related concerns
vii) Business other than banking business with any relation concern to the Directors as per Section 18(2) of the Bank Companies Act, 1991. a) Lease agreement made with the Sponsor Director & Independent Director Nature of contract
Branch Name
Name of Director and related by
Remarks
Lease agreement
Jubilee Road Branch
Mr. Md. Nader Khan Director & owner of the premises
Lease period: 01.08.2015 to 31.07.2021
Lease agreement
ATM Booth Jubilee Road Branch
Mr. Md. Nader Khan Director & owner of the premises
Lease period: 12.10.2011 to 11.10.2021
Lease agreement
Store Room (Regional)
Mr. Md. Nader Khan Director & owner of the premises
Lease period: 13.12.2014 to 12.12.2020
Lease agreement
Kulaura Branch
“Mrs. Marina Yasmin Chowdhury Director & owner of the premises”
Lease period: 01.08.2013 to 31.07.2019
b) Service receiving companies where the Directors interest subsisted during the year Name of party Bangla Trac Ltd
Relationship Common Director
Nature of transaction Procurement of Generators
viii) Investment in the Securities of Directors and their related concern
Amount 2,032,000 Nil
ix) Business with subsidiary Name of party Prime Bank Investment Limited Prime Bank Securities Limited Prime Bank Securities Limited Prime Bank Securities Limited PBL Finance (Hong Kong) Ltd 50
Relationship
Nature of transaction
Subsidiary Company Subsidiary Company Subsidiary Company Subsidiary Company Subsidiary Company
OD Facilities OD Facilities Bank Gurantee Share Trading Term Placement
Outstanding Amount 2,774,084,553 375,927,985 500,000,000 297,031,983 1,466,613,706
Workers Participation Fund and Welfare Fund SRO-336-AIN/2010 dated 5-10-2010 issued by the ‘Ministry of Labour and Employment’ and published in Bangladesh gazettee on 7-10-2010 declares the status of business of certain institutions and companies like mobile operating companies, mobile network service providing company, all Govt. and Non-govt. money lending companies, all insurance companies etc. as “Industrial Undertakings” for the purposes of Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) which deals with the workers’ participation in company’s profit by way of ‘Workers Participation Fund’ and ‘Welfare Fund’. The Bangladesh Labour Act, 2006 (as amended up to 2013) requires the “Industrial Undertakings” to maintain provision for workers’ profit participation fund @ 5% on net profit. Since this requirement contradicts with the Section 11 of the ‘Bank Companies Act 1991 (as amended up to 2013)’, Banks in Bangladesh took up the issue collectively and sought opinion from ‘Association of Bankers Bangladesh Limited (ABB)’ on the same. Subsequently, ABB collected legal opinion on this issue from the renowned lawyers of the country and refer this along with the lawyers’ opinion to the Bangladesh Bank. Considering all the observations raised in the lawyers’ opinion, conflict of Labour Act with provisions of the Bank Companies Act and the difference in activities of banks & non-banks financial institutions from those of laborintensive manufacturing companies, Bangladesh Bank has written a letter to the ‘Ministry of Labour & Employment’ of the ‘Government of People’s Republic of Bangladesh’ requesting for their recommendation on the future actions on this issue. Since Bangladesh Bank has had a support on all the relevant provisions of the Bank Companies Act and has put their priority on Bank Companies Act than the Labour Act, we expect that a positive view will come out from the ‘Ministry of Labour & Employment’ on this issue. Therefore, no provision in this regard has been made in the Financial Statements for the year ended on December 31, 2015.
51
Events after the Reporting Period The Board of Directors in its 445th meeting decided to recommend payment of 15% (fifteen percent) cash dividend for the year 2015. The total amount of dividend is Tk.1,544,022,924 (One hundred fifty four crore forty lac twenty two thousand nine hundred twenty four) only.
Chairman
324
Director
Director
Managing Director
CD CD CD CD CD CD CD CD CD CD CD
Habib Metropolitan Bank, Karachi
Habib Bank Limited, karachi
HDFC Bank Limited, Kolkata, India
HSBC Bank USA, New York, USA
HANA Bank, Seoul
ICICI Bank Ltd, Mumbai, India
Intesa Sanpaolo SPA, Milano, Italy
J. P. Morgan Chase Bank, New York
Korea Exchange Bank Seoul
Mashreq Bank PSC, New York, USA
Mashreq Bank PSC, Mumbai, India
CD
CD
Habib American Bank, New York, USA
Nepal Bangladesh Bank Ltd., Kathmandu, Nepal
CD
Deutsche Bank Trust Company Americas
CD
US$
CD
Commonwealth Bank of Australia, Australia
CD
US$
CD
National Westminister Bank, London, UK
EURO
CD
Commerz Bank AG, Frankfurt , Germany
Commerz Bank AG, Frankfurt , Germany
The National Commercial Bank, Jeddah
US$
CD
Citibank N.A., New York, USA
US$
US$
SAR
GBP
US$
US$
US$
US$
EURO
US$
US$
US$
US$
US$
US$
AUD
US$
EURO
CD CD
JP¥
Citibank N.A., Mumbai, India
CD
SMBC, Tokyo, Japan
JP¥
US$
EURO
77,215.24
243,064.00
413,004.16
163,787.11
478,014.04
50,674.61
202,727.55
76,213.47
1,165,680.73
4,195.00
786,270.13
989,275.53
162,038.97
484,289.38
200,285.90
471,110.14
67,453.80
257,345.84
1,409,014.93
9,947,331.42
182,370.07
860.36
4,399,453.00
7,164,651.00
92,955.39
-
1,136,739.46
amount
type US$
FC
Currency
Citibank N.A., London , UK
CD CD
Bank of Tokyo Mitsubishi, Japan
CD
Banca Nazio, del Lavoro, Rome, Italy
Bank of Bhutan, Bhutan
CD
Account type
AB Bank Ltd., Mumbai, India
Name of the Bank
of Prime Bank Limited as at 31 December 2015
78.5003
20.9083
116.2668
78.5003
78.5003
78.5003
78.5003
85.8008
78.5003
78.5003
78.5003
78.5003
78.5003
78.5003
78.5003
78.5003
57.1953
78.5003
85.8008
78.5003
85.8008
78.5003
0.6513
0.6513
78.5003
-
78.5003
rate
Exchange
2015
6,061,420
5,082,055
48,018,672
12,857,337
37,524,246
3,977,972
15,914,173
6,539,177
91,506,287
329,309
61,722,441
77,658,426
12,720,108
38,016,862
15,722,503
36,982,287
3,858,040
20,201,726
120,894,608
780,868,501
15,647,498
67,539
2,865,364
4,666,337
7,297,026
-
89,234,389
Taka
Equivalent
Balance with other banks-Outside Bangladesh (Nostro Account)
29,060.24
107,881.00
200,995.01
432,566.42
329,296.89
79,467.78
418,650.45
5,768.00
384,310.46
8,629.36
3,217,503.07
1,084,557.29
200,422.67
415,959.13
201,200.91
284,931.06
44,596.07
66,999.11
1,938,517.18
1,119,041.42
385,293.03
860.36
5,056,246.00
6,765,823.00
70,310.95
-
966,327.54
amount
FC
2014
77.9494
20.7682
120.9151
77.9494
77.9494
77.9494
77.9494
94.7007
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
63.3807
77.9494
94.7007
77.9494
94.7007
77.9494
0.6459
0.6459
77.9494
-
77.9494
rate
Exchange
2,265,228
2,240,494
24,303,332
33,718,293
25,668,495
6,194,466
32,633,551
546,234
29,956,770
672,653
250,802,434
84,540,590
15,622,827
32,423,765
15,683,490
22,210,205
2,826,530
5,222,540
183,578,934
87,228,607
36,487,520
67,065
3,265,829
4,370,045
5,480,696
-
75,324,652
Taka
Equivalent
Annexure-A
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
325
326 CD CD CD CD CD CD CD CD CD CD
Skandinaviska Enskilda, Banken, Sweden
Sonali Bank, Kolkata, India
Standard Chartered Bank, Kolkata, India
Standard Chartered Bank, New York, USA
Standard Chartered Bank, Singapore
Standard Chartered Bank, Frankfurt, Germany
The Bank of Nova Scotia, Canada
Unicredito Italiano SPA, Milano, Italy
Wells Fargo Bank N. A., New York
Zuercher Kantonal Bank, Zurich
Total
CD
Account type
People's Bank, Colombo, Sri Lanka
Name of the Bank
of Prime Bank Limited as at 31 December 2015
CHF
US$
EURO
CAD
EURO
SG$
US$
US$
US$
SEK
105,826.42
710,728.57
56,685.38
69,429.69
101,421.85
1,080,750.11
513,769.44
1,308,581.18
391,819.96
307,071.78
138,695.69
type US$
FC amount
Currency
79.4779
78.5003
85.8008
56.5116
85.8008
55.4929
78.5003
78.5003
78.5003
9.3219
78.5003
rate
2014 Exchange
1,845,464,037
8,410,862
55,792,406
4,863,651
3,923,583
8,702,076
59,973,958
40,331,055
102,724,015
30,757,984
2,862,492
10,887,653
Taka
Equivalent
Balance with other banks-Outside Bangladesh (Nostro Account)
FC
16,753.32
719,142.50
70,427.23
82,714.23
154,578.99
399,445.15
552,389.63
935,921.85
328,315.94
29,524.78
267,297.93
amount
78.7288
77.9494
94.7007
66.9323
94.7007
58.8831
77.9494
77.9494
77.9494
9.9069
77.9494
rate
1,253,809,239
1,318,969
56,056,726
6,669,508
5,536,254
14,638,739
23,520,569
43,058,440
72,954,547
25,592,031
292,499
20,835,713
Taka
Equivalent
Annexure-A Continued 2013 Exchange
Fi na n c i a l S t a t e m en ts PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Reconciliation statement of Balance with Bangladesh Bank as at 31 December 2015 Annexure-A-1
1) Balance with Bangladesh Bank-Taka account of the Bank Detail
Total
Balance as per Bank ledger
14,336,197,689
Unresponded debit entries in Bangladesh Bank statement Prime Bank's ledger
72,595,285 1,598
72,596,883 14,263,600,806
Unresponded credit entries in Bangladesh Bank statement Prime Bank's ledger
8,100 4,009,431
Balance as per Bangladesh Bank statement
4,017,531 14,267,618,337
2) Balance with Bangladesh Bank-Foreign currency of the Bank Balance as per Bank ledger
239,355,016
Unresponded debit entries in Bangladesh Bank statement
138,895,993
Prime Bank's ledger
189,821,760
328,717,753 (89,362,737)
Unresponded credit entries in Bangladesh Bank statement
266,276,196
Prime Bank's ledger
936,583,857
Balance as per Bangladesh Bank statement
1,202,860,053 1,113,497,315
327
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Investment in shares of the Bank as at 31 December 2015 Annexure-B SL. No.
Name of the Company
Face Value
Cost / present Average Quoted rate Total market No of shares value of per share as value as at cost holdings on 31.12.15 31.12.15
Quoted: 1
AB Bank Ltd.
10
1,673,437
47,632,736
28.46
20.90
34,974,833
2
Bank Asia Ltd.
10
1,331,000
24,429,908
18.35
16.50
21,961,500
3
The City Bank Ltd.
10
1,386,000
29,538,943
21.31
20.40
28,274,400
4
DESCO
10
329,700
19,262,511
58.42
51.80
17,078,460
5
Dhaka Bank Ltd.
10
1,234,800
26,313,698
21.31
19.70
24,325,560
6
Eastern Bank Ltd.
10
1,000,000
37,410,456
37.41
28.60
28,600,000
7
Jamuna Bank Ltd.
10
1,190,000
18,370,447
15.44
12.00
14,280,000
8
Mutual Trust Bank Ltd.
10
436,800
6,962,625
15.94
19.50
8,517,600
9
National Bank Ltd.
10
1,210,000
27,970,098
23.12
9.40
11,374,000
10
One Bank Ltd.
10
1,138,500
22,130,581
19.44
15.30
17,419,050
11
Uttara Bank Ltd.
10
968,000
37,009,980
38.23
22.70
297,031,983
21,973,600 228,779,003
Unquoted: 1
Central Depository Bangladesh Ltd.
2
Investment in SWIFT
3
328
Market Stabilization Fund
10
5,711,804
15,694,430
2.75
-
15,694,430
4,184,430
-
-
4,184,430
5,000,000
-
-
5,000,000
Sub Total
24,878,860
24,878,860
Grand Total
321,910,842
253,657,863
43,528,537
As at 31 December 2015
1,410,371
Vehicles
8,552,685,833
8,015,482,024
As at 31 December 2014
287,656,371
43,212,614
244,443,757
8,265,029,462
As at 31 December 2015
Sub-total
Software-ATM
Software-Core Banking
Software-Amortization
Sub-total
6,145,299
1,742,930
Office equipment and machinery
As at 31 December 2015
2,991,998
Furniture and fixtures
Off-shore
31,690,384
31,690,384
Leased Vehicles
293,160,312
Furniture and fixtures
As at 31 December 2015
249,631,775
7,934,033,467
1,805,129
321,433,375
1,440,363,793
Office equipment and machinery
ATM
As at 31 December 2015
Library books
Vehicles
Office equipment and machinery
818,405,134
1,649,581,248
Building
Furniture and fixtures
3,702,444,788
Taka
Opening balance as on 01.01.15
Land
Particulars
as at 31 December 2015
541,008,697
240,329,738
8,212,305
-
8,212,305
232,117,433
-
-
-
-
-
-
26,440,226
949,178
25,491,048
205,677,207
-
1,226,164
78,525,979
50,349,523
71,575,541
4,000,000
Taka
-
-
3,804,889
3,132,211
-
-
-
3,132,211
-
-
-
-
-
-
-
-
-
3,132,211
-
-
1,803,330
1,328,881
Taka
Disposals/ Additions adjustments during the year during the year
COST
Schedule of fixed assets of the Bank
8,552,685,833
8,789,883,360
295,868,676
43,212,614
252,656,062
8,494,014,684
6,145,299
1,410,371
1,742,930
2,991,998
31,690,384
31,690,384
319,600,538
44,477,715
275,122,823
8,136,578,463
1,805,129
322,659,539
1,517,086,442
867,425,776
1,721,156,789
3,706,444,788
Taka
Total balance as at 31.12.15
-
1,608,762,363
1,939,999,015
183,777,321
20,721,750
163,055,571
1,756,221,695
3,852,398
993,981
1,266,809
1,591,607
31,315,106
31,315,106
164,021,131
12,682,809
151,338,323
1,557,033,059
1,323,943
221,730,526
883,377,950
374,356,839
76,243,802
Taka
Opening balance as on 01.01.15
-
333,115,035
335,846,930
41,144,825
10,725,211
30,419,614
294,702,105
546,224.80
268,627.12
110,340.63
167,257.04
375,265
375,265
45,919,359
4,554,647
41,364,712
247,861,257
124,834
46,329,954
140,140,124
46,490,311
14,776,033
Taka
Charge for the year
-
-
-
1,448,777
268,060,480
1,022,011,962
419,961,255
91,019,835
Taka
Total balance as at 31.12.15
1,878,383
2,392,008
-
-
-
2,392,008
-
-
-
-
-
-
-
-
-
1,939,999,015
2,273,453,938
224,922,145
31,446,961
193,475,185
2,048,531,792
4,398,623
1,262,609
1,377,150
1,758,865
31,690,371
31,690,371
209,940,490
17,237,456
192,703,034
2,392,008 1,802,502,308
-
-
1,506,113
885,895
Taka
Disposals/ adjustments during the year
DEPRECIATION
6,612,686,818
6,516,429,422
70,946,531
11,765,653
59,180,878
6,445,482,891
1,746,676.05
147,762.70
365,779.59
1,233,133.76
13
13
109,660,048
27,240,259
82,419,789
6,334,076,154
356,353
54,599,059
495,074,481
447,464,521
1,630,136,954
3,706,444,788
Taka
Net book value as at 31.12.15
Annexure-C
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
329
330
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total
2002-2003
-
1995 to 2000
2001
Assessment year
Accounting year
17,435,551,971
713,000,000
1,180,000,000
1,616,000,000
2,449,800,000
2,866,502,255
2,285,000,000
1,735,000,000
1,012,449,724
1,015,000,000
592,362,815
557,500,000
482,287,856
348,903,919
312,590,120
268,743,630
3,317,922,403
-
-
-
-
-
-
-
1,076,933,945
481,412,744
346,638,537
482,287,856
348,903,919
312,590,120
268,743,630
411,652
Taka
Taka
411,652
Tax as per assessment order
Tax provision as per accounts
as at 31 December 2015
13,413,888,366
-
866,864,811
1,354,221,954
1,000,000,000
2,193,417,798
2,033,288,558
1,432,194,785
915,627,471
1,019,804,475
737,606,389
470,158,263
438,405,004
342,757,186
337,138,495
247,455,962
24,947,215
Taka
Tax paid
Statement of tax position of the Bank
-
-
-
-
-
-
-
-
(259,877,589)
-
-
-
-
(61,933,945)
110,950,071
210,861,463
Taka
Appealed against some disallowances made by the DCT before the Appellate Tribunal.
Appealed against some disallowances made by the DCT before the Appellate Tribunal.
198,449,090
- Submission of Tax return is yet not due.
Return filed but the assessment is yet to completed.
- Return filed but the assessment is yet to completed.
- Return filed but the assessment is yet to completed.
Return filed but the assessment is yet to complete Excess (102,313,148) payment of Tk. 102,313,148 in earlier years will be adjusted against the tax provision of 2011.
-
-
Appealed against some disallowances made by the DCT before the Appellate Tribunal.
(57,129,470) Completed
256,193,645 Completed
123,519,726 Completed
(43,882,852) Completed
(6,146,733) Completed
24,548,375 Completed
-
Present status
Assessment year 1999-2000 is final but the Tax Authority referred it to High Court Division.
(21,287,668) Completed
24,947,215
Taka
of tax paid
of provision
Excess/ (shortage)
Excess/ (shortage)
Annexure-D
Fi na n c i a l S t a t e m en ts PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Name of Directors and their interest in different entities of the Bank Annexure-E Sl no.
Name of Directors
Status with PBL Entities where they have interest East Coast Shipping Lines Ltd.
25.00
EC Distribution Ltd.
40.00
PFI Securities Limited (Corporate Interest)
1
Mr. Azam J Chowdhury
Chairman
2
Vice Chairman
5.13
East Coast Trading (Pvt.) Ltd.
20.00
EC Securities Ltd.
89.20
EC Holdings Limited
85.00
EC Bulk Carriers Ltd.
20.00
MJL Bangladesh Ltd. (Corporate Interest)
52.07
Bangladesh Trade Syndicate Ltd.
65.00
Green Delta Insurance Co. Ltd.
