OVERVIEW OF AGRANI BANK LIMITED : FINANCIAL STATEMENT ANALYSIS OVERVIEW OF THE BANK HISTORICAL BACKGROUND Agrani Bank, a leading nationalized commercial bank with 891 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents, came into being on March 26, 1972 with the promulgation of Presidential Order no 26 of 1972. Under the Order Agrani Bank took over assets and liabilities of the erstwhile Habib Bank Ltd. and Commerce Bank Ltd. functioning in the then East Pakistan. The Bank enjoys the status of a company and functions in terms of the Banking Company Ordinance and regulations of Bangladesh Bank (the Central Bank) and upon such directions as may be changed from time to time by the Government of the People's Republic of Bangladesh. The Bank, in 1972, started operation with only 249 branches with its Head Office in Dhaka. There was hardly any liquid asset to run the operation of the Bank smoothly. The Bank resumed its operational activities with an authorized capital of Tk. 5.00crore and paid-up capital of Tk. 1.00crore. Initially the Bank had deposit of Tk. 96.17crore, advances of Tk. 76.56crore, borrowings of Tk. 29.48crore and investment of Tk. 11.00crore. The Bank had commercial relationship with only 41 overseas correspondents in 1972. Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents, came into being as a Public Limited Company on May 17, 2007 with a view to take over the business, assets, liabilities, rights and obligations of the Agrani Bank which emerged as a nationalized commercial bank in 1972 immediately after the emergence of Bangladesh as an independent state. Agrani Bank Limited started functioning as a going concern basis through a Vendors Agreement signed between the ministry of finance, Government of the People's Republic of Bangladesh on behalf of the former Agrani Bank and the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect from 01 July, 2007. THE BANK'S VISION, MISSION
AND
OBJECTIVES
Vision: To become a leading bank of Bangladesh operating at international level of efficiency, quality and customer service. Mission: We operate ethically and fairly within the stringent framework set by our regulators. We fuse ideas and lessons from best practice to explore new avenues to become stronger, more efficient and competitive. We apply information and communication technology for the benefit of our customers and employees. We invest to strengthen the future of the Bank. Principle Objectives: 1. To mobilize national savings
2. To finance industries, micro-enterprises, trades, commerce, agriculture and productive undertakings
other
3. To provide any other banking services as required for socio-economic development of the country The policy direction and overall management of the Bank is vested upon the Board of Directors consisting of six members. The Chairman and Members of the Board are appointed by the Government of the People's Republic of Bangladesh. Managing Director, the Chief Executive of the Bank, is one of the members of the Board of Directors. Managing Director is assisted by Deputy Managing Director and General Managers. The Bank has eight Circle Offices, 30 Divisions and Units in Head Office, 54 Zonal Offices, and 872 Branches including 10 Corporate and 30 AD (Authorized Dealer) Branches. The Corporate and AD Branches are authorized to deal in Foreign Exchange Business. Head Office Divisions are headed by Deputy General Managers and controlled by designated General Managers. The Circle Offices are headed by General Managers and the Zonal Offices by Deputy General Managers or Assistant General Managers, depending on size and importance of the Zones from the commercial point of view. The Corporate Branches and AD Branches are headed by Deputy General Managers or Assistant General Managers. BOARD OF DIRECTORS Dr. Khondoker Bazlul Hoque Chairman Mr. Ranjit Kumar Chakraborty Director Mr. Shekhar Dutta Director Mr. Nagibul Islam Dipu Director Engr. Md. Abdus Sabur Director Barrister Zakir Ahammad Director Mr. Shahjada Mohiuddin Director Mr. Abduz Jahir Chowdhury (Sufian) Director Mr. K.M.N. Manjurul Hoque Lablu Director Mr. A.K. Gulam Kibria, FCA Director
Mrs. Luna Shamsuddoha Director Mr. Syed Bazlul Karim, BPM Director Mr. Syed Abdul Hamid Managing Director & CEO HIERARCHY
OF
AGRANI BANK LTD.
Hierarchy of Agrani Bank Board of Directors Chairman Directors Managing Director Deputy Managing Director General Managers Deputy General Managers Assistant General Managers Senior Principal Officers Principal Officers Senior Officers Officers/Officers (Cash) Attorney Assistance Officers Clerical Staff Members Non-Clerical Staff Members
Source: Agrani Bank Ltd. Annual report-2009 PRODUCTS DEPOSITS Agrani Bank Limited offers to their clients a variety of Deposit Schemes with personalized services at competitive rates of interest. Any Bangladeshi citizen can open his/her account for any deposit scheme at any of its Branches strategically located throughout Bangladesh. The Bank with its huge network of 867 branches garners savings from both the rich and the poor in urban as well as rural areas. Even a poor farmer in a remote village, with his meager annual income, feels secure to safekeep his minuscule savings in Agrani Bank Ltd. Why? Because Agrani Bank Limited., as a state-owned bank, has a long heritage of trust and professional commitment Schemes Interest Rate Savings Account 4.00% Short Notice Term Deposit (SNTD) Account 3.50% Term Deposit Accounts Fixed Deposit Receipt (FDR) a) For 3 months & above, but less than 6 months 7.25% For any amount b) For 6 months & above, but less than 1 year 7.50% For any amount c) For 1 year & above 8.00% For any amount less than Tk.10.00 crore d) For 1 year & above 8.25% For any amount between Tk.10.00 crore and Tk.50.00 crore e) For 1 year & above 8.50% For any amount greater than Tk.50.00 crore Agrani Bank Pension Scheme Term Monthly Deposit Rate of Interest 5 years TK 100 To TK 500 7.00% 10 years TK 100 To TK 500 9.00% Agrani Bank Special Deposit Scheme Term Monthly Deposit Rate of Interest 5 years TK 1000 To TK 10000 8.00% 10 years TK 1000 To TK 10000 9.00% Besides Savings Accounts, Agrani Bank Limited offers personalised services to businessmen who maintain Current Accounts with any Branch. Though a Current Account does not earn any interest, the Account Holder enjoys a lot of benefits. Only Current Account Holders can apply for any loan offered by Agrani Bank Limited, if the Account Holder has excellent track records in banking as well as business arenas. Current Account Holder can draw money from his/her account at any frequency. ATM CARD Account Holders of Agrani Bank Limited can now avoid the risk of carrying cash by subscribing to our Automated Teller Machine (ATM) Service. ATM Card Holders can draw cash from any ATM location and also enjoy other services like paying a variety of utility bills