0.83
Omera Fuels Ltd. (Corporate Interest)
75.00
Nordic Woods Ltd. (Corporate Interest)
45.00
ASP Omera Crew Management Ltd. (Corporate Interest)
50.00
Union Capital Limited (Corporate Interest)
Khandker Mohammad Khaled
% of Interest
7.22
Consolidated Tea & Plantation Limited (Corporate Interest)
11.25
Baraoora (Sylhet) Tea Company Limited (Corporate Interest)
11.25
The Consolidated Tea & Lands Co. (BD) Limited (Corporate Interest)
11.25
Prime Finance & Investment Ltd. (Corporate Interest)
8.94
Greenland Engineers & Tractors Company Limited
42.00
Machinery & Equipment Trading Company Limited
42.00
GETCO Limited
37.50
GETCO Trading Limited
51.00
GETCO Agro Vision Limited
27.50
GETCO Telecommunications Limited
60.00
GETCO Online Limited
48.00
GETCO Business Solutions Limited
34.00
GETCO Agri-Technologies Limited
50.00
Khaled Textile Mills Limited
55.00
Fareast Stocks & Bonds Limited
10.00
Fareast Islami Life Insurance Co. Ltd. Fareast Finance & Investment Limited
1.01 4.90
331
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Name of Directors and their interest in different entities of the Bank Annexure-E Sl no.
Name of Directors
Status with PBL Entities where they have interest Fareast Finance & Investment Limited
1.77
Fareast Stocks & Bonds Limited
7.24
Fareast Islami Life Insurance Co. Ltd.
3
4
5
Mr. M. A. Khaleque
Quazi Sirazul Islam
Mrs. Nasim Anwar Hossain
Vice Chairman
7
332
Mr. Md. Nader Khan
Mr. Md. Shahadat Hossain
0.22
Maksons Bangladesh Limited
50.00
Maksons Associates Limited
50.00
Maksons Bay Limited
50.00
Prime Property Holdings Limited
20.00
PFI Properties Limited
10.00
Prime Prudential Fund Limited
10.00
Prime Financial Securities Limited
20.00
Prime Shops & Loves Limited
40.00
Primeasia Textile Limited
10.00
GETCO Limited
37.50
GETCO Agro Vision Limited
27.50
GETCO Elevator Company Limited
30.00
GETCO Agri Technologies
40.00
GETCO Online Limited
40.00
HRC Technologies Limited
40.00
Bangladesh Institute of Professional Development Limited
35.00
Amin Jewelers Limited
50.00
City Hospital Limited
30.00
Bangla Gold (Pvt.) Limited
15.00
Ducaty Apparels Limited
33.00
Director
Director
Prime Cement Ltd.
2.86
Lubricants Asia Ltd.
14.00
Bengal Tiger Cement Industries Ltd.
6
% of Interest
2.36
Pragati Corporation
100.00
Pedrollo NK Limited
40.00
PNL Water Management Limited
35.00
Polyexprint Limited
30.00
PNL Holdings Limited
20.00
Halda Valley Tea Company Limited
15.00
Director Pedrollo Dairy & Horticulture Limited
2.35
Polyexlaminate Limited
2.00
Polytape Limited
1.43
Hill Plantation Ltd.
1.00
Cider Education Services Ltd.
19.21
Halda Fisheries Ltd.
5.00
VIP Shahadat Cold Storage
50.00
VIP Shahadat Poultry & Hatchery
50.00
Director
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Name of Directors and their interest in different entities of the Bank Annexure-E Sl no.
8
Name of Directors
Mr. Md. Shirajul Islam Mollah
Status with PBL Entities where they have interest
Director
China - Bangla Ceramic Industries Ltd.
43.44
Bengal Tiger Cement Industries Ltd.
12.00
Bajnabo Textiles Mills Ltd.
50.00
Trustee Securities Ltd.
22.00
United Shipping Lines Ltd.
40.00
SR Telecom Ltd
45.00
Dhaka-Foshan Mould Company Ltd.
15.00
Parkensine Products Ltd.
40.00
East Coast Trading (Pvt.) Ltd.
20.00
EC Securities Ltd. 9
Mrs. Marina Yasmin Chowdhury
Mr. Mafiz Ahmed Bhuiyan
EC Bulk Carriers Ltd.
20.00
East Coast Shipping Lines Ltd.
20.00
EC Holdings Limited
15.00
12
Mrs. Salma Huq
Mr. Nafis Sikder
5.00
EC Distribution Ltd
40.00
Shepherd World Trade Limited
50.00
Shepherd Consultant & Management Ltd
19.00
Director GQ Ball Pen Industries Limited
11
3.60
Director
EC Aviation Ltd.
10
% of Interest
Director
9.92
GQ Industries Ltd. (PP Woven Bag)
33.40
Maladesh International (Pvt.) Ltd. (Mosquito Coil)
29.70
GQ Foods Limited
26.66
GQ Enterprise Limited
68.81
Marina Apparels Ltd.
99.00
Nafa Apparels Ltd.
99.00
Ayesha Clothing Co. Ltd.
99.00
Ayesha Washing Limited
99.00
Ayesha Fashion Limited
99.00
Safaa Sweaters Ltd
99.00
Aswad Composite Mills Limited
95.00
Cortz Apparels Limited
99.00
K.M. Apparels (Pvt.) Ltd.
99.00
Hamza Clothing Ltd.
99.00
Hamza Trims Ltd.
99.00
Modern Needlecraft Ltd.
99.00
Palmal Garments Ltd.
43.75
Palmal Garments Hosiery Ltd.
43.75
Palmal Logistics
51.00
Palmal Packaging Ltd.
10.00
Director
333
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Name of Directors and their interest in different entities of the Bank Annexure-E Sl no.
Name of Directors
Status with PBL Entities where they have interest Prima Enterprise
13
Mr. Imran Khan
Director
15
16
334
Mr. Waheed Murad Jamil (Representative of Mawsons Limited)
Mr. Tarique Ekramul Haque
Mr. Mohammad Mushtaque Ahmed Tanvir (Representative of Uniglory Cycle Industries Ltd.)
100.00
PNL Holdings Limited
20.00
Polyexprint Limited
15.00
Halda Valley Tea Co. Limited
15.00
PNL Water Management Limited
15.00
Pedrollo NK Limited
10.00
Pedrollo Dairy & Horticulture Limited
2.35
Polyexlaminate Limited
2.00
Hill Plantation Ltd.
7.00
Halda Fisheries Ltd.
5.00
Polytape Limited
14
% of Interest
1.43
Everest Homes Limited
20.00
The Everest Trading Limited
25.00
Rajshahi Chemical Industry Limited
25.00
Neon Consumers Products Limited
35.00
Bangla Trac Limited
49.00
Bangla Trac Communication Limited
50.00
Acorn Infrastructure Services Limited
14.50
Director
Director
B-Trac Engineering Limited
40.00
Bangla Trac Miaki Green Power Limited
50.00
Bangla Trac Miaki VAS Limited
50.00
Prime Islami Securities Limited
10.00
Prime Life Insurance Limited
3.64
PFI Securities Limited
5.38
Asian Gate Ltd
20.00
Acorn Limited
25.00
Uniglory Cycle Components Ltd.
14.00
Antiques Graphics Limited
16.67
Uniglory Paper & Packaging Limited
15.00
Uniglory Packaging Industries Limited
10.00
Uniglory Accessories Limited
12.50
Chhattori Limited
8.00
Director
17
Mr. Shamsuddin Ahmad, Ph.D
Independent Director
N/A
N/A
18
Dr. G. M. Khurshid Alam
Independent Director
N/A
N/A
19
Mr. M Farhad Hussain FCA
Independent Director
Bay Asset Management Company Limited
25.00
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Distribution of profit under Islamic Banking operation Annexure-F Prime Bank Limited is operating 05 (five) Islamic Banking branches based on Islamic Shariah, which absolutely prohibits receipts and payments of interest in any form. The operation of these 05 (five) branches are totally different from other conventional banking branches as they operate on the basis of profit sharing arrangement.
Fixation of final profit rate for the year 2015 Provisional profit are applied to the different types of depositors at the rates to be decided by the Bank from time to time taking into consideration of the industry trend and that of the rates of other Islamic Banks in Bangladesh. Final rates of profit are declared annually as at 31 December in every year on the basis of income earned from different investments and other business by individual branches and distributed as per weightage of the different deposit products. For the year ended 31 December 2015, 70% of total investment income shall be distributed to the different types of Mudaraba depositors (except no cost fund) according to the weightage. The remaining 30% of the investment income will be retained by the Bank as Management fee (25%) and Investment loss Off-setting Reserve (5%). Final Profit rate for the year 2015 is given below: Deposit types
Weightage
Final rate of profit for the year 2015(%)
Mudaraba Saving Deposits
0.75
5.69
Mudaraba Short Notice Deposits
0.52
3.95
36 Months
1.00
7.59
24 Months
0.98
7.44
12 Months
0.96
7.28
06 Months
0.92
6.98
03 Months
0.88
6.68
01 Month
0.84
6.37
Mudaraba Education Savings Scheme
1.20
9.11
Mudaraba Monthly Contributory Savings Scheme
1.05
7.97
Mudaraba Monthly Benefit Deposit Scheme
1.02
7.74
Mudaraba Double Benefit Scheme
1.02
7.74
Mudaraba Hajj Savings Scheme
1.20
9.11
Mudaraba Lakhpoti Deposit Scheme
1.05
7.97
Mudaraba Lakhpoti Deposit Scheme >3
1.05
7.97
Mudaraba Millionaire Deposit Scheme
1.05
7.97
Mudaraba House Building Deposit Scheme
1.05
7.97
Mudaraba My First Account
0.75
5.69
Mudaraba Sukonna Deposit
0.75
5.69
Mudaraba Nobagoto Deposit
1.05
7.97
Mudaraba 150% Deposit Scheme
1.01
7.66
Mudaraba Laksma Puran Saving Scheme
1.05
7.97
Mudaraba Brighter Tomorrow
0.96
7.28
Mudaraba Cash Waqf (Fixed)
1.20
9.11
Mudaraba Waqf (Installment)
1.20
9.11
Mudaraba Term Deposits
335
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Balance Sheet as at 31 December 2015 Annexure-G Particulars
Notes
Amount in Taka 2015
2014
62,368,762
53,954,854
-
-
62,368,762
53,954,854
222,609
212,804
PROPERTY AND ASSETS Cash in hand
1
Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) Balance with other banks and financial institutions
2
In Bangladesh Outside Bangladesh
-
-
222,609
212,804
-
-
Government
-
-
Others
-
-
-
-
Placement with banks & other financial institutions
3
Investments in share & securities
4
Investments General investments etc
5
11,054,106,956
10,728,159,623
Bills purchased and discounted
6
161,313,964
173,641,364
11,215,420,920
10,901,800,988
Fixed assets including premises
7
23,437,618
26,177,402
Other assets
8
3,284,134,098
4,997,176,910
Non - banking assets Total assets
-
-
14,585,584,007
15,979,322,958
-
-
1,959,720,511
1,659,771,304
10,318,656,867
11,562,059,375
LIABILITIES AND CAPITAL Liabilities Placements from other banks, financial institutions and agents
9
Deposits and other accounts
10
Mudaraba savings deposits Mudaraba term deposits Other mudaraba deposits Al-wadeeah current deposits and other deposits accounts Bills payable
-
-
1,969,274,244
2,003,415,525
46,801,853
67,278,669
14,294,453,476
15,292,524,873
291,130,531
686,798,086
14,585,584,007
15,979,322,958
Paid up capital
-
-
Statutory reserve
-
-
Revaluation gain / (loss) on investments
-
-
Revaluation reserve
-
-
Other reserve
-
-
Surplus in profit and loss account / Retained earnings
-
-
Total Shareholders' equity
-
-
14,585,584,007
15,979,322,958
Other liabilities Total liabilities
11
Capital / Shareholders' equity
Total liabilities and Shareholders' equity
336
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Balance Sheet as at 31 December 2015
Particulars
Notes
Amount in Taka 2015
2014
OFF- BALANCE SHEET EXPOSURE Contingent liabilities
12
Acceptances and endorsements
12.1
2,210,092,972
2,989,218,036
Letters of guarantee
12.2
534,217,055
732,937,880
Irrevocable letters of credit
12.3
731,900,042
1,962,011,752
Bills for collection
12.4
163,937,106
128,821,639
-
-
3,640,147,175
5,812,989,307
Documentary credits and short term trade -related transactions
-
-
Forward assets purchased and forward deposits placed
-
-
Undrawn note issuance and revolving underwriting facilities
-
-
Undrawn formal standby facilities , credit lines and other commitments
-
-
Other commitments
-
-
-
-
3,640,147,175
5,812,989,307
Other contingent liabilities
Other commitments
Total Off-Balance Sheet exposure including contingent liabilities
337
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Profit and Loss Account for the year ended 31 December 2015 Annexure-G(I) Amount in Taka Particulars
Notes 2015
Investment income
13
1,776,975,724
1,831,292,356
Profit paid on deposits
14
(991,775,240)
(1,142,806,401)
785,200,484
688,485,955
-
-
Net investment income Income from investment in shares / securities Commission, exchange and brokerage
15
77,848,578
87,939,439
Other operating income
16
33,362,048
38,622,161
896,411,109
815,047,554
Total operating income (A)
Salaries and allowances
17
109,136,271
99,872,777
Rent, taxes, insurance, electricity, etc.
18
19,475,923
13,898,766
Legal expenses
19
3,644,149
672,768
Postage, stamp, telecommunication, etc.
20
7,216,603
5,542,033
Stationery, printing, advertisements, etc.
21
4,995,066
4,780,498
Chief Executive's salary and fees
-
-
Directors' fees & expenses
-
-
Shariah supervisory committee's fees and expenses
-
-
Auditors' fees
-
-
Charges on investment losses
22
-
-
Depreciation and repair of Bank's assets
23
8,407,378
8,011,888
-
-
17,804,621
17,343,909
Total operating expenses (B)
170,680,011
150,122,640
Profit / (loss) before provision (C=A-B)
725,731,098
664,924,914
Specific provision
-
-
General provision
-
-
Provision for off-balance sheet exposures
-
-
-
-
Provision for diminution in value of investments
-
-
Other provisions
-
-
Total provision (D)
-
-
725,731,098
664,924,914
Zakat expenses Other expenses
Provision for investments
Total profit / (loss) before taxes (C-D)
338
2014
24
25
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Cash Flow Statement for the year ended 31 December 2015
Amount in Taka Particulars 2015
2014
A) Cash flows from operating activities Investment income receipts in cash Profit paid on deposits Dividend receipts Fees and commission receipts in cash Recoveries of investments previously written off Cash payments to employees Cash payments to suppliers Income taxes paid Receipts from other operating activities Payments for other operating activities Cash generated from operating activities before changes in operating assets and liabilities Increase / (decrease) in operating assets and liabilities Statutory deposits Purchase of trading securities (Treasury bills) Investment to other banks Investment to customers Other assets Deposits from other banks Deposits from customers Other liabilities account of customers Trading liabilities Other liabilities Net cash from operating activities
1,474,522,917 (1,017,508,450) 77,848,578 (109,136,271) (4,995,066) 33,362,048 (50,931,139)
1,469,081,309 (1,213,317,191) 87,939,439 (99,872,777) (4,780,498) 38,622,161 (40,053,106)
403,162,615
237,619,336
(313,619,932) 1,315,497,731 (515,020,643) (483,050,754) (395,667,554) (391,861,152) 11,301,463
1,709,791,590 (1,815,484,515) (941,758,315) 288,864,420 493,158,629 (265,428,192) (27,808,856)
B) Cash flows from investing activities Debentures
-
-
Proceeds from sale of securities
-
-
Payments for purchases of securities
-
-
(2,877,751)
(2,263,307)
Payment against lease obligation
-
-
Proceeds from sale of property, plant and equipment
-
-
(2,877,751)
(2,263,307)
Dividend paid
-
-
Net Cash from financing activities
-
-
8,423,712
(30,072,164)
-
-
Purchase of property, plant and equipment
Net cash used in investing activities C) Cash flows from financing activities
D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) E) Effects of exchange rate changes on cash and cash equivalents F) Cash and cash equivalents at beginning of the year G) Cash and cash equivalents at end of the year (D+E+F)
54,167,658
84,239,822
62,591,371
54,167,658
62,368,762
53,954,854
Cash and cash equivalents at end of the year Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) Balance with other banks and financial institutions
-
-
222,609
212,804
Placement with banks & other financial institutions
-
-
Prize bonds
-
-
62,591,371
54,167,658
339
340 -
Changes in accounting policy
Restated balance
Surplus / deficit on account of revaluation of properties
Adjustment of last year revaluation gain on investments
Surplus / deficit on account of revaluation of investments
Currency translation differences
Net gains and losses not recognized in the income statement
Net profit for the year
Dividends (Bonus shares)
Cash dividend
Issue of share capital
Appropriation made during the year
Balance as at 31 December 2015
Balance as at 31 December 2014
Taka
Taka
Balance as at 1 January 2015
Particulars
Statutory reserve
Paid-up Capital
Statement of Changes in Equity for the year ended 31 December 2015
Prime Bank Limited-Islamic Branches
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Taka
Revaluation reserve
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Taka
Revaluation gain / loss on investments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Taka
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Retained earnings
Taka
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fi na n c i a l S t a t e m en ts PRIME BANK A N N UA L R E P O RT 2 0 1 5
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Please see PBL notes 1-2 Amount in Taka
1
2015
2014
61,540,270
53,288,075
Cash in hand i) In local currency ii) In foreign currency Sub-total (a)
828,492
666,779
62,368,762
53,954,854
Cash with Bangladesh Bank and its agents Balance with Bangladesh Bank
-
-
Balance with Sonali Bank (as agent of Bangladesh Bank)
-
-
Sub-total (b)
-
-
62,368,762
53,954,854
222,609
212,804
-
-
222,609
212,804
ICB Islamic Bank Ltd., Motijheel, Dhaka
13,529
14,334
ICB Islamic Bank Ltd, Sylhet
16,786
17,016
Social Islami Investment Bank Ltd. Dhaka
12,444
12,603
42,758
43,953
Grand total (a+b) Required CRR and SLR of Islamic Branches are maintained at Head Office 2
Balance with other banks and financial institutions In Bangladesh (note-2.1) Outside Bangladesh (note-2.2) 2.1 In Bangladesh Short-term deposit accounts
Savings accounts Al Arafah Islami Bank Ltd. Dhaka
69,882
64,622
Bank Al Falah Ltd. Dhaka
38,337
36,595
Social Islami Investment Bank Ltd. Dhaka 2.2 Outside Bangladesh (NOSTRO Accounts)
71,632
67,635
179,850
168,851
-
-
222,609
212,804
3
Placement with banks & other financial institutions
-
-
4
Investment in share & securities
-
-
5
Investments a) In Bangladesh Quard against TDR
141,091,254
1,257,444,178
Bai-Murabaha (cc pledge)
3,276,559,208
3,414,628,256
Bai-Muajjal (cc hypo)
5,058,745,037
2,954,267,553
405,817,617
506,105,518
Izara (note-5.2)
426,049,393
313,017,705
Bai-Salam (packing credit)
105,695,009
68,957,789
117,480,066
128,669,231
Retail investment
Staff investment Hire purchase b) Outside Bangladesh
1,522,669,372
2,085,069,394
11,054,106,956
10,728,159,623
-
-
11,054,106,956
10,728,159,623
144,890,992
169,042,792
Payable Inside Bangladesh Inland bills purchased Payable Outside Bangladesh Foreign bills purchased and discounted
16,422,972
4,598,573
161,313,964
173,641,364
11,215,420,920
10,901,800,988
341
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
5.1 Investments under the following broad categories Investments Bai-Murabaha / Bai-Muajjal Quard against TDR Bills purchased and discounted (note-6) 5.2 Izara Lease rental receivable within 1 year Lease rental receivable within 5 years Lease rental receivable after 5 years Total lease / Izara rental receivable Less: Unearned interest receivable Net lease / Izara finance 5.3 Investments on the basis of significant concentration including bills purchased and discounted. a) Investments to Directors of the Bank b) Investments to Chief Executive and other executives & officers c) Investments to customer groups: i) Commercial investment ii) Export financing iii) House building investment iv) Retail investment v) Small and medium enterprises vi) Special program investment vii) Staff investment viii) Industrial investments ix) Other investment
d)
Details of Industrial investments i) Agricultural industries ii) Textile industries iii) Food and allied industries iv) Pharmaceutical industries v) Leather, chemical, cosmetics, etc. vi) Tobacco industries vii) Cement and ceramic industries viii) Service Industries ix) Transport and communication industries x) Other industries including bills purchase and discounted
5.4 Investments -geographical location-wise Inside Bangladesh Urban Dhaka Division Chittagong Division Khulna Division Rajshahi Division Barisal Division Sylhet Division Rural Dhaka Division Chittagong Division Sylhet Division Outside Bangladesh
342
2,577,711,457 8,335,304,245 141,091,254 11,054,106,956 161,313,964 11,215,420,920
3,101,819,637 6,368,895,809 1,257,444,178 10,728,159,623 173,641,364 10,901,800,988
42,039,446 408,627,810 17,344,601 468,011,858 41,962,465 426,049,393
27,776,150 336,660,750 364,436,900 51,419,195 313,017,705
-
-
117,446,831
128,618,050
4,737,972,729 396,484,954 405,817,617 1,438,320,056 33,234 3,450,389,414 668,956,084 11,097,974,088 11,215,420,920
4,672,712,172 743,163,292 506,105,518 1,085,452,359 51,181 2,619,380,129 1,146,318,287 10,773,182,937 10,901,800,988
180,385,018 332,161,681 8,626,784 555,023,617 323,806,064 47,335,974 2,003,050,277 3,450,389,414
184,432,093 400,873,335 269,415,071 45,534,933 463,648,282 266,052,291 70,161,287 919,262,838 2,619,380,129
7,030,627,037 4,021,690,706 163,103,176 11,215,420,920
8,426,190,842 2,277,525,423 198,084,723 10,901,800,988
11,215,420,920
10,901,800,988
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
5.5 Details of pledged collaterals Collateral of movable / immovable assets
7,711,935,595
9,928,152,430
Local banks and financial institutions guarantee
356,598,908
-
Export documents
161,313,964
21,325,745
Fixed deposit receipts
156,242,132
173,523,432
FDR of other banks
21,000
-
Personal guarantee
154,923,490
169,372,616
2,674,385,832
609,426,764
11,215,420,920
10,901,800,988
Other securities
5.6 Particulars of investments i)
Investments considered good in respect of which the Bank is fully secured
7,793,638,604
10,209,504,628
ii)
Investments considered good against which the Bank holds no security other than the debtorsâ&#x20AC;&#x2122; personal guarantee
154,923,490
522,923,744
iii)
Investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors
3,266,858,826
169,372,616
iv)
Investments adversely classified; provision not maintained
-
-
11,215,420,920
10,901,800,988
v)
Investments due by directors or officers of the banking company or any of them either separately or jointly with any other persons
117,480,066
128,669,231
vi)
Investments due from companies or firms in which the directors of the Bank have interest as directors, partners or managing agents or in case of private companies, as members
-
-
117,480,066
128,669,231
viii) Maximum total amount of investments, including temporary investments granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in the case of private companies, as members
-
-
ix)
Due from banking companies
-
-
x)
Classified investments
vii)
xi)
Maximum total amount of investments, including temporary investment made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person.