like those of BTTB, AKTEL and Grameen Phone through ATM service. The service is open round the clock in all the days including holidays. The ATM cardholder can enquire about the balance of his/her ATM Account from any outlet at any moment. Cash withdrawal of TK. 500, to TK 10,000 can be made from ATMs. Maximum cash withdrawal limit is TK 10,000 at a time and TK 20,000 in a day. Maximum 10 transactions can be made in a day. Agrani Bank Limited's ATM Account Holders can enjoy the services from the "shared network arrangement" with other Banks: ADVANCES Agrani Bank Limited, as a state owned commercial bank, has to play a pivotal role in translating the government's development plans in terms of growth in industrial, commercial and agricultural sectors in Bangladesh. Accordingly the Bank has formulated its Credit Policy under the guidelines of Bangladesh Bank-the Central Bank of Bangladesh. The bank provides credit facilities in following broad areas: GENERAL CREDIT Agrani Bank Limited delivers credit facilities to any businessman or trader engaged in any commercial activity having productive purposes that should contribute to economic growth of the country. Loan pricing system is customer friendly and prime customers enjoy rebates in repayment of loans. 3.2.2.2. SME Loan Considering the volume, role and contribution of SMEs, in the last two decades Agrani Bank Ltd. has been patronizing this sector by extending credit facilities of different types and tenor. Beyond conventional banking the bank has also been participating in several SME programs through its own efforts and its and in collaboration with different national and international agencies like bureau of manpower employment and training, Bangladesh rural development board, Bangladesh small and cottage industries corporation, NGOS, BRAC, international fund for agricultural development etc. As such the bank has emphasized on the following issues •
To provide the best services to the SME sector.
•
To increase the SME portfolio of Agrani Bank Ltd. significantly.
•
To improve the quality of Agrani bank Ltd. portfolio.
SME sectors in which Agrani Bank Ltd. has participated so far:
SME Financing Poultry Dairy Product Hotel & Restaurants Agro sector Plastic product Ink Printing & Packaging Aluminum Clinics and Hospitals
Animal Feed Fruit Preservation Garments Accessories Leather Products Furniture: wooden & Metal paint Wire & Cable Cement and Lime Plaster Engineering & Scientific Instruments
3.2.2.3. INDUSTRIAL CREDIT The Bank extends loans to big entrepreneurs and also to small and medium industrial ventures to boost up overall investment in the industrial sector of the country. The Bank offers financing on easy terms to the following "Thrust Sectors": Agro-based industries, Computer Software & IT, Electronics, Artificial flower, Frozen food, Gift item, Export oriented, leather goods, Jute goods, Export oriented nontraditional agro product, Jewelry and Diamond, cutting & polishing, Silk worm cultivation & silk industry, Stuffed toys, (except RMG), Textile industry, Oil & Gas Agrani Bank Ltd. provides credits also to the following sectors: Fisheries, Cold Storage, Rice mill, Fish Processing, Dairy, Poultry, Ice Factory, Food & Allied, Pharmaceuticals, Plastic products, Rubber products, Cement, Ceramics, Paper, Printing, Packaging, Bricks, Hospital & Clinic, Salt Industry, Hotel, Soap & Detergent, Pharmacy, Polyethene, Ballpen, Specialized Textile, Forest & Allied. RURAL CREDIT Since nationalization in 1972 and the Bank's involvement in financing agricultural sector in 1977, Agrani Bank Limited has been reinforcing efforts of the government to meet its strategic objective of increasing production, output and employment through undertaking different agricultural credit programmes / projects. Some of these programmes / projects are outlined below for understanding the role of Agrani Bank Limited in increasing agricultural production & poverty alleviations 1. Crop loan programs : To help increase food grain and other crop production of the country by way of providing credit to farmers, this program was under taken in 1977. Up to June/2009, an amount of
TK.1567.76 core has been disbursed in favor of 27,76,995 borrowers. Recovery rate is 81% (cumulative). 2. Crop Diversification Project: This Program was undertaken to achieve self-dependency on food production and to fulfill the demand of balanced diet of our people. The project is running with the help of Bangladesh, Canada and Netherlands Government. An amount of TK. 8.92 core has been disbursed among 9116 borrowers up to June, 2009. Cumulative recovery rate is 78%. 3. Shrimp Culture Programs ( General): This credit program was introduced by the Bank in 1980. This particular credit program is designed to increase shrimp production by providing loans to shrimp cultivators in Cox's Bazar, Khulna, Satkhira, Bagerhat. Disbursement up to June, 2009 is Tk. 117.88 core. among 8487 borrowers. Cumulative recovery rate is 94%. 4. Semi -intensive shrimp culture programme: For production of more shrimp by using modern technology, semi intensive shrimp culture program was introduced in 1993 with the aim of gaining more foreign currency. In initial phase credit facilities were extended for shrimp production only but subsequently its coverage was extended to the fresh water areas of the country. This loan is treated as industrial credit and all related facilities are enjoyed by the borrowers. Up to June, 2009 an amount of Tk. 7.80 crore has been disbursed among 213 loanees. Cumulative recovery rate is 76%. 5.Fisheries Financing Programme: This programme was undertaken in 1978 , aiming to provide credit for sweet water fish culture in re-excavated ponds. Upto June, 2007 a total loan of Tk. 8.50 crore has been disbursed among 3,206 borrowers. Cumulative recovery rate is 89%. 6. Credit for Irrigation Equipment: Since 1977, the Bank is providing credit to the farmers to purchase irrigation equipment (DTW, STW, Rower pump, Treadle pump etc) in order to help increase crop production by utilizing both surface and underground water through irrigation. An amount of Tk. 13.21 crores has been disbursed to 5,376 borrowers up to June, 2009. Cumulative recovery rate is 90%. 7. Agricultural Equipment Project: This program was undertaken in 1989-90 to increase food production by using modern technology. An individual or a group of farmers can buy tractor/power tiller under this loan program. An amount of Tk. 3.14 crore has been disbursed to 514 borrowers up to June 2009. Cumulative recovery rate is 90%.
8. Credit Scheme for Bananas Cultivation: To boost up cultivation of Banana in the country, this scheme was introduced in 1980, Upto June, 2009 a total of Tk. 4.80 crore has been disbursed to 2291 borrowers. Cumulative recovery rate is 85%. 9. Credit to Salt Growers: To increase salt production by providing credit to salt growers of the coastal areas of Chittagong and Cox's Bazar Districts, this program was undertaken by the Bank in 1977-78 . Up to June, 2009 Tk. 3.38 crore has been disbursed to 6803 borrowers. Cumulative recovery rate is 80%. 10.Daridra Bimochon Karmasuchi (DABIK) : In collaboration with the Ministry of Youth and Sports, this program was undertaken in 1990 to work in 10 selected Police Stations. Since November, 1995, however, the program is being implemented as the Bank's own program and the management of the Bank decided to involve the senior executives like DGMs & AGMs to implement this program in their own villages or in areas of their choice under their supervision. Landless rural poor owning land (including homestead) upto 0.50 acre can avail of credit facilities being a member of the 5-member group formed under this project. A wide range of activities are being financed under this program viz. mini poultry, beef-fattening, rural transport, handicrafts, small business, tailoring, fishery, nursery, vegetable production, food processing etc. Credits are extended for a maximum amount of Tk.10,000/= without collateral and the interest rate is 10%. Up to June, 2009 around 31,122 members of the groups formed under the project have availed of the credit facilities amounting to Tk.20.91 crore and recovery rate is 77% (cumulative). 11. Productive Employment Project (PEP): This project was undertaken by the Bank in 1988 in association with Bangladesh Rural Development Board (BRDB) with financial assistance from Norwegian Agency for Development (NORAD) and Swedish International Development Agency (SIDA). The main objective of the Project was to develop the socio-economic condition of the rural poor of 20 thanas of Faridpur , Rajbari, Madaripur, Gopalgonj and Shariatpur district . NORAD/SIDA provides 33% to 50% and Bank provides 50% to 67% of the credit fund. Maximum limit of credit under the project for individual is Tk.6000 for the first time and Tk. 12,000 for the 2nd time and onwards. Maximum limit of credit under the project for group was Tk. 1,00,000 . No collateral is required to avail of loan under the project. All loans sanctioned under the project was maximum period of one year, for special cases loan period was 18 months. Rate of interest under the project was 16% per annum. A total amount of Tk.195.86 crore has been extended as loan to around 3,37,162 group members up to project period and recovery rate is 99% (cumulative). Upto June, 2009. The project is closed as on June, 2002 . It may mentioned here that after the completion of the project in June/2000, an agreement was signed on 31-07-2000 between Agrani Bank and BRDB. According to the agreement, from July /2000 the Project was run by BRDB. BRDB is to recover and return the outstanding amount of Bank's portion . 12. Marginal and Small Farm Systems Crop Intensification Project ( MSFSCIP ) IFAD Loan no.-194-BD.
This project was undertaken by the Bank along with other NCB's in 1990 in association with Bangladesh Bank, Rangpur Dinajpur Rural Services (RDRS) GTZ, and IFAD. Credits provided by the Bank are re-financed by Bangladesh Bank out of the credit fund provided by IFAD while GTZ provides the technical assistance to the concerned institutions involved in implementation of the project. RDRS provides field services in formation & promotion of the Self Help Groups (SHGs) comprising of 15-20 beneficiaries. The project is being implemented in 9 Thanas of Kurigram District. The primary objective of the project is to establish a sustainable linkage between the SHGs and the Bank so that the rural poor become bankable. Under the project, credit facilities are being extended to Self Help Groups of Marginal and Small Farmers both for collective and individual activities in the form of Seasonal Agricultural Loan (SAL), Agricultural Investment Loan (AIL), Non-Agricultural Investment Loan (NAIL). Loans are collateral-free with a maximum ceiling of Tk.8,000/= at individual level and Tk.80,500/= at collective level and the rate of interest is 12% . So far a total loan of Tk 7.62 crore has been extended to 1058 groups upto June, 2009 and the recovery rate is 85% (cumulative). 13. Swanirvar Credit Program: This Program was launched during 1979 in association with Swanirvar Bangladesh under "Dheki Loan Programme" initiate to help distress village women. Its objective is to help initiate income generating activities for attaining self-reliance as well as employment generation in order to improve standards of living of rural poor.It finances cropping, small business, poultry, rice processing and puffing etc. Besides, it helps creating awareness about literacy and family planning, encourages group meeting and group savings and helps in loan repayment.This is a one year credit facility for Taka 5,000/- with 11% interest and being implemented in 92 thanas through 135 branches. Loans are disbursed through groups formed by Swanirvar Bangladesh. 256125 borrowers have availed of this credit facility amounting to Tk. 80.67 crore upto June, 2009 Recovery rate is 82% (cumulative). 14. Financing in small scale cottage industries: To finance those persons who have already started small scale cottage industries in different areas of the country, Bank has undertaken this program in 1991 with a view to increase their income. The district committee specially formed for this program under the leadership of BSCIC, recommends the genuine loans proposals and the Bank with proper assessment and scrutiny sanctions the loans. The rate of interest under this scheme is 13.75% and the maximum loan repayment period is 3 years. Upto June, 2009 a loan of Tk. 0.85 crore has been disbursed to 597 loanees. Recovery rate is 67% (cumulative). 15. Rural Finance Project ( RFP): This Project was undertaken in 1979 by the Bank in collaboration with Bangladesh Bank and USAID, this program extends credit facilities to small and landless farmers for various income generating activities in rural areas. Upto June, 2009 an amount of Tk. 38.77 crore has been disbursed to 82857 borrowers. Recovery rate is 88% (cumulative). 16. Shoshya Gudam Rin Prokalpa :