a)
Classified investments on which profit has not been charged (note-5.7)
379,437,496
1,087,321,314
b)
Provision on classified investments (note-5.8)
153,603,370
277,275,672
c)
Provision kept against investments classified as bad debts
147,408,859
240,016,189
d)
Profit Suspense Account (note-11)
194,720,850
245,406,044
Opening Balance
-
-
Amount written off during the year
-
-
Cumulative amount of written off investments
-
-
Amount realised against investments previously written off
-
-
The amount of written off investments for which law suits have been filed
-
-
343
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015
2014
5.7 Classification of investments Unclassified Standard including staff investment
10,474,752,821
Special mention account (SMA)
9,478,542,574
361,230,602
335,937,100
10,835,983,423
9,814,479,674
Sub-standard
13,638,285
438,693,506
Doubtful
24,177,383
13,734,139
341,621,828
634,893,669
379,437,496
1,087,321,314
11,215,420,920
10,901,800,988
112,465,544
103,364,374
112,465,544
103,364,374
Classified
Bad / Loss
5.8 Particulars of required provision for investments
Status
Base
Rate
for provision
(%)
10,835,983,423
*Various
General Provision Investments (Including SMA)
*General provision is kept @ 1% on general investments and 2% on small enterprise financing and 5% on consumer financing. Specific provision Sub-standard Doubtful Bad / Loss
3,638,544
20
727,709
32,650,384
10,933,604
50
5,466,802
4,609,099
147,408,859
100
147,408,859
240,016,189
153,603,370
277,275,672
Required provision for investments
266,068,914
380,640,046
Provision maintained by Head Office
266,068,914
380,640,046
-
-
Excess / (short) provision at 31 December 2015
5.9 Particulars of required provision for Off-balance Sheet Exposures
Acceptances and endorsements
1%
2,210,092,972
22,100,930
29,892,180
534,217,055
5,342,171
7,329,379
Letter of credit
731,900,042
7,319,000
19,620,118
Required provision on Off-balance Sheet Exposures
34,762,101
56,841,677
Provision maintained by Head Office
34,762,101
56,841,677
-
-
144,890,992
169,042,792
Bills purchased and discounted Payable in Bangladesh Payable outside Bangladesh
344
Rate
Letter of guarantee
Excess / (short) provision at 31 December 2015
6
Base for provision
16,422,972
4,598,573
161,313,964
173,641,364
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 7
2014
Fixed assets including premises, furniture and fixtures Property, Plant & Equipment Land Building Furniture and fixtures Office equipment and machinery Vehicles Leased vehicles Library books ATM Hardware & equipment Furniture & fixture Interior decoration
Less: Accumulated depreciation Intangibles assets Software-core banking Software-ATM Cost of intangibles assets Less: Accumulated amortization Net book value at the end of the year 8
23,437,618 23,437,618
26,177,402 26,177,402
23,437,618
26,177,402
739,277 302,452,807 86,351 866,984 2,979,155,063 833,617 3,284,134,098
661,031 362,211,047 107,825 427,484 4,633,362,681 406,842 4,997,176,910
-
-
Borrowings from other banks, financial institutions and agents In Bangladesh Outside Bangladesh
10
12,225,463 12,130,788 1,490,445 329,340 1,367 26,177,402
Other assets Stationery and stamps Profit receivable Advance income tax Advance deposits and advance rent Branch adjustments account Migration account Suspense account Islamic transit account Sundry assets
9
11,474,685 11,268,643 693,196 1 1,094 23,437,618
Deposits and other accounts 140,593,614
655,614,256
14,153,859,862
14,636,910,616
14,294,453,476
15,292,524,873
Al-wadeeah current deposits
-
-
Bills payable
-
-
Mudaraba savings deposits
63,787,472
27,249,372
Mudaraba special notice deposits
76,806,142
628,364,885
Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b) 10.1 a) Deposits from Banks
Mudaraba fixed deposits
-
-
140,593,614
655,614,256
345
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 Sl No
Name of Bank
2014
Type of Account
1 Al Arafah Islami Bank Ltd
MSB
56,877,556
2 Bank Al-Falah
MSB
273,488
268,818
3 Social Islami Bank Ltd
MSB
18,383
2,512,403
4 Islami Bank Bangladesh Ltd
MSB
6,618,044
6,445,969
63,787,472
27,249,372
Sub Total
18,022,182
5 Exim Bank Ltd
MSND
40,727,536
67,033,845
6 ICB Islamic Bank Ltd
MSND
2,269,513
2,194,509
7 Social Islami Bank Ltd
MSND
-
6,659
8 Shahjalal Islami Bank Ltd
MSND
8,576,339
534,472,965
9 Modhumoti Bank Ltd
MSND
4,688
28,387
MSND
25,228,065
24,376,852
MSND
-
251,668
76,806,142
628,364,885
140,593,614
655,614,256
Al-wadeeah current deposits
598,807,329
595,937,800
Foreign currency deposits
176,267,508
426,891,705
10 Islami Bank Bangladesh Limited 11 Grameen Bank Sub Total Grand Total b) Customer Deposits i) Al wadeeah current deposits and other accounts
Security deposits Sundry deposits
123,869
242,619
1,194,075,539
980,343,401
1,969,274,244
2,003,415,525
45,589,877
66,031,502
ii) Bills payable Pay orders issued Pay slips issued
70,594
70,594
Demand draft payable
1,141,383
1,176,573
Foreign demand draft
-
-
T. T. payable
-
-
46,801,853
67,278,669
1,895,933,039
1,632,521,932
6,760,606,634
6,730,206,248
589,443,078
1,297,235,007
iii) Mudaraba savings deposits
iv) Mudaraba term deposits Mudaraba fixed deposits Mudaraba special notice deposits Non resident Taka deposits Mudaraba special scheme deposits
-
-
2,891,801,014
2,906,253,234
10,241,850,725
10,933,694,490
14,153,859,862
14,636,910,616
14,294,453,476
15,292,524,873
c) Deposits and other accounts Current deposits and other accounts Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.i)
346
-
-
1,969,274,244
2,003,415,525
1,969,274,244
2,003,415,525
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 Bills payable Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.ii) Savings bank / mudaraba savings deposits Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.iii) Term / Fixed deposits Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.iv)
11
2014
46,801,853 46,801,853
67,278,669 67,278,669
63,787,472 1,895,933,039 1,959,720,511
27,249,372 1,632,521,932 1,659,771,304
76,806,142 10,241,850,725 10,318,656,867 14,294,453,476
628,364,885 10,933,694,490 11,562,059,375 15,292,524,873
2,894,108 93,515,573 194,720,850 291,130,531
3,638,087 437,753,955 245,406,044 686,798,086
1,718,126,679 456,777,265 35,189,028 2,210,092,972 (837,835,711) 1,372,257,262
2,568,947,919 392,473,050 27,797,068 2,989,218,036 (474,974,398) 2,514,243,638
294,716,027 239,501,028 534,217,055 (31,847,490) 502,369,565
245,087,592 487,850,287 732,937,880 (25,095,372) 707,842,508
50,765,313 483,451,742 534,217,055 (31,847,490) 502,369,565
2,948,968 487,850,287 242,138,624 732,937,880 (25,095,372) 707,842,508
263,401,298 179,928,344 288,570,400 731,900,042 (107,612,199) 624,287,843
454,824,637 1,034,315,904 472,871,211 1,962,011,752 (226,951,596) 1,735,060,155
163,937,106 163,937,106 (7,081,504) 156,855,602
128,821,639 128,821,639 128,821,639
Other liabilities Expenditure and other payables Foreign currency held against EDF loan Obligation under finance lease Provision for unclassified investments Provision for classified investment Provision for off-balance sheet exposure Interest suspense account
12
Contingent liabilities
12.1 Acceptances and endorsements Back to back bills (Foreign) Back to back bills (Local) Back to back bills (EPZ) Less: Margin 12.2 Letters of guarantee Letters of guarantee (Local) Letters of guarantee (Foreign) Foreign counter guarantees Less: Margin Money for which the Bank is contingently liable in respect of guarantees given favoring: Directors or officers Government Banks and other financial institutions Others Less: Margin 12.3 Irrevocable Letters of Credit Letters of credit (Sight) Letters of credit (Deferred) Back to back L/C Bank's liabilities PAD Less: Margin 12.4 Bills for collection Outward bills for collection Inward local bills for collection Inward foreign bills for collection Less: Margin
347
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 13
2014
Investment income i) Income from general investment Quard against TDR
25,805,512
19,104,773
Bai-Murabaha (cc pledge)
477,765,200
555,673,087
Bai-Muajjal (cc hypo)
408,022,294
329,868,555
Retail investment loan
58,349,738
85,207,611
Izara
50,367,226
43,528,827
Bai-Salam (packing credit)
7,398,591
8,391,376
Staff loan
9,231,256
6,706,321
247,657,451
288,905,960
460,328,816
458,920,816
Hire purchase Other investments Inland bills purchased Sub-total (i)
32,034,310
34,985,030
1,776,960,394
1,831,292,356
15,330
-
ii) Profit on deposits with other Islamic banks In Bangladesh Out side Bangladesh Sub-total (ii) Grand total (i+ii) 14
-
1,776,975,724
1,831,292,356
76,307,479
67,193,263
Profit paid on deposits a)
Profit paid on deposits: Mudaraba savings deposits Mudaraba special notice deposits
64,417,968
87,327,014
Mudaraba term deposits
541,441,611
653,435,120
301,675,452
326,800,190
Mudaraba special scheme deposits Foreign currency deposits Others b)
15
15,330
-
-
7,932,730
8,050,814
991,775,240
1,142,806,401
Interest / Profit paid for borrowings: Bangladesh Bank/ Other Bank/ FI/Agents bank
-
-
Islamic Bond Fund
-
-
-
-
991,775,240
1,142,806,401
16,607,376
13,922,444
Commission, exchange and brokerage Commission on L/Cs-sight Commission on L/Cs-deferred
1,421,675
12,432,629
Commission on L/Cs-back to back
32,865,512
29,800,863
Commission on L/Gs
6,045,266
8,056,672
2,012,921
2,277,295
Commission on remittance Other commission Exchange gain (note - 15.1) - including gain from FC dealings Settlement fees / Brokerage
21,314
68,477
58,974,063
66,558,380
18,874,515
21,381,059
-
-
77,848,578
87,939,439
18,874,515
21,381,059
15.1 Exchange gain Exchange gain Less: Exchange loss
348
-
-
18,874,515
21,381,059
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 16
2014
Other operating income Rent recovered
488,487
554,038
Service and other charges
2,245,356
3,713,143
Retail Income
8,402,889
10,712,432
Income from ATM Service
3,321,456
3,370,950
Postage / telex / SWIFT/ fax recoveries
6,908,691
7,187,553
Gain on sale of assets Incidental charges Rebate from foreign Bank Foreign correspondent charges Miscellaneous earnings (note-16.1)
6,300
-
-
-
4,637,682
3,363,740
-
-
7,351,188
9,720,305
33,362,048
38,622,161
16.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank and sale proceeds of various items, etc. 17
Salaries and allowances Basic pay
57,641,170
50,304,090
37,280,932
36,803,933
Bonus
8,940,334
7,948,200
Bank's contribution to provident fund
5,273,835
4,816,554
109,136,271
99,872,777
14,583,064
9,314,099
Allowances
18
Rent, taxes, insurance, electricity, etc. Rent, rate and taxes
19
Lease rent
-
-
Insurance
968,069
705,852
Power and electricity
3,924,791
3,878,815
19,475,923
13,898,766
3,644,149
672,768
Legal expenses Legal expenses Other professional charges
20
-
-
3,644,149
672,768
Postage
1,592,473
1,744,177
Telegram, telex, fax and e-mail
1,964,275
1,727,157
Data communication
3,021,414
1,380,046
568,772
615,795
Postage, stamp, telecommunication, etc.