This program was undertaken by the Bank in 1988. The main purpose of the project is to assist farmers in retaining crops stored in godown as pledged goods during peak season when prices of the crops remain lower. Upto June, 2009 an amount of Tk.12.14 crore has been disbursed to 23265 borrowers. The rate of interest under this scheme is 12% and the maximum loan repayment period is 9 months. Recovery rate is 19% (cumulative). 17. Small Enterprises Development Project (SEDP, BGD-041): This project was undertaken by the Bank in May 1995 in association with NORAD to extend credit facilities in 40 thanas in greater Faridpur and Mymensingh Districts for establishment of micro enterprises. Under the project, 50% of the credit fund is being provided by NORAD and 50% by the Bank. The objective is to improve socio economic conditions of the project areas through creating employment opportunities. A wide range of micro-enterprises are being financed under this project such as rice mill, oil mill, food processing unit, flour mill, nursery, repairing workshop, hatchery, fishery, weaving, handicrafts etc. So far, 44043 entrepreneurs have received credit under this project amounting to Tk. 192.32crore upto June, 2007. Recovery rate is 95% (cumulative). 18. Self Employment Programme for the Unemployed Youth: Under this programme unemployed youths, trained in different crafts by the Department of Youth Development /BMDC or other organisations are provided with loans to become self employed in their respective field of expertise. Upto June, 2009 an amount of Tk. 3.40crore has been disbursed among 1905 borrowers. Cumulative recovery rate is 95%. 19. Financing NGOs for On-lending to rural poor: Agrani Bank has pioneered in extending loans to NGOs for on-lending to groups of rural poor for various income generating activities. The NGOs which are in shortage of credit fund may avail of loan facilities at an interest rate of 11%. Upto December, 2009 an amount of Tk.90.00 crore has been disbursed to 7 NGOs. Recovery rate is 81% (cumulative). 20 Netrakona Integrated Agricultural Production and Water Management Project: This is an Agrani-IFAD co-sponsored project undertaken in 1995 with the objective of increasing the standards of living of the small and marginal farmers and women of Netrakona District through raising their income and preventing their landlessness. Under the perview of the program Bank has extended its services directly to the target group members and through the NGO's concern. So far an amount of Tk.2.37 crore have been disbursed to selected 6 NGO's for on lending to the target group members and Taka 4.17 crore has been disbursed to 7503 target group members by Bank directly. Recovery rate is 61 % (cumulative). The Project period has ended on 30-12-2000. 21. Credit for Rural Transport : This programme was introduced in 1981. Main purpose of the project is to purchase and made different vehicles used as principal mode of transport in rural areas, such as Bullock/ Buffalo carts, Rikshaw-Van, Boat etc. A total loan of Tk.2.47 crore has been disbursed among 2474 lonees under this programme upto June, 2009. The rate of interest under this
scheme is 10% and the maximum loan repayment period is 3 years.Recovery rate is 86% (cumulative). 22. Bank loan programme in small scale poultry farms : With a view to produce ducks & chickens to a great extent in our country, this programme has been introduced in 1990. Mainly loans are disbursed under this programme to those persons who have been trained up in farming centres conducted by livestock development complex. Upto June, 2009 an amount of Tk. 0.65 crore has been disbursed to 382 borrowers. Recovery rate is 80% (cumulative). 23. Agricultural Diversification and Intensification Project (ADIP) : This project has been undertaken by Agrani bank with the assistance of IFAD. The total project cost is proposed to be US$ 31.20 million out of which US$7.00 million is earmarked for credit. The Remaining US $ 24.20 million will be utilised in Agricultural Development, Rural Infrastructure, Community Development etc. The credit portion is mainly for crop diversification but special emphasis will be given to vegetable production. Gazipur , Tangail, Narsingdi and Kishoregonj ditricts have been selected primarily as project area. Duration of the project is proposed to be 7 years. Loan Agreement has been signed between Government of Bangladesh and IFAD on 27-05-98. Subsidiary Loan Agreement also been signed between Government of Bangladesh (Finance Ministry) and Agrani Bank Limited on 15 -05 -2000.Upto Dec, 2006 an amount Tk. 2.13 crore has already been disbursed to 10 NGOs out of 22 enlisted NGOs. Recovery rate is 96% (cumulative). 24. Kurigram Poverty Alleviation Project (KPAP): RD-5 project i.e. Productive Employment Project (PEP) was implemented jointely by BRDB and Agrani Bank Limited with the financial assistance from SIDA and NORAD since 1988. The project was implemented in 25 thanas of Faridpur, Rajbari, Madaripur, Gopalgonj Shariatpur, and Kurigram district. SIDA withdrew financial support under the project from July/97. But considering the fact that Kurigram district as one of the poorest area of the country on request of the Government of Bangladesh NORAD agreed to provide financial assistance in Kurigram district as "Kurigram Poverty Alleviation Project (KPAP)" following the PEP Model from July/97. The project is covering 9 thanas of the district. Agrani Bank Limited was covering 5 thanas under the project where Agrani Bank Limited has branches. The credit fund ratio under the project between NORAD and Bank was 50: 50. All the activities of PEP have been transferred to KPAP from July/97. All though the project period ended on June/2000 but the credit activities under the project continued till June, 2002. An amount of Tk. 32.91 crore has already been disbursed among 61150 borrowers up to June, 2002. Recovery rate is 91% (cumulative). It may mention here that the Project has been handed over to BRDB from October /2000. It may mention here that after the completion of the project on September/2000 an agreement was signed on 12-02-2001 between Agrani Bank and BRDB. According to the agreement from October/2000 the Project will be run by BRDB. BRDB will recover and return the outstanding amount of Bank's portion. 25. Khudra Uddyog Prakolpo
This project is undertaken by the Bank in June'97 as its own program. The main objective of the project is to establish small scale industries, facilitate employment opportunities for the unemployed by engaging them in income generating activities. Groups consisting of five members of same mentality and locality will be considered for loan under this program. Yearly income of the group members should be less than Tk 30.000/=. Field assistants will identify the target group and will provide training. Maximum loan ceiling is Tk. 80,000/=. No collateral is required for loan amounting to Tk. 50,000/=. Equity participation is 10% for each loan. A risk fund is to be formed by deducting / depositing 10% of the loan amount. Loan upto Tk. 25,000 can be sanctioned by branch manager and above Tk. 25,000 can be sanctioned by the zonal head . The rate of interest under this scheme is 8% and the maximum loan repayment period is 3 years. An amount of Tk.14.84 crore has been disbursed upto June, 2009 among 8485 borrowers. Recovery rate is 84% (cumulative). 26. Agro-based Industrial Loan: Agro-based industrial establishments are playing a pivotal role with a view to recouping the shortfall of protein-related foods as well as promoting the production of milk and baby foods. Hopefully, the setting up of these industrial establishments has at once paved the way for caring huge foreign Exchange to a substantiate extent. The Government has emphasised the need for establishing agro-based industry. Under this sector credit is being disbursed to Fisheries financing, Semi intensive shrimp cultures shrimp - carp hatchery and nursery Dairy, Poultry, such & programes. A total amount of loan Tk 142.67 crore has been disbursed among 523 project upto June, 2009. Cumulative recovery rate is 70%. 27 Special Micro- Credit Program (SMCP): Agrani Bank has undertaken a Special Micro-Credit Program (SMCP) to finance in small farm and other income generating activities with a view to engaging unemployed youths, distressed women and landless rural poor through extending short and medium term credit . The main purpose of the program is to increase income provide nutrition to the target group and to prevent unemloyment. A wide range of activities are involved under this program viz. Mini dairy , beef fattening, poultry, handicraft , tailoring, fishery, nursery , grocery, small cottage industries etc. Loan upto Tk.50,000/- is collateral free. Disbursement of loan may be made to the borrowers on individual as well as group basis. There are provisions to involve NGOs for group development and loan recovery. For this purpose service charge and prizes are allowed to the NGOs concern. Bank officials also will get prizes for loan disbursement and loan recovery. This program has been started from 2000 - 2001 financial year. So far an amount of Tk. 33.79crore has been disbursed among 27082 lonees upto June, 2007 Cumulative recovery rate is 82%. 28. Goat rearing Program for poverty alleviation. As per the Instruction of the honourable Prime Minister, Peoples Republic of Bangladesh this Credit program has been taken in 2001-2002 Financial year by this Bank to remove the poverty of poor people, unemployment problem and earned foreign currencies. Under this credit program unemployed youths, those have got training under the Fisheries and Livestock Ministry will get the loan as priority basis. This program has to b e implemented by the 118 branches of 50 Upa-Zillas in 25 districts. The rate of interest of this program is 10%. Under this credit program the loanee who will be able to pay their dues in time, will get 2% rebate
facilities on the charged interest. Concern Upa-Zillas Comittee will select borrower and fixed up the loan amount to each borrower. The ceiling of the loan under this credit program is Tk. 30,000/- to 75,000/- ( not over Tk. 1,500/- per goat) The period of loan is 3 years with 1 year grace time and loan should be repaid by the borrowers with four half yearly instalment. Under this Program Agrani Bank has disbursed Tk. 14.41 lakh to the 19250 loanees as on june 2009. Cumulative recovery rate is 45% as per the latest instruction of the Government, this program will be implemented by the branches of this Bank all over the country. In order to rapid implementation of this program, Agrani Bank has published attractive advertisement through the different the National Dailies. 29. Herbal Nursery & Horticulture Program For Poverty Alleviation This program has been taken in 2001-2002 Financial year by this Bank under the Instruction of Honourable Prime Minister's Principal Secretary of Bangladesh in order to expansion of Harbal and Unani treatment, Social plantation and poverty alleviation all over the country. This program will be implemented through the branches as per Head office instructions. Under this credit program, the unemployed youths having trainings and experiences of nursery and plantation will get the loan as priority basis. It is a mid-term loan. The highest ceiling limit of Tk. 20,000/- per bigha and Tk. 50,000/- per project for Herbal Nursery. For Herbal Horticulture the highest ceiling of Tk. 20,000/- per acre and Tk. 50,000/- per project and the rate of interest is 8%. The period of loan for Herbal Nursery is 18 months and Herbal Horticulture is 7 years from the date of disbursement respectively. So for an amount of Tk 3.52crore has been disbursed among 3545 borrowers upto June 2009. Cumulative recovery rate is 80% 30. Employment Generation Project for the Rural Poor The Employment Generation Project for the Rural Poor (EGPRP) came into operation upon signing of a Loan Agreement (IFAD Loan#378-BD) in 1995. The Project was designed to reinforce the efforts of the Government of Bangladesh (GOB) to meet its strategic objectives of increasing output and employment through nationwide development of small enterprises, to which it accords high priority. The project's goal is to create a productive micro-enterprise sub-sector providing profitable self-employment for rural people, supported by public and private sector structures and processes which lead to a favorable climate for increasing investment in, and improving management of, micro-enterprises. The project is to contribute to the goal through four objectives: a) To establish 9,500 potentially, technically and financially viable micro-enterprises in the hands of rural family entrepreneurs, employing about 70,000 skilled and unskilled laborers b) To establish within Agrani Bank Limited an efficient and sustainable programme of services which meets the needs of its clients and facilitates the application of local financial resources for investment in micro-enterprises. c) To establish private sector financial intermediaries and advisory services to develop the market for credit among micro-enterpreneures and to assist them to identity, plan, finance and operate micro-enterprises
d) To develop replicable models of micro-enterprises which can be disseminated throughout Bangladesh. Loan Delivery System Through Agrani Bank Limited: Agrani Bank Ltd., through its designated Branches, directly delivers credits to entrepreneurs on the basis of their financial and personal standing and experience. Through Advisory Service: Advisory services of NGO's or private institutions are to be used for scouting potential micro entrepreneurs, assisting them in preparing business plans and introducing them to Agrani Bank Limited for delivery of loans. Through Credit Retailers: Agrani Bank Limited, through authorized retailers like NGO's, indirectly deliver loans to those entrepreneurs who are graduated from poverty level through participating in Income Generating Activities under Poverty Alleviation Programs and who have good prospects for entrepreneurial success but cannot meet Agrani Bank Limited's criteria on equity contribution. They are expected to be direct clients of the Credit Retailing Agencies. Eligible Micro Enterprises Agro-processing enterprises meant for paddy, flour, edible oil, cotton, fruits, vegetables etc. Manufacturing enterprises like those related to handicrafts, metal, wood, plastic, garments, food, chemical products etc. Service Enterprises like those related to restaurants, tailoring, laundering and any other type that contributes to rural employment generation. Lending Terms & Conditions Target Group: The Target Group for ownership/ operation of micro-enterprises consists of four sub-groups: 01. Owners/operators of existing micro-enterprises who have proven managerial and technical skills in self-employment and who wish to expand, upgrade and diversify their business. 02. Persons who have acquired their skills and capacity to operate micro-enterprises after working as apprentices or skilled workers in existing micro-enterprises and who are now eager to establish the same type of micro enterprises themselves. 03. Persons capable of graduating from their existing level of income through their present employments under various Poverty Alleviation Schemes supported by NGOs and are now interested to enhance their income generating activities. 04. The unemployed landless who fall into two categories: (a) Persons, such as graduates from universities or schools of higher education and capable of starting commercially viable micro-enterprises after undergoing supplementary training. (b) Those preferring self-employment to waged employment. Eligibility of applicants