Telephone - office Telephone - residence 21
74,858
7,216,603
5,542,033
2,013,067 2,863,548 118,450 4,995,066
1,827,095 2,905,531 47,872 4,780,498
-
-
Stationery, printing and advertisements, etc. Office and security stationery Computer consumable stationery Publicity and advertisement
22
69,669
Charges on loan losses Loan -written off Interest waived
349
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Limited-Islamic Branches Notes to the Financial Statements for the year ended 31 December 2015 Amount in Taka 2015 23
Depreciation and repair of Bank's assets Depreciation Fixed assets Leased assets
5,617,535 5,617,535
5,416,258 5,416,258
41,535 215,653 1,576,277 607,089 349,289 2,789,843 8,407,378
30,755 554,240 1,257,230 604,380 149,025 2,595,630 8,011,888
7,305,677 1,391,741 4,817,417 47,522 2,980 8,299 717,147 595,307 653,860 13,978 393,500 295,050 353,438 450,000 758,706 17,804,621
6,171,642 1,636,534 4,594,857 36,428 1,377,300 792,450 599,056 12,048 295,650 561,658 279,880 399,000 587,407 17,343,909
Provision for bad and doubtful investments Provision for unclassified investments Provision for off-balance sheet exposure
-
-
Provision for other assets
-
-
-
-
Repairs Building Furniture and fixtures Office equipment Bank's vehicles Maintenance
24
Other expenses Security and cleaning Entertainment Car expenses Books, magazines and newspapers, etc. Medical expenses Bank charges and commission paid Loss on sale of assets Finance charge for lease assets Retail Expenses Traveling expenses Local conveyance, labour, etc. Business development Training and internship Remittance charges Laundry, cleaning and photographs, etc. Exgratia Miscellaneous expenses
25
350
2014
Provision for investments & off -balance sheet exposure
1,413,285,680
Net profit
** PBSL-Prime Bank Securities Limited
** PBIL- Prime Bank Investment Limited
* Prime Exchange Company Pte. Ltd Singapore, PBL Exchange (UK) Ltd & PBL Finance (Hong Kong) Ltd
229,096,758,561
(613,000,000)
Income tax including deferred tax
229,096,758,561
2,026,285,680
Profit / (loss) before tax
Segment liabilities
(3,154,406,426)
Provision against loans and advances, Others
Segment assets
11,176,444,983 (5,995,752,877)
Allocated expenses
11,176,444,983
Total income
Operating profit (Profit before unallocated expenses and tax)
(460,154,514)
11,636,599,497
Conventional Banking including OBU
1,177,691,535
(47,861,075) 250,231 (47,610,844) 1,177,691,535
(12,737,643)
(25,639,850)
(9,483,582)
(9,483,582)
(9,483,582)
PBSL
14,585,584,007
14,585,584,007
725,731,098
-
725,731,098
-
(170,680,011)
896,411,109
896,411,109
-
896,411,109
Islamic Banking
13,519,252,653 6,895,988,548
128,970,415 12,352,834 (6,547,113) 128,970,415 5,805,721 13,519,252,653 6,895,988,548
27,491,389
(50,402,692)
Less: Inter segmental income
Income
Particulars
II) Business Segment
230,163,089,915
Segment liabilities
(3,154,406,426)
Provision against loans and advances, others
-
(38,598,051)
(6,127,834,837)
2,623,046,363 (613,000,000) 2,010,046,363 230,163,089,915
167,568,466
Profit / (loss) before tax Income tax including deferred tax Net profit Segment assets
35,264,137
167,568,466
11,905,287,626
35,264,137
35,264,137
167,568,466
PBIL
11,905,287,626 11,905,287,626
PBL(Conventional Off Shore Banking & Islamic Banking) Units
Inside Bangladesh
Income Less: Inter-segmental income Total income Operating profit (Profit before unallocated expenses and tax) Allocated expenses
Particulars
I) Geographical Segment
of Prime Bank Limited as at 31 December 2015
Financial Reporting by Segment of the Group
40,133,668
1,718,373,874
1,718,373,874
75,789,950
(14,277,696)
90,067,646
-
(124,794,526)
214,862,171
214,862,171
-
214,862,171
(3,139,652,680)
(6,367,269,955)
12,313,498,818
12,313,498,819 12,313,498,818
Total
Amount in Taka
8,073,680,083
8,073,680,083
(41,805,123)
(6,296,882)
(35,508,241)
14,753,746
(76,042,542)
25,780,555
25,780,555
-
25,780,555
253,474,396,524
253,474,396,524
2,173,001,604
(633,574,578)
2,806,576,182
(3,139,652,680)
(6,367,269,955)
12,313,498,819
12,313,498,819
(460,154,514)
12,773,653,333
Total
Amount in Taka
1,621,076,246 253,474,396,524
85,000,891 2,806,576,182 (14,115,168) (633,574,578) 70,885,723 2,173,001,604 1,621,076,246 253,474,396,524
-
(38,270,994)
123,271,885
PBL Finance (Hong Kong) Ltd. 123,271,885 123,271,885
** Investment (PBIL+PBSL)
32,729,918
(651,301) (651,301) 32,729,918
-
(40,784,969)
* Remittance (Outside BD)
64,567,709
5,718,057 (162,528) 5,555,528 64,567,709
-
(45,738,562)
51,456,619
Prime Exchange PBL Exchange Pte. Ltd. (UK) Ltd. (Singapore) 51,456,619 40,133,668 51,456,619 40,133,668
Outside Bangladesh
Annexure-H
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
351
352 4,697,489,673 29,982,412,893
5,748,896,156 37,813,617,177
Investments (note-6a.1)
Loans and advances / investments (note-7a.1)
-
2,387,277,687 1,442,761,687
Other accounts (note-13a.6)
Provision and other liabilities
Director
12,393,987,571
Net liquidity gap (A-B):
Chairman
41,794,376,384
Total liabilities (B):
(9,186,759,145)
46,086,189,963
770,968,096
43,044,717,967
Deposits (note-13a.6)
37,948,456,630
36,899,430,818
-
2,089,199,664
2,270,503,900
54,188,363,955
-
3,978,355,649
15,880,380
Borrowings from Bangladesh Bank, other banks, financial institutions and agents (note-12a.4)
Liabilities:
Total assets (A):
Non banking assets
Other assets
Fixed assets including premises, furniture and fixtures
130,328,588
-
420,000,000
Money at call and short notice
65,164,294
-
1,957,683,985
Cash in hand (note-3a.4)
Balance with other banks and financial institutions (note-4a.3)
1-3 months
-
Up to 1 month
4,204,646,694
Assets:
Particulars
(Analysis of maturity of assets and liabilities) as at 31 December 2015
Liquidity Statement of the Bank
-
-
-
Director
6,433,952,018
42,695,933,583
5,767,245,254
-
35,358,682,329
1,570,006,000
49,129,885,601
-
908,928,299
162,910,736
41,061,785,234
6,996,261,332
3-12 months
-
-
-
4,170,357,861
58,384,601,242
1,222,300,509
-
51,576,491,305
5,585,809,429
62,554,959,103
-
1,197,462,919
2,378,496,739
41,268,199,563
17,710,799,882
1-5 years
12,603,493,160
36,785,099,748
11,275,624,910
-
24,509,474,838
1,000,000,000
49,388,592,908
220,500,640
2,814,211,520
3,779,529,065
1,738,519,624
27,579,414,620
-
-
13,256,417,440
Above 5 years
Annexure-I
Managing Director
26,415,031,465
225,746,200,921
20,478,900,456
2,387,277,687
192,437,823,069
10,442,199,709
252,161,232,386
220,500,640
10,988,158,051
6,516,429,422
151,864,534,491
62,732,861,663
420,000,000
1,957,683,985
17,461,064,134
Total
Fi na n c i a l S t a t e m en ts PRIME BANK A N N UA L R E P O RT 2 0 1 5
420,000,000 6,180,937,924
Money at call and short notice
Investments
-
2,387,277,687 1,442,761,687
Other accounts
Provision and other liabilities 41,792,104,757 14,010,882,893
Total liabilities (B):
Net liquidity gap (A-B):
(7,331,016,136)
46,085,615,828
770,968,096
43,044,143,832
Deposits
37,946,185,003
38,754,599,692
-
2,089,199,664
130,826,359
31,034,720,713
2,270,503,900
55,802,987,651
-
3,978,355,648
65,413,180
-
-
5,499,852,956
1-3 months
15,880,380
Borrowings from Bangladesh Bank, other banks, financial institutions and agents
Liabilities:
Total assets (A):
Non banking assets
Other assets
Fixed assets including premises, furniture and fixtures
38,886,072,607
2,011,104,968
Balance with other banks and financial institutions
Loans and advances / investments
4,261,103,324
Up to 1 month
Cash in hand
Assets:
Particulars
(Analysis of maturity of assets and liabilities) as at 31 December 2015
Consolidated Liquidity Statement
-
-
6,084,414,875
43,927,923,460
6,694,851,270
-
35,355,796,263
1,877,275,927
50,012,338,335
-
908,928,299
163,532,949
41,943,615,756
6,996,261,331
3-12 months
-
-
3,181,670,566
58,382,372,854
1,222,300,509
-
51,574,262,916
5,585,809,429
61,564,043,420
-
197,462,919
2,387,581,056
41,268,199,563
17,710,799,882
1-5 years
10,557,919,750
36,782,507,676
11,275,624,678
-
24,506,882,999
1,000,000,000
47,340,427,427
220,500,640
87,610,684
3,793,964,417
1,738,519,624
28,243,414,621
-
-
13,256,417,440
Above 5 years
26,503,871,948
226,970,524,575
21,406,506,239
2,387,277,687
192,427,271,013
10,749,469,636
253,474,396,524
220,500,640
7,261,557,214
6,541,317,961
154,871,128,263
64,631,266,714
420,000,000
2,011,104,968
17,517,520,764
Total
Annexure-I (1)
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
353
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Highlights of The Bank Annexure-J (Taka in million) Sl. # Particulars
354
2015
2014
1
Paid-up capital
10,293.49
10,293.49
2
Total capital (Consolidated)
29,301.84
27,423.70
3
Total capital (Solo Basis)
29,282.83
27,312.77
4
Capital surplus / (deficit) (Consolidated)
6,217.35
5,791.27
5
Capital surplus / (deficit) (Solo Basis)
6,298.54
5,823.59
6
Total assets
252,161.23
254,912.20
7
Total deposits
194,825.10
204,837.73
8
Total loans and advances / investments
151,864.53
147,366.65
9
Total contingent liabilities and commitments
115,687.19
118,111.17
10
Credit deposit ratio
77.95%
71.94%
11
Percentage of classified loans / investments against total loans and advances / investments
7.82%
7.61%
12
Profit after tax and provision
2,139.02
2,392.90
13
Amount of classified loans / investments during the year
11,882.80
11,214.64
14
Provisions kept against classified loans / investments
5,326.60
4,165.30
15
Provision surplus / (deficit) against classified loans / investments
11.19
23.78
16
Cost of deposit
6.64%
7.36%
17
Interest earning assets
216,975.08
221,521.17
18
Non-interest earning assets
35,186.15
33,391.03
19
Return on investment (ROI)
11.80%
9.56%
20
Return on assets (ROA)
0.84%
0.96%
21
Income from investment
7,988.73
6,194.36
22
Earnings per share (Taka)
2.08
2.32
23
Net income per share (Taka)
2.08
2.32
24
Price earning ratio (times)
8.71
8.43
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
ANNEXURE-K
OFF-SHORE BANKING UNITS
355
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Off-shore Banking Units Balance Sheet as at 31 December 2015 Particulars
Notes
PROPERTY AND ASSETS Cash In hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies)
2015 USD
2014 Taka
Taka
-
-
-
3
1,562,362 1,562,362
122,645,890 122,645,890
288,300,173 288,300,173
4 5
69,109,479 90,331,604 159,441,083 26,585 11,189,091 172,219,121
5,425,114,834 7,091,057,982 12,516,172,816 2,086,964 878,346,982 13,519,252,653
6,004,418,487 2,627,771,777 8,632,190,264 2,618,535 72,890,705 8,995,999,676
8
167,232,000
13,127,762,170
8,638,875,435
9
2,236,381 2,236,381
175,556,549 175,556,549
164,144,402 164,144,402
10
2,750,740 172,219,121
215,933,935 13,519,252,653
192,979,839 8,995,999,676
172,219,121
13,519,252,653
8,995,999,676
227,296 6,399,060 9,291,536 15,917,892
17,842,785 502,328,163 729,388,353 1,249,559,302
17,717,568 442,888,358 753,590,824 1,214,196,750
Other commitments Documentary credits and short term trade -related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities , credit lines and other commitments Liabilities against forward purchase and sale Other commitments
-
Total Off-Balance Sheet exposures including contingent liabilities
15,917,892
1,249,559,302
1,214,196,750
Balance with other banks and financial institutions In Bangladesh Outside Bangladesh Loans and advances Loans, cash credits, overdrafts, etc. Bills purchased and discounted Fixed assets including premises, furniture and fixtures Other assets Non - banking assets Total assets LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents Deposits and other accounts Current deposits Bills payable Savings bank deposits Term deposits Bearer certificate of deposit Other liabilities Total liabilities Capital / Shareholders' equity Paid up capital Statutory reserve Foreign currency gain Other reserve Deficit in profit and loss account / Retained earnings Total Shareholders' equity Total liabilities and Shareholders' equity
6 7
OFF- BALANCE SHEET EXPOSURES Contingent liabilities Acceptances and endorsements Letters of guarantee Irrevocable letters of credit Bills for collection Other contingent liabilities
356
11
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Off-shore Banking Units Profit and Loss Account for the year ended 31 December 2015 Particulars
Notes
2015 USD
2014 Taka
Taka
Interest income
12
5,978,121
465,998,106
356,708,919
Interest paid on deposits, borrowings, etc.
13
(4,403,985)
(343,293,295)
(230,076,343)
1,574,136
122,704,811
126,632,576
Net interest Commission, exchange, brokerage, etc.
14
224,122
17,470,430
18,233,143
Other operating income
15
351,418
27,393,225
10,668,874
2,149,675
167,568,466
155,534,593
Total operating income (A)
Salaries and allowances
16
155,381
12,112,017
10,289,648
Rent, taxes, insurance, electricity, etc.
17
18,411
1,435,141
824,702
10,792
841,262
29,406
Legal expenses Postage, stamp, telecommunication, etc.
18
2,713
211,485
119,938
Stationery, printing, advertisements, etc.
19
5,804
452,437
245,759
-
-
-
Auditors' fees Depreciation and repair of Bank's assets
20
7,394
576,384
646,173
Other expenses
21
294,665
22,969,325
11,040,294
495,160
38,598,051
23,195,920
1,654,515
128,970,415
132,338,673
Specific provision
-
-
-
General provision
-
-
-
-
-
-
Provision for diminution in value of investments
-
-
-
Other provision
-
-
-
Total provision (D)
-
-
-
1,654,515
128,970,415
132,338,673
Current tax
-
-
-
Deferred tax
-
-
-
-
-
-
1,654,515
128,970,415
132,338,673
Total operating expenses (B) Profit / (loss) before provision (C=A-B) Provision for loans and advances / investments
Total profit / (loss) before taxes (C-D) Provision for taxation
Net profit / (loss) after taxation
357
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Off-shore Banking Units Cash Flow Statement for the year ended 31 December 2015 Particulars
2015 USD
2014 Taka
Taka
A) Cash flows from operating activities Interest receipts in cash Interest payments Fees and commission receipts in cash
5,978,121
465,998,106
356,708,919
(4,403,985)
(343,293,295)
(230,076,343)
224,122
17,470,430
18,233,143
Cash payments to employees
(155,381)
(12,112,017)
(10,289,648)
Cash payments to suppliers
(33,587)
(2,618,160)
(1,528,790)
Receipts from other operating activities
351,418
27,393,225
10,668,874
(299,185)
(23,321,649)
(10,780,204)
1,661,522
129,516,640
132,935,951
-
-
-
Loans and advances to customers
(48,700,137)
(3,822,975,365)
(2,566,823,592)
Other assets
(10,253,988)
(804,941,129)
(67,257,721)
-
-
-
Payments for other operating activities Cash generated from operating activities before changes in operating assets and liabilities Increase / (decrease) in operating assets and liabilities Loans and advances to other banks
Deposits from other banks / borrowings Deposits from customers Other liabilities
130,599
10,252,072
70,150,809
(1,379,481)
(108,289,643)
(78,133,658)
(60,203,006) Net cash used in operating activities
(58,541,484)
(4,725,954,066)
(2,642,064,161)
(4,596,437,426)
(2,509,128,210)
(118,551)
B) Cash flows from investing activities Purchase / sale of property, plant and equipment
-
-
Proceeds from sale of property, plant and equipment
-
-
-
Net cash used in investing activities
-
-
(118,551)
56,405,291
4,427,832,300
2,448,421,444
56,405,291
4,427,832,300
2,448,421,444
(2,136,193)
(168,605,125)
(60,825,317)
-
2,950,843
1,466,944
C) Cash flows from financing activities Borrowing from Prime Bank Limited, Other Bank and Bangladesh Bank Net cash from financing activities D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) E) Effects of exchange rate changes on cash and cash equivalents F) Cash and cash equivalents at beginning of the year
3,698,555
288,300,173
347,658,546
G) Cash and cash equivalents at end of the year (D+E+F)
1,562,362
122,645,890
288,300,173
Cash in hand (including foreign currencies)
-
-
-
Balance with Bangladesh Bank and its agent bank (s)
-
-
-
1,562,362
122,645,890
288,300,173
1,562,362
122,645,890
288,300,173
Cash and cash equivalents at end of the year
(including foreign currencies) Balance with other banks and financial institutions
358
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015
1.1
Status of the units Off-shore Banking Units of Prime Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank obtained the Off-shore Banking Unit permission vide letter no. BRPD (P) 744 (84)/2001-868 dated 19 March 2001. The Bank commenced the operation of its Off-shore Banking Unit from March 15, 2007. Presently the Bank has 3 (Three) units in Dhaka, Adamjee EPZ and Chittagong.
1.1.1 Principal activities The principal activities of the units are to provide all kinds of commercial banking services to its customers through its Off-shore Banking Units in Bangladesh. 1.2
Significant accounting policies and basis of preparation of financial statements
1.2.1 Basis of accounting The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the Bank Companies Act 1991 (Amendment 2013), Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank. 1.2.2 Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. 1.2.3 Foreign currency transaction a) Foreign currencies translation Foreign currency transactions are converted into equivalent Taka using the ruling exchange rates on the dates of respective transactions as per BAS-21” The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances held in US Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent. b) Commitments Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated at contracted rates. Contingent liabilities / commitments for letter of credit and letter of guarantee denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date. c) Translation gains and losses The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the translation of net investment in foreign subsidiary. 1.2.4 Cash flow statement Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 “ Cash Flow Statement” under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank. 1.2.5 Reporting period These financial statements cover from January 01 to December 31, 2015. 1.3
Assets and basis of their valuation
1.3.1 Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit management for its short-term commitments. 1.3.2 Loans and advances / investments a) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis. b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts. 1.3.3 Fixed assets and depreciation a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets.
359
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Notes to the Financial Statements for the year ended 31 December 2015
Category of fixed assets
Rate
Furniture and fixtures
10%
Office equipment
20%
c) For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is charged up to the date of disposal. 1.4
Basis for valuation of liabilities and provisions
1.4.1 Benefits to the employees The retirement benefits accrued for the employees of the units as on reporting date have been accounted for in accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefit”. Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below: a) Provident fund Provident fund benefits are given to the permanent staffs of the OBU under the Provident Fund Rules of the Bank. The Commissioner of Income Tax, Taxes Zone - 5, Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from 07 July 1997. The Fund is operated by a Board of Trustees consisting six members (03 members from management and other 03 members from the Board of Directors) of the Bank. All confirmed employees of the Units are contributing 10% of their basic salary as subscription to the Fund. The units also contribute equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account on yearly basis. b) Gratuity fund The Bank operates a funded gratuity scheme on “Continuing Fund Basis”, in respect of which provision is made annually according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved the Prime Bank Limited Employees’ Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.035.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management) of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employees Benefit”. c) Welfare fund Prime Bank’s employees’ welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental death or permanent disabilities of the employees. Disbursement from the fund is done as per rules for employees’ welfare fund. Welfare fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited. d) Incentive bonus Prime Bank started a incentive bonus scheme for its employees. 10% of net profit after tax is given by the Board of directors in every year for its employees. These bonus amount distributed among the employees as per performance. The bonus amount are paid annually, normally first quarter of every following year and the cost are accounted for the period to which it relates. Provision for incentive bonus for Off-shore Banking Units is kept with Head Office, Prime Bank Limited. 1.4.2 Provision for liabilities A provision is recognized in the balance sheet when the unit has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”. 1.5
Revenue recognition
1.5.1 Interest income In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognized on accrual basis. 1.5.2 Fees and commission income Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions. 1.5.3 Interest paid and other expenses In terms of the provisions of the BAS - 1 “Presentation of Financial Statements” interest and other expenses are recognized on accrual basis. 2
General a) These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka. b) Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 78.5003 (closing rate as at 31st December 2015) and Tk.77.9506 (average rate which represents the year end).