Age:
18-45 years
Income:
Those who already have Net Annual Income of Taka 10,000 to Taka
Experience:
Skilled and experienced in operating micro-enterprises
Education:
Minimum Primary Education
Background:
Who are not Loan defaulters in any other financial institution
Loan Size:
Minimum Taka 20,000 & Maximum Taka 5,00,000
Security:
No collateral security for loan up to Taka 75,000, Collateral security required for loan above Taka 75,000
Interest:
13% (on diminishing balance) for Working Capital, 11% (on diminishing balance) for Term Loans •
9.50% (on diminishing balance) for Credit Retailers
The Credit retailers can charge their borrowers 3% above the rate at which they borrow form Agrani Bank Limited or a maximum of 14% •
Loan Repayment Repayment terms of all loans are flexible in term of practical cash flow situation. The Credit Retailers, however, may apply their own terms and conditions for realizing loans from the ultimate borrowers. Loan Supervision: As loan sanctioning authority, under this Project, is delegated to the Bank Branch and Zonal levels, the concerned Bankers supervise performance of each and every loan case and advise the borrowers on proper management of cash flow and repayment of Loans. The Bankers also assist in establishing linkages with marketing channels and provide technology dissemination services available within the reach of the project. Progress of the Project Now the project is merged with Agrani Bank Limited. This project is now being operated by "SME & Micro Credit Division". •
51,312 micro-enterprises have been established through direct lending of Taka 204.40 Crore by designated branches of Agrani Bank Limited •
65,000 micro-enterprises have been established through NGO's by amount of 140.00 crore (cummulative) • •
A total of Taka 344.40 Crore has been disbursed for financing 1,16,312 micro-enterprises
Employment opportunity for additional 1,74,468 persons has been created through 1,16,312 micro-enterprises •
3.2.2.5. EXPORT FINANCE
To boost up country's Export, Agrani Bank Limited has been providing different kinds of assistance and incentive to the exporters. Some of which are: * Pre-Shipment and Post-Shipment Finance. * Discount/Concession rate of interest for exports Finance. * Back-to-Back L/C facility under bonded Warehouse system. * Sight L/C under Export Development Fund (EDF). * Interest bearing and non-interest bearing Exporter's retention Quota A/C. * Export Incentive Program. Financing industries of 100% foreign investment or of Joint Venture at Export Processing Zones Obtaining EEF (Equity & Entrepreneurship Fund) from Government through Bangladesh Bank for building up Entrepreneurs' Equity. * Providing services to the exporters by the Bank's own logistical supports like SWIFT, Reuters Service, Internet, Fax etc. * Consultancy and Advisory Services by an expert group of officials. Special credit programs for IT related export business: Checklist of requirements: A. A Firm or Company having valid ERC, necessary infra-structural and technical facilities and sufficient skilled manpower related to computer. B. Member of BASIS or BCS. C. Having Computer Literacy or related professional background. D. Preference to the firm/company having prior experience. E. Satisfactory performance Certificate/Acceptance Letter from /Counterpart abroad. F. Valid export Orders are in hand. Export The Export business of Agrani Bank Limited during the year 2008 amounted to TK.49538.30 million and the rate of growth was 1.3% over that of the previous year. Year
Taka in million
2004
41970.60
2005
41709.80
2006
51713.30
2007
48918.70
2008
49538.30
Scope of Further Expansion Software and Data entry, Dry & Dehydrated fish, Processed and Semi Processed food fishes and shrimp, Toys and luggage, Fashion item, Leather goods, Stationery goods, Orchid, Gift item, Bamboo Cane & wooden furniture, Vegetable and Fruit,
Checklist of essential papers/documents for Export •
Trade License from proper authority
•
Export Registration Certificate (ERC)
•
Value Added Tax (VAT) Registration Certificate
•
Income Tax Certificate with Taxpayer's Identification Number (TIN)
IMPORT FINANCE With assistance from about 400 overseas correspondents, Agrani Bank Limited, through 40 Authorized Dealer Branches, has been financing full range import business of a lot of Importers who are Bank's clients. Import Items Wheat, Rice, Suger, Milk Food, Edible Oil, Oil Seeds, Fruits, Spices, Raw Cotton, Cotton Yarn, Textile Fabrics, Pharmaceuticals R.M, Drugs & Medicine, Chemicals, Lime Stone, Coal, Cement, CI/GP/BP Sheet, Capital Machinery, Other Machineries, Other Iron & Steel Product, Motor Vehicle, Parts, Electronic Component, Petrol,Oil & Lubricant(POL), Onion, Fertilizer, Coconut Oil, Scrap Vessels, Marine Diesel Engine, Iron & Steel Scrap. Facilities Offered: Opening of L/C at competitive/reasonable margin and at concessional commissions & rates of interests with interest rebate facilities on import finance for the prime customers the import business of Agrani Bank Limited during the year 2008 amounted to TK.109517million. BONDS Agrani Bank Shilpa Unnayan Bond Agrani Bank Shilpa Unnayan Bonds of TK 50,000 TK 100,000 & TK 500,000 denominations were introduced in July 1999 with a view to accumulating a fund of Taka 500 crore to finance industrialization. Purchaser of this Bond can separately withdraw the accumulated interest of six months. The purchaser enjoys a lot of Tax benefits. Agrani Bank Shilpa Unnayan Bond for 5 years
10%
Agrani Bank Shilpa Unnayan Bond for 7 years
11%
Agrani Bank Shilpa Unnayan Bonds may be purchased from the following designated Branches of Agrani Bank Ltd.: SERVICE AGENCY SERVICES Agrani Bank Limited, being a state owned Bank, has both commercial commitment to its clients and sociatal commitment to the nation. Besides catering service to its clients at nominal fees/charges the Bank has to provide a plethora of services, free of charges, in respect of transfering money to diffrent benevolent organizations and groups of professionals in far flung areas through its branches in urban and rual areas all over Bangladesh.
Here below are a few of such services Agrani Bank Limited provides: 1. Collection of Utility bills :
Telephone bills of T &T Authority without service charges
Grameen Phone bills of Grameen Phone Ltd. with service charge & other charges
Electric bill of REB without service charges
Electric bills of DESA without service charges
Electric bill of PDB without service charges
Electric bill of DESCO without service charges
Bills of Railways without service charges
Gas bill of Titas Gas, T& D Co. ltd without service charges
Gas bill of Bakhrabad Gas Co. ltd without service charges
Bill of Oil-bill of Meghna Petrolium Co. Ltd.
2. Sale/encashment of Saving Certificates 3. Sale/Purchase of Prize bonds 4. Payment of Army/civil pension 5. Payment of non-government primary /secondary school/college /Madrasha teachers benefit (government portion) 6. Payment of Government primary school teachers salary 7. Payment of Honorarium to freedom fighters. 8. Payment of stipend for female students of secondary and higher secondary institutions 9. Payment of Govt. allowances to Bayaska, Bidava and Dostho Mohila. 10. Payment of stipend to primary students 11. Payment of stipend to Shishu Kallyan Trust in urban areas. 12. Maintain of BADC disbursement account with 200 branches 13. Payment of Food Procurement bills. Locker Service: For safekeeping of customers' valuables like important documents and goods like jewelries and gold ornaments, Agrani Locker Service is available in most of the Branches in urban areas. Nature of Service
Custody of Locker /Safe
Nature Charges Rent
of
Rate of Charges a) Yearly TK.900/= for small size locker b) Yearly TK.1200/= for medium size locker c) Yearly TK.1800/= for big size locker
Evening Banking Service : "Evening Banking", a unique service of Agrani Bank Limited, only for receiving Cash and Documents beyond transaction hours till 6 o'clock in the evening, is available in about 207 important Branches of Agrani Bank Limited. The service is
attractive for those, like shopkeepers, who accumulate cash as sales proceeds in the afternoon when counters of Bank branches usually remain closed. INLAND REMITTANCE Agrani Bank Limited, as a leading government-owned Bank, has to provide a plethora of services for the benefit of its clients at a low cost compared to other private Banks. Inland Remittance Bank offers various remittance services to its valued customers FOREIGN REMITTANCE AGRANI EXCHANGE HOUSE Hundreds of Bangladeshi expatriates are engaged in a variety of professions in Singapore. Most of them have to remit money to their families as well as their kith and kin in Bangladesh. Only a meager amount of their remittance used to reach Bangladesh through banking channels before our Exchange House started operation in February, 2002. Many illiterate and gullible Bangladeshi guest workers fell prey to 'Hoondi' syndicates (unauthorized/unscrupulous intermediaries). 'Hoondi' vendors, in the name of remitting money to Bangladesh through non-banking channels under various tricky ploys, fleeced many Bangladeshi brothers and left them bereft of their hard earned savings. Instructed by the Government of the People's Republic of Bangladesh Agrani Bank Limited opened the Exchange House to help Bangladeshi professionals and guest workers in Singapore remit their money to any Branch of any Bank in Bangladesh within the shortest possible time. There has been overwhelming response from Bangladeshi expatriates as well as other remitters in Singapore immediately after its opening. Our Exchange House remains open till late in the evening every day. Besides remitting money any Bangladeshi Wage Earner staying in Singapore can also open NFCD Account and FC Account and purchase Wage Earners' Bonds through assistance from our Agrani Exchange House. Thousands of Bangladeshi expatriates are engaged in a variety of professions in Malaysia. Most of them have to remit money to their families as well as their kith and kin in Bangladesh. Only a meager amount of their remittance used to reach Bangladesh through banking channels before our Remittance house started operation in January, 2006. Instructed by the Government of the People's Republic of Bangladesh Agrani Bank Limited opened the Agrani Remittance House Sdn. Bhd (As the subsidiary co.) in Malaysia to help Bangladeshi professionals and guest workers to remit their money to any Branch of any Bank in Bangladesh within the shortest possible time. There has been overwhelming response from Bangladeshi expatriates as well as other remitters in Malaysia immediately after its opening. Our Remittance House remains open till late in the evening every day. Besides remitting money any Bangladeshi Wage Earner staying in Malaysia can also open NFCD Account, FC Account and purchase Wage Earners' Development Bonds through assistance from our Agrani Remittance House Sdn. Bhd. Malaysia. OVERSEAS
Millions of Bangladeshi nationals are employed in a variety of professions in reputed organizations all over the world. Their expertise and professional acumen have earned Bangladesh not only fame and prestige but also hard currency strengthening the backbone of our economy. Bangladeshi nationals living abroad are to remit their hard earned savings through banking channels, but not all of them are aware of friendly banking channels they may send their money through. Agrani Bank Limited, a leader in Foreign Remittance business, is equipped with all modern tools like SWIFT (Society for World-Wide Inter-Bank Financial Telecommunications), Telex, Internet, fax and other Telecommunication devices to ensure quick and safe transfer of foreign remittance to the beneficiaries anywhere in Bangladesh. The Bank has declared to general public that it would take a maximum period of 72 hours for crediting incoming foreign remittance to the beneficiaries' accounts with any Bank, however remote the Bank Branch is. Agrani Bank Limited, having established contractual relationship with about 400 Overseas Correspondents and 30 Exchange Houses all over the world, is ready to cater to the banking needs of foreigners as well as Bangladeshis living abroad as far as incoming remittance is concerned. To ensure quick remittance inflow into Bangladesh Agrani Bank Limited has also made Special Arrangement with Citi Bank NA. Under the arrangement, Citi Bank N.A. and its