360
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015
2015 USD 3
2014 Taka
Taka
Balance with other banks and financial institutions In Bangladesh (note-3.1) Outside Bangladesh (note-3.2)
3.1 In Bangladesh
1,562,362
122,645,890
288,300,173
-
-
-
1,562,362
122,645,890
288,300,173
1,562,362
122,645,890
288,300,173
-
-
-
26,582,603
2,086,742,295
4,446,560,011
3.2 Outside Bangladesh (Nostro accounts) Current account Citibank N.A., New York, USA 4
Loans and advances i) Loans, cash credits, overdrafts, etc. Loan (General) Hire purchase
3,285,917
257,945,451
507,933,785
Lease finance
7,257,342
569,703,523
-
Over Draft
1,238,184
97,197,823
96,515,708
T.R Loan
12,062,528
946,912,035
953,408,983
Others
18,682,906
1,466,613,706
-
69,109,479
5,425,114,834
6,004,418,487
40,089,179
3,147,012,597
1,634,187,335
50,242,424
3,944,045,385
993,584,442
90,331,604
7,091,057,982
2,627,771,777
159,441,083
12,516,172,816
8,632,190,264
ii) Bills purchased and discounted (note-5) Payable Inside Bangladesh Inland bills purchased Payable Outside Bangladesh Foreign bills purchased and discounted
5
6
Bills purchased and discounted Payable in Bangladesh
40,089,179
3,147,012,597
1,634,187,335
Payable outside Bangladesh
50,242,424
3,944,045,385
993,584,442
90,331,604
7,091,057,982
2,627,771,777
Furniture and fixtures
19,573
1,536,453
1,692,925
Office equipment and machinery
5,864
460,341
567,449
Fixed assets including premises, furniture and fixtures Cost
Vehicle
7
1,149
90,171
358,161
26,585
2,086,964
2,618,535
1,339
105,114
104,377
639
50,170
34,078
10,000,000
785,003,000
-
Other assets Advance deposits and advance rent Stationery A/c & Stamp in hand Eastern Bank Limited Suspense
190,007
14,915,632
43,147,019
Due from Head Office
997,105
78,273,065
29,605,231
11,189,091
878,346,982
72,890,705
361
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015
2015 USD 8
Borrowings from other banks, financial institutions and agents Bangladesh Bank Prime Bank Limited Other Bank & Financial Institutes
9
Deposits and other accounts Bank deposits Customer deposits and other accounts (note-9.1)
9.1
10
Customer deposits and other accounts Current deposits Foreign currency deposits Fixed Deposit Sundry deposits
99,232,000 68,000,000 167,232,000
7,789,741,770 5,338,020,400 13,127,762,170
4,351,658,435 4,287,217,000 8,638,875,435
2,236,381 2,236,381
175,556,549 175,556,549
164,144,402 164,144,402
1,692,675 181,317 115,023 247,367 2,236,381
132,875,464 14,233,413 9,029,301 19,418,371 175,556,549
59,355,218 14,133,526 65,867,243 24,788,415 164,144,402
214,630 606,801 274,794 1,654,515 2,750,740
16,848,558 47,634,090 21,571,386 129,879,902 215,933,935
2,539,430 37,249,073 20,279,920 132,911,416 192,979,839
-
-
-
227,296 227,296 227,296
17,842,785 17,842,785 17,842,785
17,717,568 17,717,568 17,717,568
6,399,060 6,399,060 6,399,060
502,328,163 502,328,163 502,328,163
442,888,358 442,888,358 442,888,358
9,291,536 9,291,536 9,291,536
729,388,353 729,388,353 729,388,353
753,590,824 753,590,824 753,590,824
Contingent liabilities 11.1 Acceptance & endorsement Back to Back bills Less: Margin
11.2 Letters of guarantee Letters of guarantee (Local) Letters of guarantee (Foreign) Foreign counter guarantees Less: Margin 11.3 Irrevocable Letters of credits Letters of credits Back to Back letter of credit Less: Margin 11.4 Bills for collection Outward local bills for collection Outward foreign bills for collection Inward local bills for collection Inward foreign bills for collection Less: Margin
362
Taka
Other liabilities Interest on bills discount Interest on borrowing Provision for Expenses/adjusting A/C credit Interest Suspense A/c Due to Head Office
11
2014 Taka
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Notes to the Financial Statements for the year ended 31 December 2015
2015 USD 12
SOD
145,208,730
196,104,937
-
-
-
152,846
11,914,398
11,533,784
Lease finance
154,981
12,080,867
-
Hire purchase
369,718
28,819,738
43,794,718
658
51,254
-
3,180,303
247,906,498
105,013,695
Documentary bills purchased Others Interest on loans and advances Interest on balance with other banks and financial institutions Interest received from FC account
Total Interest income
255,650
19,928,058
-
5,976,985
465,909,544
356,447,134
-
-
-
1,136
88,561
261,785
1,136
88,561
261,785
5,978,121
465,998,106
356,708,919
Interest on deposits, borrowings, etc. a) Interest paid on deposits
7,041
548,881
119,331
b) Interest paid on local bank accounts
2,221,695
173,182,477
127,279,499
c) Interest paid on foreign bank accounts
2,175,249
169,561,937
102,677,512
-
-
-
4,403,985
343,293,295
230,076,343
Commission on L/Cs
127,441
9,934,065
9,330,134
Commission on L/Gs
-
-
227,244
36,401
2,837,513
2,940,106
-
-
-
Commission on accepted bills
27,344
2,131,480
3,146,116
Commission on OBC, IBC, etc.
-
-
-
2,610
203,451
101,286
-
-
-
30,326
2,363,921
2,488,258
224,122
17,470,430
18,233,143
Exchange gain including gain from FC dealings
-
-
-
Brokerage
-
-
-
224,122
17,470,430
18,233,143
d) Interest paid on Bangladesh Bank
Commission, exchange and brokerage
Commission on export bills Commission on bills purchased
Commission on PO, DD, TT, TC, etc. Commission for services rendered to issue of shares Other commission
15
1,862,830
LTR loan
Payment against documents
14
Taka
Interest income Loan (general)
13
2014 Taka
Other operating income Postage charge recovery
3,879
302,370
200,786
Service & other charge
-
-
-
SWIFT charge recovery
15,714
1,224,914
832,378
Miscellaneous earnings
331,825
25,865,941
9,635,711
351,418
27,393,225
10,668,874
363
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Notes to the Financial Statements for the year ended 31 December 2015
2015 USD 16
Basic pay
78,306
6,104,001
4,780,486
Allowances
63,572
4,955,472
4,223,165
6,042
470,942
821,627
7,461
581,603
464,369
-
-
-
155,381
12,112,017
10,289,648
10,139
790,315
611,695
934
72,829
16,381
7,338
571,997
196,626
18,411
1,435,141
824,702
2,199
171,406
55,664
-
-
47,527
514
40,078
16,747
-
-
-
2,713
211,485
119,938
Office and security stationery
3,475
270,906
90,890
Computer consumable stationery
2,290
178,500
149,621
39
3,031
5,248
5,804
452,437
245,759
7,007
546,225
597,279
-
-
-
7,007
546,225
597,279
Unit's contribution to provident fund Retirement benefits and gratuity
Rent, taxes, insurance, electricity, etc. Rent, rate and taxes Insurance Power and electricity
18
Postage, stamp, telecommunication, etc. Postage Telegram, telex, fax and e-mail Telephone - office Telephone - residence
19
Stationery, printing and advertisements, etc.
Publicity and advertisement
20
Taka
Salaries and allowances
Bonus
17
2014 Taka
Depreciation and repair of Bank's assets Depreciation Fixed assets Leased assets Repairs Furniture and fixtures Office equipment Vehicle Maintenance
21
-
7,893
18,130
25,980
-
-
-
154
12,029
15,021
387
30,159
48,894
7,394
576,384
646,173
19,647 659 6,105 54 147 739 1,373 265,942 294,665
1,531,463 51,345 475,923 4,218 11,470 57,570 106,991 20,730,344 22,969,325
837,889 77,322 308,071 5,351 107,469 56,136 59,748 9,588,307 11,040,294
Other expenses Security and cleaning Entertainment Bank charge & Commission Car expenses Books, magazines and newspapers, etc. Travel expenses Local conveyance, labor, etc. Training & internship Other Professional Charges Exgratia Miscellaneous expenses
364
233
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
ANNEXURE-L
PRIME BANK INVESTMENT LIMITED
365
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Auditors’ Report To The Shareholders of Prime Bank Investment Limited We have audited the accompanying financial statements of Prime Bank Investment Limited, which comprise the Statement of Financial Position as at December 31, 2015 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the period then ended, and a summary of significant accounting policies and other explanatory information. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud and error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs). Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank Investment Limited as at December 31, 2015 and its financial performance and its cash flows for the period then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities and Exchange Rules 1987. We also report that: a)
we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;
b)
in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;
c)
the Statement of Financial Position and the Statement of Profit or Loss and Other Comprehensive Income dealt with the report are in agreement with the books of account and returns;
d)
the expenditure incurred and payments made were for the purpose of the Company’s business for the period;
Dated: February 09, 2016 Chartered Accountants
366
Dhaka
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Investment Limited Statement of Financial Position As at 31 December 2015 Amount in Taka 31.12.2015
31.12.2014
ASSETS Non-Current Assets Property, plant and equipment Investment in Prime Bank Securities Ltd Preliminary and pre-operational expenses Deferred tax asset Total non-current assets
9,288,907
12,804,672
37,500,000
37,500,000
2,091,656
2,614,571
924,940
344,306
49,805,503
53,263,549
5,679,449,956
6,023,214,463
1,146,778,917
1,102,855,608
1,870,615
4,018,805
747,550
765,968
Current Assets Advances, deposits and prepayments Investment in shares Dividend receivable Prepaid expenses Advance corporate income tax
8,396,003
7,603,618
Cash and bank balances
8,940,004
32,863,813
Total current assets
6,846,183,046
7,171,322,276
Total Assets
6,895,988,549
7,224,585,825
3,000,000,000
3,000,000,000
28,002,888
28,002,888
EQUITY AND LIABILITIES Capital and Reserve Share capital General Reserve Retained earnings Total Equity
19,922,829
14,117,108
3,047,925,717
3,042,119,996
3,081,354,480
3,387,911,205
Current Liabilities Loan facilities Liability for withholding taxes Security deposit receipt Provision for expenses Provision for investment and margin loan Corporate income tax payable Accounts payable Dividend payable Other payables
21,718
95,625
44,100
44,100
2,169,642
4,161,269
672,508,611
700,000,000
7,133,748
8,534,689
154,002
673,694
10
10
84,676,522
81,045,236
Total current liabilities
3,848,062,832
4,182,465,829
Total Equity and Liabilities
6,895,988,549
7,224,585,825
Chief Executive Officer
Chartered Accountants
Director
Chairman
Date: February 09, 2016 Dhaka
367
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Investment Limited Statement of Comprehensive Income for the year ended 31 December 2015 Amount in Taka Jan-Decâ&#x20AC;&#x2122;15
Jan-Decâ&#x20AC;&#x2122;14
INCOME Interest income
314,585,833
391,826,475
Settlement fee
35,666,127
53,211,749
Management fee
15,536,495
19,872,877
Gain on sale of shares Dividend on shares Underwriting commission Issue management fee Bank interest on STD accounts Documentation fees
325,527
29,691,761
37,371,588
31,836,370
480,600
539,612
50,000
100,000
1,294,126
3,201,399
8,500
19,000
405,318,796
530,299,243
370,054,659
452,709,342
3,722,741
6,565,430
26,189,519
28,775,522
6,175,792
7,993,200
Legal & Professional expenses
195,500
238,050
Postage, Stamp and Telecommunication
1,467,110
995,916
1,048,374
1,308,710
293,800
239,250
115,000
115,000
EXPENDITURE Interest expenses Settlement and other fees Salary and allowances Rent, Taxes, Insurance and Electricity
Stationery, Printing and Advertisement Directors remuneration Auditor's fee Depreciation, Amortisation and Repair of assets
4,650,111
6,428,119
Entertainment, Travelling & Conveyance
1,246,189
1,261,030
2,454,569
2,021,006
Security expense Other expenses Interest waiver to affected small investors
Profit before provision and tax Add/(Less): Provision for investment and margin loan Profit before tax Less: Tax expenses Current Tax expense
1,559,232 1,299,153
420,457,351
511,508,960
(15,138,555)
18,790,283
27,491,389
(195,497,963)
12,352,834
(176,707,680)
(6,547,113)
(7,675,068)
7,127,747
8,532,689
Deferred Tax expense/(income)
(580,634)
(857,621)
Profit after tax
5,805,721
(184,382,748)
0.02
(0.61)
Earnings per share
Chief Executive Officer
Chartered Accountants
368
1,543,987 1,300,000
Director
Chairman
Date: February 09, 2016 Dhaka
Director
3,000,000,000
Balance as at 31 December 2014
Chief Executive Officer
3,000,000,000
-
3,000,000,000
Paid up capital Taka
Balance as at 31 December 2015
Retained Profit for the year
Balance as at 01 January 2015
Particulars
for the year ended 31 December 2015
Statement of Changes in Equity
Prime Bank Investment Limited
28,002,888
28,002,888
-
28,002,888
General Reserve
14,117,108
19,922,829
5,805,721
14,117,108
Retained Earnings
Dhaka
Date: February 09, 2016
Chairman
3,042,119,996
3,047,925,717
5,805,721
3,042,119,996
Total
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
369
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Investment Limited Statement of Cash Flows for the year ended 31 December 2015 Amount in Taka 31.12.2015
31.12.2014
Cash Flows from Operating Activities: Cash generated from operations
(34,096,227)
(46,500,419)
Advance Income Tax
(130,000)
(630,000)
Advance to branches
(4,895)
-
(2,541,190)
(2,413,975)
(212,413)
(200,000)
(1,130,987)
(13,370,988)
(38,115,712)
(63,115,382)
(238,742)
(261,300)
66,335,002
303,379,894
Purchase of shares during the year
(110,276,759)
(128,424,862)
Margin Loan recovered
345,272,267
198,243,148
301,091,769
372,936,880
(286,899,866)
(364,644,636)
-
-
(286,899,866)
(364,644,636)
(23,923,809)
(54,823,138)
Opening cash and bank balances
32,863,813
87,686,951
Closing cash and bank balances
8,940,004
32,863,813
12,609
9,228
Cash in hand
8,927,394
32,854,586
Cash at bank
8,940,004
32,863,813
Payment for withholding taxes Advance deposit Income tax paid Net cash used operating activities Cash Flows from Investing Activities: Purchase of property, plant and equipment Sale of shares during the year
Net cash from investing activities Cash Flows from Financing Activities: Proceeds/(Repayments) of loan facilities Dividend paid Net cash used in financing activities Net Cash Inflow/(Outflow) for the period
Cash and bank balances
Chief Executive Officer
Date: February 09, 2016 Dhaka
370
Director
Chairman
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
ANNEXURE-M
PRIME BANK SECURITIES LIMITED
371
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Auditors’ Report To The Shareholders Prime Bank Securities Limited We have audited the accompanying financial statements of Prime Bank Securities Limited, which comprise the Statement of Financial Position as at December 31, 2015 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managements’ responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud and error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs). Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank Securities Limited as at December 31, 2015 and its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities and Exchange Rules 1987.
We also report that: a)
we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;
b)
in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;
c)
the Statement of Financial Position and the Statement of Profit or Loss and Other Comprehensive Income dealt with the report are in agreement with the books of accounts;
d)
the expenditure incurred and payments made were for the purpose of the Company’s business for the period;
Dhaka Date: February 03, 2016
372
Chartered Accountants
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Securities Limited Statement of Financial Position as at 31 December 2015 Amount in Taka 31.12.2015
31.12.2014
SOURCES OF FUNDS Share capital
750,000,000
Retained earnings
750,000,000
(30,126,511)
17,484,333
719,873,489
767,484,333
Fixed assets
648,680
2,021,974
Intangible assets
300,922
606,497
Deferred tax
943,873
157,415
664,000,000
664,000,000
665,893,475
666,785,886
Shareholders equity APPLICATION OF FUNDS Non-Current Assets (A)
Investment in DSE and CSE shares Current Assets (B) Advances, deposits and prepayments Advance income tax Investment in securities Accounts receivable Loan to customers Cash and cash equivalents
251,300
251,300
44,429,829
38,724,088
87,626,134
87,628,861
6,764,713
12,350,022
350,622,901
381,629,800
22,103,183
14,974,084
511,798,060
535,558,155
Current Liabilities (C) Accounts payable
24,575,539
17,862,927
Financial liabilities
375,927,982
371,066,787
34,219,614
33,683,386
6,173,367
3,741,333
15,931,966
5,626,357
Provision for taxation Provision for diminution in value of investment in shares Provision for impairment of margin loan Provision for expenses
Net current assets D=(B-C) Total assets (A+D)
Chief Executive Officer
Chartered Accountants
989,577
2,878,919
457,818,045
434,859,709
53,980,015
100,698,447
719,873,489
767,484,333
Director
Chairman
Dhaka Date: February 03, 2016
373
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Securities Limited Statement of Profit or Loss & Other Comprehensive Income for the year ended 31 December 2015 Amount in Taka 01.01.2015 to 31.12.2015
01.01.2014 to 31.12.2014
Operating Income Revenue from brokerage commission Interest income Other operating income Capital gain from investment in shares Dividend income Total operating income (A)
20,618,556
30,121,613
6,897,066
11,667,012
542,394
971,313
3,224
386,861
2,994,660
2,257,010
31,055,900
45,403,809
Operating expenses
22,400,396
22,992,826
Financial expenses
40,633,842
46,349,449
Direct expenses Total operating expenses (B) Operating profit/(Loss) before provision C=(A-B) Less: Provision for diminution in value of investment in shares Provision for impairment of margin loan Total provision (D) Operating profit/(Loss) before taxation E=(C-D)
3,145,093
4,287,515
66,179,331
73,629,790
(35,123,431)
(28,225,981)
2,432,034
(428,503)
10,305,609
3,675,143
12,737,643
3,246,640
(47,861,075)
(31,472,621)
Current tax
536,228
490,088
Deferred tax
(786,459)
(391,254)
Total provision for tax (F)
(250,231)
98,834
(47,610,844)
(31,571,455)
(0.63)
(0.42)
Net profit/(Loss) after tax [G=E-F] Earnings per share
Chief Executive Officer
Chartered Accountants
Director
Chairman
Dhaka Date: February 03, 2016
374
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Securities Limited Statement of Changes in Equity for the year ended 31 December 2015 Particulars Balance as at January 01, 2014
Share capital
Balance as at January 01, 2015
49,055,787
799,055,787
-
(31,571,455)
(31,571,455)
750,000,000
17,484,332
767,484,332
750,000,000
17,484,333
767,484,333
-
(47,610,844)
(47,610,844)
750,000,000
(30,126,511)
719,873,489
Profit for the year 2015 Balance as at December 31 2015
Chief Executive Officer
Chartered Accountants
Total
750,000,000
Profit for the year 2014 Balance as at December 31 2014
Retained earnings
Director
Chairman
Dhaka Date: February 03, 2016
375
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Securities Limited Statement of Cash Flows for the year ended 31 December 2015 Amount in Taka 2015 A
2014
Cash flow from operating activities Net profit during the year
(47,610,844)
(31,571,454)
1,801,834
2,633,263
Add: Amount considered as non-cash items Depreciation & amortization charged Write off of preliminary expenses
-
-
Write off of other assets
-
15,500
(1,909,685)
(1,782,450)
2,432,034
(428,503)
Dividend receipts Provision for diminuation in value of investment Provision for negative equity under margin loan
10,305,609
3,675,143
12,629,792
4,112,953
Changes in working capital (Increase)/decrease in advances, deposits and prepayments (Increase)/decrease in advance income tax (Increase)/decrease in investments in securities
787,577
31,006,902
17,143,108
(Increase)/decrease in deferred tax
(786,459)
(391,254)
Increase/(decrease) in current tax
536,228
490,088
Net cash flows from operating activities
(1,889,342)
322,333
6,712,612
(132,877,717)
4,861,195
33,056,585
40,323,430
(95,008,015)
5,342,379
(122,466,517)
(122,965)
893,896
Cash flow from investing activities Fixed assets acquisition Intangible assets acquisition Net cash flows from investing activities
-
-
(122,965)
893,896
Cash flows from financing activities Issue of share capital Dividend receipts Dividend paid Net cash from financing activities Net cash increase / (decrease)
-
-
1,909,686
1,782,450
-
-
1,909,686
1,782,450
7,129,100
(119,790,171)
E
Cash and cash equivalents at the beginning of the year
14,974,084
134,764,255
F
Cash and cash equivalents at the end of the year
22,103,183
14,974,084
Chief Executive Officer
Dhaka Date: February 03, 2016
376
(6,078,327)
(Increase)/decrease in loans to customers
Increase/(decrease) in secured overdraft
D
2,726 5,585,309
Increase/(decrease) in accounts payable
C
(20,000) (7,440,408)
(Increase)/decrease in accounts receivable
Increase/(decrease) in provision for expenses
B
(5,705,741)
Director
Chairman
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
ANNEXURE-N PRIME EXCHANGE CO. PTE. LTD.,
SINGAPORE
377
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Independent Auditor’s Report to the Member of Prime Exchange Co. Pte. Ltd. (Incorporated in the Republic of Singapore)
Report on the Financial Statements We have audited the accompanying financial statements of Prime Exchange Co. Pte. Ltd. (the “Company”), which comprise the statement of financial position as at 31 December 2015, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the financial position of the Company as at 31 December 2015 and of the financial performance, changes in equity and cash flows of the Company for the financial year ended on that date. Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.
C. C. YANG & CO. PUBLIC ACCOUNTANTS AND CHARTERED ACCOUNTANTS SINGAPORE 10 February 2016
378
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Exchange Co. Pte. Ltd. Statement of Profit or Loss & Other Comprehensive Income for the year ended 31 December 2015 (Expressed in Singapore Dollars) 2015
2014
$
$
Revenue Commission Income
537,952
628,295
4,376
16,302
357,452
575,663
(369,348)
(359,890)
(47,809)
(52,711)
(382,636)
(538,221)
Profit Before Tax from Continuing Operations
99,987
269,438
Income Tax Expense
(2,842)
(14,088)
97,145
255,350
-
-
$97,145
$ 255,350
Other Items of Income Other Income Foreign Currency Gains Other Items of Expense Employee Benefits Expense Depreciation Other Expenses
Profit from Continuing Operations, Net of Tax Other Comprehensive Income Other Comprehensive Income, Net of Tax Total Comprehensive Income
379
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Exchange Co. Pte. Ltd. Statement of Financial Position as at 31 December 2015 (Expressed in Singapore Dollars) 2015
2014
$
$
ASSETS Non-Current Assets Property, Plant and Equipment
16,003
61,974
Total Non-Current Assets
16,003
61,974
120,475
69,990
10,364
11,528
1,016,689
1,144,279
1,147,528
1,225,797
$ 1,163,531
$ 1,287,771
804,727
250,000
97,145
583,017
901,872
833,017
Deferred Tax Liabilities
1,524
6,429
Total Non-Current Liabilities
1,524
6,429
252,442
431,277
7,693
17,048
Total Current Liabilities
260,135
448,325
Total Liabilities
261,659
454,754
$ 1,163,531
$ 1,287,771
Current Assets Other Receivables Prepayments Cash and Bank Balances Total Current Assets Total Assets EQUITY AND LIABILITIES Equity Share Capital Retained Earnings Total Equity Non-Current Liabilities
Current Liabilities Trade and Other Payables Tax Payable
Total Equity and Liabilities
380
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Exchange Co. Pte. Ltd. Statement of Changes in Equity for the year ended 31 December 2015 (Expressed in Singapore Dollars) Total
Balance at 1.1.2015
Equity
Share Capital
Retained Earnings
$
$
$
833.017
250,000
583,017
-
554,727
(554,727)
Dividends
(28,290)
-
(28,290)
Total Contributions by and Distributions to Owner
(28,290)
554,727
(583,017)
97,145
-
97,145
$ 901,872
$ 804,727
$ 97,145
672.022
250,000
422,022
Dividends
(94.355)
-
(94,355)
Total Distributions to Owner
(94,355)
-
(94,355)
Total Comprehensive Income for the Year - 2014
255,350
-
255,350
$ 833,017
$ 250,000
$ 583,017
Contributions by and Distributions to Owner Issue of Share Capital by Way of Bonus Shares Issued
Total Comprehensive Income for the Year - 2015 Balance at 31/12/2015 Balance at 1/1/2014 Distributions to Owner
Balance at 31.12.2014
381
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Exchange Co. (Pte.) Ltd. Statement of Cash Flows for the year ended 31 December 2015 (Expressed in Singapore Dollars) 2015
2014
$
$
Cash Flows From Operating Activities Profit Before Income Tax
99,987
269,438
Total Adjustments
47,809
52,711
Depreciation
47,809
52,711
147,796
322,149
1,164
(3,478)
Increase/(Decrease) in Trade and Other Payables
(178,835)
64,211
Cash Flows Generated From (Used In) Operations
(29,875)
382,882
(17,102)
(4,632)
(46,977)
378,250
(1,838)
(14,361)
Increase in Amount Due From Holding Company
(50,485)
-
Net Cash Flows Used In Investing Activities
(52,323)
(14,361)
(28,290)
(94,355)
Net Cash Flows Used In Financing Activities
(28,290)
(94,355)
Net Increase (Decrease) in Cash and Cash Equivalents
(127.590)
269,534
Cash and Cash Equivalents at Beginning of Year
1,144,279
874,745
$ 1,016,689
$ 1,144,279
Operating Profit Before Working Capital Changes Decrease (Increase) in Prepayments
Income Tax Paid Net Cash Flows From used in Operating Activities Cash Flows From Investing Activities Purchase of Property, Plant and Equipment
Cash Flows From Financing Activities Dividends Paid on Ordinary Shares
Cash and Cash Equivalents at End of Year
382
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS
ANNEXURE-O PBL EXCHANGE (UK) LIMITED
UK
383
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
PBL Exchange (UK) Limited Independent Auditor’s Report to the Members of PBL Exchange (UK) Limited We have audited the financial statements of PBL EXCHANGE (UK) LIMITED for the Year ended 31 December 2015 set out on pages 5 to 12. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Directors’ Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the company’s affairs as at 31 December 2015 and of its loss for the Year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors’ Report for the financial Year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if. in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit; or the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemption in preparing the directors’ report and from preparing a strategic report.
Mrs. Seema Siddiqui (Senior Statutory Auditor) for and on behalf of Reddy Siddiqui & Kabani Chartered Accountants
07 February 2015
Statutory Auditor Park View 183-189 The Vale Acton London W3 7RW
384
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
PBL Exchange (UK) Limited Profit and Loss Account for the year ended 31 December 2015
Turnover Administrative expenses Operating loss
Period ended
Period ended
31 December
31 December
2015
2014
ÂŁ
ÂŁ 338,421
358,535
(348,216)
(373,832)
(9,795)
(15,297)
(197)
(6)
(9,992)
(15,303)
-
-
(9,992)
(15,303)
Interest payable and similar charges Loss on ordinary activities before taxation Tax on loss on ordinary activities Loss for the year
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.
385
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
PBL Exchange (UK) Limited Balance Sheet as at 31 December 2015 2015 £
2014 £
£
£
Fixed assets Tangible assets
110,417
120,721
Current assets Cash at bank and in hand Creditors: amounts falling due within one year
171 ,090
223,333
(193,252)
(245,807)
Net current liabilities
(22,162)
(22,474)
88,255
98,247
Called up share capital
500,000
500,000
Profit and loss account
(411,745)
(401,753)
88,255
98,247
Total assets less current liabilities Capital and reserves
Shareholders' funds
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime. Approved by the Board and authorised for issue on 07 February 2016
386
Ahmed Kamal Khan Chowdhury
Md Shirajul Islam Mollah
Director
Director
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
PBL Exchange (UK) Limited Cash Flow Statement for the year ended 31 December 2015 Period ended
Period ended
31 December
31 December
2015
2014
£
£
£
£
(51,763)
Net cash inflow/(outflow) from operating activities
(58,614)
Returns on investments and servicing of finance Interest paid
(197)
Net cash outflow for returns on investments and servicing of finance
(6) (197)
(6)
Capital expenditure Payments to acquire tangible assets Net cash outflow for capital expenditure Net cash inflow/(outflow) before management of liquid resources and financing Increase/(decrease) in cash in the year
(283)
(1,731) (283)
(1,731)
(52,243)
(60,351)
(52,243)
(60,351)
387
Fi na n c i a l S t a t e m en ts
PRIME BANK A N N UA L R E P O RT 2 0 1 5
FINANCIAL STATEMENTS
ANNEXURE-P PBL FINANCE (HONG KONG) LIMITED
HONG KONG
388
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Independent Auditor’s Report to the Shareholders of PBL Finance (Hong Kong) Limited (Incorporated in Hong Kong with limited liability) We have audited the financial statements of PBL Finance (Hong Kong) Limited (“the Company “ ) set out on pages 5 to 15, which comprise the statement of financial position as at 31st December, 2015, and the statement of income and retained earnings and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Directors’ Responsibility for the Financial Statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with the Hong Kong Financial Reporting Standard for Private Entities issued, by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. Our report is made solely to you, as a body, in accordance with section 405 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the state of the Company’s affairs as at 31st December, 2015, and of its profit and cash flows for the year then ended in accordance with the Hong Kong Financial Reporting Standard for Private Entities and have been properly prepared in accordance with the Hong Kong Companies Ordinance.
C. C. Yang & co. Public Accountants And Chartered Accountants
15 February, 2016
389
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
PBL Finance (Hong Kong) Limited Statement of Income and Retained Earnings for the year ended 31st December, 2015 2014
HK$
HK$
Interest income
9,868,809
8,412,464
Interest expenses
(3,315,131)
(2,562,328)
Net interest income
6,553,678
5,850,136
Other operating income
5,666,032
5,425,926
Total operating income
12,219,710
11,276,062
(2,064,943)
(2,974,550)
(142,303)
(197,210)
Staff costs Depreciation Other operating expenses
(1,533,585)
(1,525,677)
Total operating expenses
(3,740,831)
(4,697,437)
Profit before taxation
8,478,879
6,578,625
Income tax expense
(1,399,210)
(1,083,089)
Profit for the year
7,079,669
5,495,536
Retained earnings at start of year Dividends Retained earnings at end of year
390
2015
5,495,536
5,037,527
(5,495,536)
(5,037,527)
7,079,669
5,495,536
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
PBL Finance (Hong Kong) Limited Statement of Financial Position as at 31st December, 2015 2015
2014
HK$
HK$
Non-current assets Property, plant and equipment
91,237
227,628
158,359,547
229,651,539
300,303
347,966
1,290,876
849,546
159,950,726
230,849,051
3,822,173
2,699,327
145,314,000
219,297,000
326,121
84,816
149,462,294
222,081,143
10,488,432
8,767,908
10,579,669
8,995,536
3,500,000
3,500,000
7,079,669
5,495,536
10,579,669
8,995,536
Current assets Discounted bills receivable Deposits, prepayments and other receivables Cash and bank balances
Current liabilities Accrued liabilities and other payables Amount due to ultimate holding company Income tax payable
Net current assets
Equity Share capital Retained earnings
The financial statements were approved and authorised for issue by the Board of Directors on 15 FEB 2016 and are signed on its behalf by:
Director
Director
391
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
PBL Finance (Hong Kong) Limited Notes to Statement of Cash Flows for the year ended 31st December, 2015 2015
2014
HK$
HK$
Operating activities Profit before taxation
8,478,879
6,578,625
142,303
197,210
8,621,182
6,775,835
71,291,992
12,065,092
47,663
(24,394)
1,122,846
687,326
(73,983,000)
(13,821,600)
7,100,683
5,682,259
Tax paid
(1,157,905)
(1,161,503)
Net cash generated from operating activities
5,942,778
4,520,756
Purchase of property, plant and equipment
(5,912)
(138,663)
Net cash used in investing activities
(5,912)
(138,663)
Dividend paid to equity shareholders of the Company
(5,495,536)
(5,037,527)
Cash used in from financing activities
(5,495,536)
(5,037,527)
Net increase/(decrease) in cash and cash equivalents
441,330
(655,434)
Cash and cash equivalents at start of year
849,546
1,504,980
Cash and cash equivalents at end of year
1,290,876
849,546
1,290,876
849,546
Adjustments for : Depreciation Operating profit before changes in working capital Decrease in discounted bills receivable Decrease/(Increase) in deposits, prepayments and other receivables Increase in accrued liabilities and other payables (Decrease) in amount due to ultimate holding company Net cash generated from operation
Investing activities
Financing activities
Analysis of cash and cash equivalents Cash and bank balances
392
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
FINANCIAL STATEMENTS PRIME BANK FOUNDATION
393
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Foundation Auditors’ Report For the year ended 31 December 2015 We have audited the accompanying financial statements of Prime Bank Foundation (the Foundation), which comprise the statement of financial position (balance sheet) as at 31 December 2015 and the related statement of profit or loss and other comprehensive income (income and expenditure statement), receipts and payments statement for the year then ended and a summary of significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with generally accepted accounting principles and other applicable laws and regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in circumstances.
Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain a reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements, prepared in accordance with generally accepted accounting principles, give a true and fair view of the state of the Foundation’s affairs as at 31 December 2015 and of the results of its operations and comply with the applicable laws and regulations. We also report that: (a)
we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;
(b)
in our opinion, proper books of account as required by law have been kept by the Foundation so far as it appeared from our examination of those books; and
(c)
the statement of financial position (balance sheet) and statement of profit or loss and other comprehensive income (income and expenditure statement) dealt with by this report are in agreement with the books of account and returns.
Dhaka, Bangladesh Dated, 18 February 2016
394
S. F. AHMED & CO Chartered Accountants
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Foundation Statement of Financial Position (Balance Sheet) As at 31 December 2015 Amount in Taka 2015
2014
Sources of funds Fund account
1,483,956,081
1,483,956,081
Retained earnings/(losses)
(193,442,977)
(120,823,337)
1,290,513,104
1,363,132,744
510,928,092
536,264,295
487,551,175
531,578,558
Applications of funds Non-current assets Property, plant and equipment Current assets Investment in fixed deposit Interest receivable Receivable from Prime Bank Limited Advance income tax Stock - Prime Bank Eye Hospital Advances, deposits and prepayments Cash and bank balances
2,856,892
4,676,102
-
131,203,993
27,825,812
23,443,298
762,748
223,964
268,376,878
140,602,375
1,933,701
5,028,688
789,307,206
836,756,978
7,457,179
6,992,492
Less: Current liabilities Provision for expenses Other payable
603,480
1,142,377
Security Money
1,661,536
1,753,658
779,585,011
826,868,451
1,290,513,104
1,363,132,744
Net current assets Net assets
for Prime Bank Foundation
Member Secretary
Member
Chairman
See annexed report of the date
Dhaka, Bangladesh Dated, 18 February 2016
S. F. AHMED & CO Chartered Accountants
395
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Foundation
Statement of profit or loss and other Comprehensive Income (income and expenditure statement) For the year ended 31 December 2015 Amount in Taka 2015 Income Interest on fixed deposit Income from Prime Bank Eye Hospital Income from Prime Bank English Medium School, Uttara Income from Prime Bank Nursing Institute Income from Prime Bank English Medium School, Mirpur Interest on short term deposit Expenditure Salary and allowances Awardees stipend Depreciation Office rent Repair and office maintenance OT expenses Car maintenance Security service Utility Legal and professional fees Advertisement Seminar, training and workshop Printing and stationery Award giving ceremony Gratuity Telephone Expenses - Medicine shop Expenses - Eye camp Expenses - Optic shop Travelling and conveyance Education affairs expenses Books and teaching materials Entertainment Vision centre Excise duty - interest on fixed deposit Audit fee Honorarium Newspaper Communication expense Pathology CSR area awards Bank charges Income tax Deficit for the year
2014
37,498,966 19,113,417 17,149,528 5,472,145 2,526,402 36,258 81,796,716
59,326,434 20,624,933 12,860,686 2,814,400 1,574,937 97,201,390
46,357,086 35,719,200 32,220,502 12,911,220 3,983,778 2,863,282 2,680,663 2,478,495 2,060,137 1,514,337 1,415,424 1,205,619 1,068,097 1,051,851 879,400 855,136 780,346 723,390 673,597 656,522 598,814 514,595 436,447 391,038 88,524 86,250 65,000 46,224 27,255 25,855 25,004 13,268 154,416,356 (72,619,640)
43,482,426 30,332,400 18,517,336 11,313,810 2,453,020 1,047,792 2,521,601 2,040,034 2,149,458 448,200 1,122,293 957,149 1,321,472 999,138 1,793,100 592,238 444,684 9,093,224 716,303 508,121 922,659 394,254 474,684 27,000 86,250 33,714 36,482 19,514 320,994 17,159 500,000 134,686,509 (37,485,119)
for Prime Bank Foundation
Member Secretary
Dhaka, Bangladesh Dated, 18 February 2016
396
Member
Chairman See annexed report of the date
S. F. AHMED & CO Chartered Accountants
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Prime Bank Foundation
Receipts and Payments Statement For the year ended 31 December 2015 Amount in Taka
Opening cash and bank balances Cash in hand Bank balances Fixed deposit Stock of spectacles - eye hospital Receipts Contribution from Prime Bank Limited Interest on fixed deposit Income from Prime Bank English Medium School, Uttara Income from Prime Bank Eye Hospital Income from Prime Bank Nursing Institute PBL contribution for eye camp and blood donation Income from Prime Bank English Medium School, Mirpur Security money VAT (students) Security money (students) Interest on STD Security money (teachers, staff and PBNI Hostel) Advance office rent - Prime Bank Nursing Institute
Payments Fund transfer to Blue Ridge English School Salary and allowances Awardees stipend Office rent Advances Advance income tax Repair and office maintenance Furniture and fixtures Car maintenance Security service Accounts payable Security money Medical equipment Legal and professional fees Utility Stock Advertisement Printing and stationery VAT (parties) Award giving ceremony Income tax at source (parties) Books and teaching materials Telephone Seminar, training and workshops Optic shop Office equipment Eye camp Computer Vision centre Entertainment Travelling and conveyance
2015
2014
215,740 4,812,948 531,578,559 536,607,247
133,108 10,995,910 582,515,318 70,200 593,714,536
131,203,993 39,318,176 16,656,283 15,633,387 5,068,495 3,476,300 2,480,265 611,115 535,015 160,000 36,258 215,179,287 751,786,534
137,820,000 64,055,172 12,752,684 16,563,750 3,417,350 8,436,700 1,663,637 142,089 132,000 244,983,382 838,697,918
127,110,000 46,125,242 35,719,200 9,668,137 6,681,832 4,382,514 3,761,908 2,584,742 2,396,121 2,344,661 2,702,445 2,127,808 1,502,348 1,393,837 1,387,272 1,369,341 1,222,368 1,025,046 917,694 869,702 744,994 728,139 727,151 610,860 584,349 565,173 424,727 416,756 389,038 370,548 329,533
135,954,000 43,217,921 30,332,400 9,410,500 5,864,164 6,419,146 2,215,669 1,412,211 2,376,115 1,870,884 4,338,420 963,176 2,154,000 371,200 2,088,997 10,893 990,719 1,104,958 990,883 438,788 907,120 355,678 592,238 675,490 489,257 678,334 5,813,234 381,090 447,384 508,091
397
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Prime Bank Foundation
Receipts and Payments Statement For the year ended 31 December 2015 Amount in Taka 2015 Education affairs expenses VAT (students) OT expenses Medicine shop Excise duty Newspaper Generator Honorarium Pathology Communication expenses CSR area awards Security refund: teacher and staff Bank charges Library and books Land PBL eye camp receivable Income tax Security money Audit fee Closing cash and bank balances Cash in hand Bank balances Fixed deposit
2014
317,284 297,005 175,711 88,524 46,224 44,000 35,000 25,855 25,330 25,004 15,000 13,268 9,965 -
622,602 11,523 698,657 444,684 27,000 33,714 19,514 31,760 320,994 16,159 99,704 31,200,000 4,473,900 500,000 150,000 67,500
262,303,671
302,092,685
34,928 1,898,774 487,551,176 489,484,878 751,788,549
215,740 4,812,948 531,578,559 536,607,247 838,699,932
for Prime Bank Foundation
Member Secretary
Member
Chairman
See annexed report of the date
Dhaka, Bangladesh Dated, 18 February 2016
398
S. F. AHMED & CO Chartered Accountants
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
SOME PBL ACTIVITIES DURING THE YEAR 2015
Donation to Prime Minister’s Relief Fund
PBL Chairman at the “SME Conference”
Town Hall Meeting 2015
Donation to Prime Minister’s Relief Fund for the cold-hit people
Paying Homage to the Martyrs of language Movement
Celebrating Pohela Boishakh 1422
Observance of World Environment Day 2015
Workshop on ‘Green Banking’
399
Fi na n c i a l S t a t e m en ts
400
PRIME BANK A N N UA L R E P O RT 2 0 1 5
“Prime Bank – BRRI First National Bio Camp- 2015”
Prime Bank Medical Camp at Biswa Ijtema
Blood Donation Program
Cheque book distribution among the 10 (ten) taka account holders
Ifter Mahfil & Discussion Program
Prime Bank Receives Remittance Award
Agreement Exchange with BRAC for Agriculture
Agreement with IFC on RMG Remediation Finance
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
On the occasion of Risk-Sharing Guarantee Agreement with USAID
MoU between Prime Bank & Agora
Launch of the First Business World MasterCard in Bangladesh
Prize giving ceremony at Bank sponsored Golf Tournament
Opening of 145th Branch at Saidpur, Nilphamari
Inauguration of ATM booth at Royal Tulip Sea Pearl beach resort, Inani, Coxâ&#x20AC;&#x2122;s Bazar
Fire Drill at Head Office
EXCHANGE OF PARTICIPATING AGREEMENT FOR LONG TERM FINANCING FACILITY WITH BANGLADESH BANK
401
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
BRANCH NETWORK Bashundhara Branch Dhaka Division
Plot # 236, Block – B,
Phone: 02 - 9551682, 9570751, 7161146 Fax: 02 - 9553078
Bashundhara R/A, Dhaka. Adamjee EPZ Branch Adamjee EPZ Holding # 4,
Phone: 02 - 8845213, 8415276, 8845215 Fax: 02 - 8845214
Siddirganj, Narayanganj. Phone: 02 - 7692025-26, 7692024 Fax: 02 - 7692027 Asad Gate Branch 2/6, Sir Sayed Road, Mohammadpur (Mirpur Road), Dhaka. Phone: 02 - 9125400, 8142106, 8142134, 9136214 Fax: 02 - 9122640 Ashulia Branch Sharif Mansion (1st Floor), Diakhali, Jamgora Bazar, Ashulia, Dhaka. Phone: 02 - 7788290, 7788326, 7788325 Fax: 02 - 7788291 Banani Branch House # 62, Block – E, Kemal Ataturk Avenue, Banani, Dhaka. Phone: 02 - 8815754, 9889868, 8854988, 8852899, 8850329, 8836890 Fax: 02 - 8853616 Banasree Branch Arcadia (1st Floor), Plot # 14, Block-C, Banasree Main Road, Rampura, Dhaka. Phone: 02 - 8399548, 8399591 Fax: 02 - 8399547 Bangshal Branch Holding # 23 (old), 4 (new), Mazed Sardar Road, Bangshal, Dhaka. Phone: 02 - 7123480, 9561501, 9556635, 7175185, 7113310 Fax: 02 - 7123480 Baridhara Branch Concord I. K Tower (1st Floor) Plot # 02, Block # CEN(A) North Avenue, Gulshan – 2, Dhaka. Phone: 02 - 9850376, 9850392 Fax: 02 - 9850384 Bashabo Branch Shapnil (2nd & 3rd Floor), 60-61 South Bashaboo, Dhaka. Phone: 02 - 7219201, 7219205, 7219206 Fax: 02 - 7219205
402
Ganakbari Branch Somsher Plaza (1st Floor), (Opposite Dhaka EPZ), Balibhadra Bazar Bus Stand,
Bhairab Bazar Branch, Kishoreganj 181, Tin Potty Road, Bhairab Pawrashava, Bhairab, Kishoregonj. Phone: 02 - 9470723, 9470771, 9470733 Fax: 02 - 9471755
Dhamsona, Ganakbari, Savar, Dhaka. Phone: 02 - 789863,7789378, 7789379, 7788100, 7788896 Fax: 02 - 7789378 Gareb-E-Newaz Avenue Branch
Bijoy Nagar Branch Akram Tower (1st Floor), 15/5 Bijoy Nagar, Dhaka. Phone: 02 - 9335732, 9335762, 9334123 Fax: 02 - 9332639 Boalmari Branch Ajhar Tower, 503 Station Road, Boalmari, Faridpur. Phone: 06324 - 56132, 56130 Fax: 06324 - 56139
Holding # 1, Gareb-E-Newaz Avenue, Sector # 11, Uttara R/A, Dhaka. Phone: 02 - 8950997, 8921161, 8991781 Fax: 02 - 8931687 Gulshan Branch Plot # 01, Block-CEN(H), Road # 109, Gulshan Avenue, Dhaka. Phone: 02 - 9890898, 9886171, 8815885, 8829975, 8817460, 9884977, 9862937, 8817460 Fax: 02 - 9884977
Damudya Branch Holding # 264 (1st & 2nd Floor), Sadar Road, Damudya, Shariatpur. Phone: 06023 - 56396 Fax: 06023 - 56390 Dhanmondi Branch Mamtaz Plaza (1st Floor), House # 7, Road # 4, Dhanmondi R/A, Dhaka. Phone: 02 - 8622304, 8621556, 9662704, 8621557 Fax: 02 - 9662705 Elephant Road Branch Ananta Plaza, 136, Elephant Road, Dhaka. Phone: 02 - 9662776-7, 8622592, 9673783, 9673786 Fax: 02 - 8622591 Faridpur Branch KMA Arcadia (1st Floor), Holding # 60/116/A, Moirapotty, Faridpur. Phone: 0631 - 65133 Fax: 0631 - 65128 Foreign Exchange Branch Al-Haj Mansion, 82, Motijheel C/A, Dhaka.
Hemayetpur Branch Madhu Bhaban, Hemayetpur, Savar, Dhaka. Phone: 02 - 7742096 Tele Fax: 02 - 7742096 Islamic Banking Branch, Dilkusha 19, Dilkusha Commercial Area, Dhaka. Phone: 02 - 9567227, 9514927, 9567228, 9587494, 9577582, 9576414, 9514928, 9587506 & 9551678 Fax: 02 - 9567228 Islamic Banking Branch, Mirpur Mamoni Tower, 1244 East Monipur, Begum Royeya Sarani, Mirpur, Dhaka. Phone: 02 - 9031711, 9030180 Fax: 02 - 9031700 Ibrahimpur Branch Sumona Sahadat Center, 80, Ibrahimpur, Kafrul, Dhaka. Phone: 02 - 8872503, 8872423, 8872557 Fax: 02 - 8872501 Jamalpur Branch Jibon Mansion, Station Road, Jamalpur. Phone: 0981 - 65361, 0981-65360 Tele Fax: 0981 - 65362
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Jatrabari Branch Nur Tower, 76/Ga, Bibir Bagicha,
Mohakhali Branch 69, Mohakhali C/A, Dhaka.
Patuatuly Branch Bishal Hafiz Market (1st & 2nd Floor),
North Jatrabari, Dhaka.
Phone: 02 - 9882291, 8826483, 8817210,
10, Wayse Ghate Road, Patuatuly, Dhaka.
Phone: 02 - 7552158, 7552178 Fax: 02 - 7552169
9850302, 9887188 Fax: 02 - 9886052
Phone: 02 - 7343474, 57396161 Fax: 02 - 57396161
Joydevpur Chowrasta Branch
Motijheel Branch
Pragati Sarani Branch
Shapla Mansion (1 Floor),
Adamjee Court Annexe Building-2,
Facilities Tower, Kha-199/2,
Joydevpur Chowrasta, Chandana,
119-120, Motijheel C/A, Dhaka.
Maddhya Badda, Dhaka.
Dhaka-Tangail Road, Gazipur. Phone: 02 - 9164103, 9264135
Phone: 02 - 9567265, 7175491, 9567225, 9559876, 9515341, 7175492, 9562982
Phone: 02 - 9840689, 8816938, 9840685 Fax: 02 - 8837531
Tele Fax: 02 - 9264097
Fax: 02 - 9567223
Joypara Branch Azahar Ali Mozahar Ali Shopping Complex, Latakhola, Joypara, Dohar, Dhaka. Phone: 02 - 7768053 & 7768054, 7768055 Fax: 02 - 7768052
Mouchak Branch Manhattan Tower (1st Floor),
Baitul Aman Tower (1st Floor),
83, Siddaswari Circular Road, Malibagh, Dhaka. Phone: 02 - 9347757, 8352832, 9360292, 8352831, 9360162 Fax: 02 - 9338883
Adabor, Dhaka. Phone: 02 - 8158866, 58150666 Fax: 02 - 8117010
st
Ring Road Branch
Kawran Bazar Branch 54, Kawran Bazar C/A, Dhaka. Phone: 02 - 9124296–7, 9145397 Fax: 02 - 9129004 Kaliakoir Branch Ahmed Ali Plaza (1st Floor), College Road, Kaliakoir, Gazipur. Phone: 06822 - 51622, 06822 - 51620 Fax: 06822 - 51621 Kishoregonj Branch Shamsuddin Bhuiyan Plaza, Teripotty, Kishoreganj. Phone: 0941 - 62590, 0941 - 62592 Fax: 0941 - 62591
Moulvi Bazar Branch 77/4, Moulvi Bazar, Dhaka. Phone: 02 - 7311017, 7313407, 7316696 Fax: 02 - 7318305 Mymensingh Branch 10, Swadeshi Bazar, Mymensingh. Phone: 091 - 52390, 62228, 52391, 62243 Tele Fax: 091 - 52391 Narayanganj Branch Modern Model Complex, 56, S.M.Maleh Road, Narayanganj. Phone: 02 - 7630150, 7646894 Fax: 02 - 7630140
Madhabdi Branch Plot # 17, Madhabdi Bazar, Narsingdi. Phone: 02 - 9446682, 9446683 Fax: 02 - 9446683
Nawabgonj Branch B.K.N. Point, Kasimpur, Nawabgonj, Dhaka. Phone: 02 - 7765298, 7765299 Fax: 02 - 7765297
Mirpur-1 Branch
New Eskaton Branch 133, New Eskaton Road, Dhaka. Phone: 02 - 9354738, 9354044, 9359683 Fax: 02 - 9354826
st
Rabiul Plaza (1 Floor), Plot # Shee-1/Kha, Section # 1, Mirpur, Dhaka. Phone: 02 - 8034590, 8034126, 8054007 Fax: 02 - 8034591 Mirzapur Brach Nazmul Traders Building, 1215 College Road, Mirzapur, Tangail. Phone: 09229 - 56591, 09229 - 56592 Fax: 09229 - 56593
Pallabi Branch Setara’s Dream, 1/11 & 1/12 Pallabi, Mirpur, Dhaka. Phone: 02 - 9000559, 02 - 9001913, 9013629 Fax: 02 - 9001813
Modhukhali Branch Modhuban Shopping Mall (1st Floor), Modhukhali, Faridpur. Phone: 06326 - 56018, 56017 Fax: 06326 - 56019
Panthapath Branch Firoz Tower, 152/3-B, Green Road, Panthapath, Dhaka. Phone: 02 - 9142879, 8128100, 8152852 Fax: 02 - 9137887
Holding # 840/841, Ring Road,
Sat Masjid Road Branch House # 99, Road # 11/A, Dhanmondi R/A, Dhaka. Phone: 02 - 9122374, 58153602, 9130466, 9135982, 58151936 Fax: 02 - 8121652 Savar Branch K.K. Plaza (1st Floor), A-91, Savar Bazar Road, Savar, Dhaka. Phone: 02 - 7744862, 7744861 Fax: 02 - 7744863 SBC Tower Branch Sadharan Bima Tower, 37/A, Dilkusha C/A, Dhaka. Phone: 02 - 9559943, 9571250, 9561221 Fax: 02 - 9564189 Sirajdikhan Branch Hazi Mustafa Plaza (1st Floor), Dag # 284, Bazar Road, Sirajdikhan, Munshiganj. Phone: 02 - 7628320, 7628381 Fax: 02 - 7628310 Shibpur Branch Khan Tower, Shibpur Bazar, Narsingdi. Phone: 06256 - 75130, 06256 - 75131 Fax: 06256 - 75134 Shimrail Branch Haji A. Rahman Super Market and Shopping Tower, Holding No. 96, Shimrail Morr, Chittagong Road Chowrastha, Siddirganj, Narayanganj. Phone: 02 - 7691670, 02 - 7692913, 7692912 Fax: 02 - 7691671 Sreenagar Branch Rahman Complex, Sreenagar Bazar, Munshigonj. Phone: 02 - 7627210, 7627202, 01730781191
403
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Tangail Branch Main Building, Ward # 6,
Brahmanbaria Branch K Das Bhaban,
Hathazari Branch N. Zahur Shopping Center (1st Floor),
Holding # 414-417, Main Road, Tangail.
K Das Square, Brahmanbaria.
Kachari Road, Hathazari, Chittagong.
Phone: 0921 - 61248, 0921 - 61271 Fax: 0921 - 61322
Phone: 0851 - 61698, 0851 - 61699 Fax: 0851 - 58849
Phone: 031 - 2601524, 031 - 2601525 Fax: 031 - 2601526
Tejgaon Branch
Chauddagram Branch
Islamic Banking Branch, O. R. Nizam Road
Shanta Western Tower (Level-2),
Abdul Gani Shopping Complex (1st Floor),
Hazrat Garibullah City Corporation
186, Bir Uttam Mir Shawkat Sarak,
Chauddagram Bazar, Comilla.
Bhaban (1st Floor),
Tejgaon, Dhaka. Phone: 02 - 8879157-8, 8879160
Phone: 08020 - 56364, 08020 - 56363 Fax: 08020 - 56362
739/804 CDA Avenue, O.R. Nizam Road,
Chaumuhani Branch
Fax: 031 - 2861434
Fax: 02 - 8879156 Tongi Branch Sena Kalyan Commercial Complex (1st Floor), Plot # 09, Block-F, Tongi, Gazipur. Phone: 02 - 9813811, 9813874 Fax: 02 - 9813835 Uttara Branch Siaam Tower (1st Floor), Plot # 15, Sector # 03, Dhaka Mymensingh Road, Uttara Model Town, Dhaka. Phone: 02 - 58956233, 02 - 8950341-2, 8950016 Fax: 02 - 58954248 Wari Branch Tanin Roseate, 43 Rankin Street, Wari, Dhaka. Phone: 02 - 9512085, 7118169, 7118311 Fax: 02 - 9512084 Chittagong Division Agrabad Branch B.M. Heights (1st Floor), 318 Sheikh Mujib Road, Badamtoli, Agrabad, Chittagong. Phone: 031 - 716724-5, 2521659, 2526396, 2526397, 727018, 710970, 2526160 Fax: 031 - 718971 Ashugonj Branch Seriya Sayed Tower, Post Office Road, Ashugonj Bazar, Ashugonj, Brahamanbaria. Phone: 08528 - 74596, 08528 - 74595 Fax: 08528 - 74594 Banshkhali Branch G.S. Plaza (1st floor), Chittagong-Banshkhali Highway, Jaldi, Banshkhali, Chittagong. Phone: 0303 - 756222 Fax: 0303 - 756223 Bhatiary Branch Khaleque Tower, Bhatiary, Sitakunda, Chittagong. Phone: 08528 - 74596, 08528 - 74595 Fax: 08528 - 74594
404
Bagmoniram, Chittagong. Phone: 031 - 639855, 2861437
Holding # 180-182 (1st Floor), Feni Road, Chaumuhani, Begumganj, Noakhali. Phone: 0321 - 54096 Fax: 0321 - 56096 Comilla Branch 10/8 & 9/7 Chatipatti (1st Floor), Rajgonj, Comilla. Phone: 081 - 72611, 72612 Fax: 081 - 72646 Cox’s Bazar Branch Hajera Shopping Center, Holding # 256, Main Road, Cox’s Bazar. Phone: 0341- 51085,0341- 51083 Fax: 0341- 51084 Dagonbhuiyan Branch R.B Plaza, 391 Falizer Ghat, Dagonbhuiyan, Feni Phone: 03323 - 79248, Direct: 0332379249 Fax: 03323 - 79250 Fatickchari Branch Haji Hossain Plaza, College Road, Bibirhat Dhurang Union, Fatickchari, Chittagong. Phone: 03022 - 56006 Tele Fax: 03022 - 56006 Feni Branch Kazi Center, Holding # 106, S. S. K. Road, Feni. Phone: 0331 - 63091, 63093, 0331 - 63092 Tele Fax: 0331 - 63092 Hajigonj Branch Ananda Complex, Holding # 191, Hajiganj Bazar, Hajiganj, Chandpur. Phone: 08424 - 75110, 08424 - 75111 Fax: 08424 - 75111 Halishahar Branch Nandita House, Plot # 5/A, Lane # 2, Road # 2, Block-G, Halishahar Housing Estate, Chittagong. Phone: 031 - 2512039, 031 - 2512064 Fax: 031 - 2512054
IBB Pahartali Branch B S Plaza, Plot # 305/1390 Abdul Ali Hat, Sorai Para Alanker More, Pahartali, Chittagong. Phone: 031 - 753143, 031 - 2771751-2, 2773541-2 Fax: 031 - 753144 Jubilee Road Branch Pedrollo Plaza, 5, Jubilee Road, Chittagong. Phone: 031 - 613939, 031 - 614649, 031 - 2850319, 031 - 613650 Fax: 031 - 618689 Karnaphuli EPZ Branch Karnaphuli EPZ, North Patenga, Chittagong. Phone: 031 - 2502382, 031 - 2502381 Fax: 031 - 2502383 Keranihat Branch Hazi Ulamia Market (1st Floor), Keranihat, Satkania, Chittagong. Phone: 03036 - 56134, 03036 - 56133 Fax: 03036 - 56135 Khatungonj Branch 142, Chand Mia Lane, Khatunganj, Chittagong. Phone: 031 - 623213-14, 031 - 623212, 627297 Fax: 031 - 610848 Laldighi East Branch 8, Laldighi East, Chittagong, Phone: 031 - 2850773, 2850774, 031 - 2850771 Fax: 031 - 2850772 Muradpur Branch Shah Alam Plaza, 129, CDA Avenue, Muradpur, Chittagong. Phone: 031 - 652505, 031 - 652503 Fax: 031 - 652504
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fina ncia l Sta tements
Oxygen More Branch 405 Sekander Center, Chittagong
Naogaon Branch Jagannath Bhaban (1st & 2nd Floor),
Cantonment, Oxygen More, Chittagong.
Holding # 320, Main Road,
Phone: 031 - 2583181, 031 - 2584181, 031 - 2584180
Bridge-er-More, Naogaon. Phone: 0741 - 62150, 0741 - 62151
Fax: 031 - 2583180
Fax: 0741 - 62152
Prabartak More Branch
Natore Branch
12/12 O. R. Nizam Road, Prabartak More,
1052, Kanaikhali,
Panchlaish, Chittagong.
Dhaka-Rajshahi Highway, Natore.
Phone: 031 - 2553593, 031 - 2553591-2 Fax: 031 - 2553594
Phone: 0771 - 67001 Fax: 0771 - 67002
Race Course Branch Anandodhara Hamidum Mazid Plaza, Holding # 1369/1, Race Course, Comilla. Phone: 081 - 73964, 081 - 73963 Fax: 081 - 73965
Pabna Branch 423/1, Sonapatty Road, Pabna. Phone: 0731 - 66426, 0731 - 66425 Fax: 0731 - 66399
Raozan Branch Fazal Tower (1st Floor), Jalil Nagar, Raozan, Chittagong. Phone: 03026 - 56214, 03026 - 56168 Fax: 03026 - 56215 Baneswar Branch Baneswar, Puthia, Rajshahi. Phone: 08224 - 56017, 038911 - 82480 Fax: 08224 - 56004
Rajshahi Branch 138/144, Shaheb Bazar, Rajshahi. Phone: 0721 - 773981, 774582, 774583 Fax: 0721 - 773980 Sherpur Branch Azhar Complex (1st Floor), Sherpur Bus Stand, Sherpur, Bogra. Phone: 05029 - 77229, 05029 - 77228 Fax: 05029 - 77225 Sylhet Division
Bogra Branch 331/364, Rangpur Road, Borogola, Bogra. Phone: 051 - 78203, 67172 Fax: 051 - 61142 Chapai Nawabganj Branch Holding No. 29 (1st Floor), Islampur, Daudpur Road, Bara Indira Moor, Chapai Nawabgonj. Phone: 0781 - 51125, 0781 - 51126 Fax: 0781 - 51127 Ishwardi Branch Holding # 1335/982, Puraton Bazar, Ishwardi, Pabna. Phone: 07326 - 64435, 07326 - 64650 Fax: 07326 - 64436
Barelekha Branch Hazi Abdul Ali Trade Center, 842, Barelekha Pawrashava, Barelekha, Moulvi bazar. Phone: 08622 - 56519, 08622 - 56520 Fax: 08622 - 56522 Beanibazar Branch Zaman Plaza (1st Floor), Beanibazar, Sylhet. Phone: 08223 - 56139, 08223 - 56140 Fax: 08223 - 56141 Biswanath Branch Al-Burak Shopping Center (1st Floor), Biswanath Bazar, Biswanath, Sylhet. Phone: 08224 - 56017, 038911 - 82480 Fax: 08224 - 56004
Joypurhat Branch Tahera Complex, 306 Main Road, Joypurhat. Phone: 0571 - 51156, 0571 - 51157 Fax: 0571 - 51158
Court Road Branch Court Road, Moulvi Bazar. Phone: 0861 - 53877, 0861 - 53878, 64940 Fax: 0861 - 53878
Mohadebpur Branch Charmatha Boker More, Bridge Road, Mohadebpur, Naogaon Phone: 07426 - 75041, 07426 - 75088 Fax: 07426 - 75044
Dhaka Dakshin Branch Bakul Mansion (1st Floor), College Road, Golapganj, Sylhet. Phone: 08227 - 56180, 08227 - 56187 Fax: 08227 - 56308
Fenchugonj Branch Akul Shah Shopping City (1st Floor), Thana Road Point, Fenchugonj Bazar Fenchugonj, Sylhet. Phone: 08226 - 56415, 08226 - 56414 Fax: 08226 - 56416 Habigonj Branch Holding # 3794, Commercial Area, Habiganj. Phone: 0831 - 62814, 0831 - 62813 Fax: 0831 - 62815 IBB Amberkhana Branch Kasablanca Tower (1st Floor), 982, Dargah Gate, Sylhet. Phone: 0821 - 717332, 0821 - 728944 Fax: 0821 - 717337 Islampur Branch Century Park (1st Floor), Majortila, Sylhet. Phone: 0821 - 761174, 0821 - 761157 Fax: 0821 - 761115 Kadamtali Branch Motin Complex, Fenchugonj Road, Kadamtali, South Surma, Sylhet. Phone: 0821 - 728910, Direct: 0821 841319 Fax: 0821 - 728630 Kulaura Branch Marina Square, 232, Dakkhin Bazar, Kulaura, Moulvi bazar. Phone: 08624 - 57082, 08624 - 57081 Fax: 08624 - 57080 Nabiganj Branch Anowara Biponi, Osmani Road, Nabiganj, Habiganj. Phone: 08328 - 56025, 08328 - 56029 Fax: 08328 - 56015 Sreemangal Branch Saptadinga Complex (1st Floor), 145, Moulvibazar Road, Sreemangal, Moulvi bazar. Phone: 08626 - 71183, 08626 - 71181 Fax: 08626 - 71182 Subid Bazar Branch Corner View (1st Floor, West side), 980, Subidbazar, Sylhet. Phone: 0821 - 727688, 0821 - 727629 Tele Fax: 0821 - 2830942 Sunamganj Branch Subakth Raja Complex, 414 Old Station Road, Sunamganj. Phone: 0871 - 62516, 0871 â&#x20AC;&#x201C; 62515 Fax: 0871- 62514
405
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Fi na n c i a l S t a t e m en ts
Sylhet Branch Laldighirpar, Sylhet. Phone: 0821 - 721127, 0821 - 710208 Fax: 0821 - 710673 Tajpur Branch Maya View Super Market (1st Floor), Tajpur, Osmaninagar, Balaganj, Sylhet. Phone: 08242 - 56211, 08242 - 56210 Fax: 08242 - 56212 Upashahar Branch Alif Center (1st Floor-Front Portion), Subhanighat, Upashahar, Sylhet Phone: 0821 - 723524, 0821 - 811366 Fax: 0821 - 710094 Khulna Division Daulatpur Branch Akankha Tower, 454, Khan-A-Sabur Road, Daulatpur, Khulna. Phone: 041 - 2850877, 041 - 2850876 Fax: 041 - 2850875 Jessore Branch 47, Netaji Subhas Chandra Road, Jessore Town, Jessore. Phone: 0421 - 68815, 0421 - 68814 Fax: 0421 - 68816
Dinajpur Branch Mazeda Plaza (1st Floor), 518/473 Ganashtala (near Fire Bridge), Jail Road, Dinajpur. Phone: 0531 - 51289, 0531 - 51291 Fax: 0531 - 51296 Hatibandha Branch Arif Plaza, Medical More, Hatibandha, Lalmonirhat. Phone: 5923 - 56101, 5923 - 56102 Fax: 5923 - 56103 Rangpur Branch Shah-Amanat Super Market (1st Floor), 268 Station Road, Jahaj Companier More, Rangpur. Phone: 0521 - 64119, 0521 - 64120 Fax: 0521 - 64118 Saidpur Branch Ali Plaza, Shahid Dr. Zikrul Haque Road, Saidpur, Nilphamari. Phone: 05526 - 71202, 05526 - 71201 Fax: 05526 - 71203 SME Branches
Khulna Branch 7, Old Jessore Road, Khulna Phone: 041 - 725100, 811459, 041 - 720071 Fax: 041 - 731195
Aganagar SME/Agri. Branch Golden Plaza, Purbo Aganagar, Keranigonj, Dhaka. Phone: 02 - 9571896 Tele Fax: 02 - 9571896
Kushtia Branch Bangabandhu Super Market,
Bhujpur SME Branch
2, N S Road, Kushtia. Phone: 071 - 72431, 071 - 72432 Fax: 071 - 72430 Magura Branch Monowara Complex (1st Floor), 219 Syed Ator Ali Road, Magura Sadar, Magura. Phone: 0488 - 51005, 0488 - 51105 Fax: 0488 - 51200 Satkhira Branch Islam Plaza, 0801/00, Abul Kashem Road, Satkhira. Phone: 0471 - 62450, 0471 - 63007 Fax: 0471 - 63001 Barisal Division Barisal Branch 37, Hemayet Uddin Road, Barisal. Phone: 0431 - 64011, 0431 - 64012 Fax: 0431- 63712
406
Rangpur Division
Mokka Shoping Center (1st Floor), Kazirhat, East Bhujpur, Fatickchari, Chittagong. Mobile: 01713255771 Chatkhil SME/Agri Branch Mamtaz Shopping Center, CNB Road (North side), Chatkhil, Noakhali. Phone: 03222 - 75113 Fax: 03222 - 75119 Companygonj SME Branch Mother Shopping Complex (1st Floor), Trish, Companygonj, Muradpur, Comilla. Phone: 02 - 659090 Fax: 02 - 659090 Heyako Bazar SME Branch Chowdhury Market (1st Floor), Heyako Bazar, Bhujpur, Fatickchari, Chittagong. Mobile: 01730794626
Jhikorgacha SME/Agri Branch Zaman Market (1st Floor), Holding No. 522, Jhikorgacha, Jessore. Phone: 04225 - 71780 Fax: 04225 - 71788 Madhabpur SME/Agri. Branch Madhabpur Purbo Bazar, Dhaka Sylhet Highway, Madhabpur, Habiganj. Phone: 08327 - 56342 Fax: 08327 - 56343 Madunaghat SME/Agri. Branch Mabia Emporium, Madunaghat Bazar, Hathazari, Chittagong Phone: 031 - 2573206 Fax: 031 - 2573205 Narsingdi SME/Ag. Branch BS Plaza (1st Floor), 9 Uttar Kandha Para, Bazirmore, Narsingdi. Phone: 02 - 9463343 Nawabpur SME Service Center Mollick Plaza (2nd Floor), 243-244, Nawabpur Road, Dhaka. Phone: 02 - 9571896 Tele Fax: 02 - 9571896 Posta SME Service Center 90, Water Tank Road, Posta Lalbag, Dhaka. Phone: 02 - 7343663 Poradaha SME/Agri Branch. Sikder Super Market (1st Floor), Poradaha Puraton Bazar, Mirpur, Kushtia. Mobile: 01730-373919 Raipur SME SME/Agri. Branch Queen Complex, Holding # 514/15, Main Road, Raipur, Laxmipur. Phone: 03822 - 56396 Fax: 03822 - 56397 Sherpur SME/Agri. Branch 819 Municipal Road, Chakbazar, Sherpur. Phone: 0931 - 62176 Fax: 0931 - 62175 Sonargaon SME/Agri. Branch Rozzab Ali Mansion, Mograpara Chowrasta, Habibpur, Sonagaon, Narayanganj. Phone: 02 - 7656359 Fax: 02 - 76 56362
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Syedpur SME/Agri. Branch Radhis Shopping Complex, Syedpur, Jagannathpur, Sunamgonj Mobile: 01713255776 Takerhat SME/Agri. Branch Haji Lalchand Bepari Super Market, Takerhat, Rajoir, Madaripur. Phone: 6623 - 56377, 6623 - 56338 Thakurgaon SME/Ag. Brranch Chowdhury Complex, 272 College Road, Thakurgaon. Phone: 0561 - 52295 Fax: 0561 - 52538 Offshore Banking Units Off-shore Banking Unit, Chittagong Export Processing Zone Zone Services Building, Ground Floor, West Wing South Block, CEPZ, Chittagong. Tel: 031 - 741341, 01714-116174 Fax: 031 - 741330 Offshore Banking Unit, Adamjee Export Processing Zone Adamjee EPZ Holding # 4, Siddirganj, Narayanganj. Tel: 02 - 7692024-5 Email: pbladamjee@primebank.com.bd Fax: 02 - 7692027 Offshore Banking Unit, Dhaka Export Processing Zone Room No: 75-76, 3rd Floor, Zone Service Building, Dhaka Export Processing Zone, Savar, Dhaka. Tel: 02 - 7788240 Fax: 02 - 7788241 E-mail: obu_depz@primebank.com.bd, mhossain@primebank.com.bd
Fina ncia l Sta tements
Overseas Network Prime Exchange Company (Pte) Limited, Singapore Main Branch 2A Desker Road, (2nd Floor), Singapore 209549 Tel: (+65) 6392 4996, (+65) 6392 4829 Fax: (+65) 6392 4838 email: primex@singnet.com.sg Jurong East Branch Block: 134, # 01-305 Jurong Gateway Road, Singapore 600134 Tel: (65) 68994647 Fax: (65) 65617559 PBL Exchange (UK) Ltd Email: pbl.ex.uk@primebank.com.bd Website: www.pblexchange.co.uk London Branch 16 Brick Lane London E1 6RF Tel: 0207 650 0005 Mob: 0207 247 3077 Oldham Branch 104 Featherstall Road, North Oldham, OL9 6BX Mob: 0795 667 5297 Tel: 0161 652 2444 Fax: 0161 620 6303 Birmingham Branch 493 Coventry Road Birmingham, B10 0JS Tel: 01217735553 Cell: 0795 667 5296 Fax: 0121 772 7646
PBL Finance(Hong Kong) Limited Suite 1407, 14/F Admiralty Centre Tower One, 18 Harcourt Road, Hong Kong. Tel: +852 25292710, +852 25292719 Cell: +852 6314 3205, +852 6311 2080 Email: mmhossain@pblfinancehk.com, masud@pblfinancehk.com, pbl.finance. hk@primebank.com.bd Local Subsidiaries Prime Bank Investment Ltd. Peoples Insurance Bhaban (11th Floor), 36 Dilkusha C/A, Dhaka â&#x20AC;&#x201C; 1000. Phone: +88 02 9555674, +88 02 9557688 Fax: +88 02 9559257 Email: pbil.bd@gmail.com, mbid@primebank.com.bd
Prime Bank Securities Limited 29 Rajuk Avenue (3rd Floor) Motijheel C/A, Dhaka - 1000. Phone: +880-2-9513396-7 Fax: +880-2-9566912 Email: pbsl@primebank.com.bd Web: www.pbsl.com.bd Prime Bank Foundation House No. # 08 (2nd Floor), Road No. # 19/A, Block - E, Banani, Dhaka - 1213. PABX: 8813788, 8813800 Direct Phone: 8828900 Fax: 9883982 Web: www.primebankfoundation.org
407
Fi na n c i a l S t a t e m en ts
LIST OF ABBREVIATIONS
408
AD
Authorized Dealer
ALCO
Asset Liability Committee
ATM
Automated Teller Machine
BB
Bangladesh Bank (Central Bank of Bangladesh)
B/L
Bad/Loss
BAS
Bangladesh Accounting Standards
BIBM
Bangladesh Institute of Bank Management
CRR
Cash Reserve Requirement
CRG
Credit Risk Grading
CSR
Corporate Social Responsibility
CPI
Consumer Price Index
CDBL
Central Depository Bangladesh Limited
CBS
Core Banking Software
CRISL
Credit Rating and Information Services Ltd.
DCFCL
Departmental Control Function Check List
DEPZ
Dhaka Export Processing Zone
DP
Depository Participants
EPS
Earning Per Share
EPZ
Export Processing Zone
FY
Fiscal Year (July to June)
GDP
Gross Domestic Product
GRI
Global Reporting Initiative
HOB
Head of Branch
ICAB
Institute of Chartered Accountants of Bangladesh
IT
Information Technology
IMF
International Monetary Fund
IAS
International Accounting Standards
IPO
Initial Public Offering
LC
Letter of Credit
MBID
Merchant Banking and Investment Division
MTMF
Medium Term Macro Economic Framework
MANCOM
Management Committee
NII
Net Interest Income
NPL
Non Performing Loan
NCBs
Nationalized Commercial Banks
OBU
Offshore Banking Unit
PCBs
Private Commercial Banks
PBL
Prime Bank Limited
PECL
Prime Exchange Co. Pte. Ltd.
PBIL
Prime Bank Investment Ltd.
PBSL
Prime Bank Securities Ltd.
POS
Point of Sale
PV
Present Value
RWA
Risk Weighted Assets
RMG
Readymade Garments
ROA
Return on Assets (excluding contingent items)
ROE
Return on Equity
R&D
Research and Development
ROD
Rights Share Offer Document
SAFA
South Asian Federation of Accountants
SME
Small and Medium Enterprise
SOP
Standard Operating Procedure
SLR
Statutory Liquidity Ratio
PRIME BANK A N N UA L R E P O RT 2 0 1 5
Head Office: Adamjee Court Annex Building-2, 119-120, Motijheel C/A, Dhaka-1000, Bangladesh Phone: 9567265, 9570747-8 PABX, Fax: 880-2-9567230, 9560977, 9566215, 9560960 Telex: 642459 PRIME BJ , 671543 PBL MJ BJ E-mail: info@primebank.com.bd. Web Site: www.primebank.com.bd SWIFT: PRBLBDDH