correspondents, subsidiaries and affiliates outside Bangladesh will collect remittances and will issue Drafts on designated branches of Agrani Bank Limited. Designated Agrani Bank Limited Branches shall honour /execute payments of all the Drafts instantly within the stipulated time of 72 hours. With a view to serving a huge number of Bangladeshi guest workers in Singapore, Agrani Bank Limited has taken a bold step to open in Singapore Agrani Exchange House Pte Ltd, a subsidiary company fully owned by Agrani Bank Limited, which started its operation since 8th February, 2002. Bangladesh government has put emphasis on increasing remittance inflow and is determined to deter money transfer through non-banking channels. Anyone involved in money laundering activity in any form like "Hoondi" business are sure to be awarded heavy punishment, if found guilty under "Money Laundering Prevention Act, 2009" passed recently by Bangladesh Government. We request all concerned, especially our Bangladeshi brothers and sisters, to send their money through banking channels and help Bangladesh develop with their hard earned foreign currency. Agrani Bank Limited has been maintaining around 903 number of correspondent including Exchange Houses located in different parts of the world to facilitate our international trade and other transactions of trade and remittances globally. The expatiate Bangladesh who are working abroad, can easily take the opportunity to remit their hard earned foreign exchange to their respective beneficiaries utilizing our correspondent services. PRODUCTS
OF
WAGE EARNERS
Nonresident Foreign Currency Deposit (NFCD) Account All nonresident Bangladesh nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad may maintain interest bearing Time Deposit Accounts named "Nonresident Foreign Currency Deposit (NFCD) Accounts" with any Authorized Dealer (AD) Branch of Agrani Bank.
Bangladesh nationals serving with Embassies/High Commissions of Bangladesh in Foreign countries as also the officers/staff of the Government/Semi Government Departments, nationalized banks and employees of corporate bodies posted abroad or deputed with International and Regional agencies like IMF, World Bank, IDB, and ADB etc. during their assignments abroad may open such accounts with Agrani Bank Limited. Crew members of the Bangladeshi shipping companies are not entitled to open such accounts, but shore staff posted abroad may open such accounts. Accounts may also be opened with funds transferred from existing foreign currency accounts maintain by the wage earners with any AD Branch of Agrani Bank. The accounts are in the nature of Term Deposits maturing after one month, three months, six months and one year. The accounts may be maintained in US Dollar, Euro, Pound Sterling or Japanese Yen: initially with minimum amount of US$1000 or Pound Sterling 500 or equivalent. Account may be opened against remittances in other convertible currencies after conversion of those into US Dollar, Euro, Pound Sterling or Japanese Yen. These Accounts may be maintained as long as the Account Holders desire. Eligible persons are also allowed to open such Accounts within six months of their return to Bangladesh. Eligible Bangladesh nationals may send applications along with a set of specimen signatures of the opener of the account to any AD Branch of Agrani Bank. in Bangladesh duly verified by any Bangladesh Mission abroad, or a reputable Bank or any other person known to the AD Branch of Agrani Bank in Bangladesh. The Application Forms may be procured from Bangladesh Missions Abroad and from any AD Branch of Agrani Bank. in Bangladesh. No set of specimen signatures will be required to be enclosed with the application form if the application is submitted to an AD with whom the applicant has already been holding a Foreign Currency Account. In such a case reference to the respective FC account number will serve as self-introduction and the account-opening branch will verify the signature with the specimen signature maintained for the FC account. The concerned AD Branch of Agrani Bank will pay interest on deposits into the accounts at the Euro Currency Deposit rates. In case of premature repayments, the interest amount will be forfeited to the depositing AD Branch. The interest on deposits into this account is exempt from the tax payable under Income Tax Act. The Account Holder can freely repatriate the balance and the interest accrued thereon in foreign exchange to the country of his residence or anywhere he chooses and may at his option; convert the balance into local Taka at the prevailing exchange rate. Foreign nationals and companies/ firms registered and/or incorporated abroad, banks, other financial institutions, including institutional investors and 100% foreign owned industrial units in the Export Processing Zones in Bangladesh, are also allowed to open and maintain NFCD accounts with the ADs. The minimum amount of time deposits in such cases should be US$ 25,000 or its equivalent in Pound Sterling, Euro or Japanese Yen. Other terms and conditions in respect of these account-holders will be the same as those mentioned above for NFCD accounts of non-resident Bangladesh nationals. Foreign Currency (FC) Account Account opened and maintained by authorized dealer branches in Foreign Currency without prior approval of Bangladesh Bank is called Foreign Currency Accounts.
Who can open? a) Bangladeshi nationals working or earning abroad including self-employed Bangladeshi immigrants proceeding abroad on employment may open F.C. Account even without initial deposit. b) Foreign nationals residing abroad or in Bangladesh and also Foreign firms registered abroad and operating in Bangladesh or abroad. c)
Foreign missions and their expatriate employees.
d) Bangladeshi nationals working with the Foreign/ International organizations operating in Bangladesh provided their salary is paid in Foreign Currency or their consultancy fees/honoraria received in Foreign Currency. e)
Diplomatic Bonded Warehouse (duty free shops) licensed by the custom authorities.
f) Local and Joint Venture contracting firms employed to execute projects by foreign donors/international donor agencies as per relevant contract which will be closed as soon as the projects are concluded. Currencies: Foreign Currency (F.C.) Account may be opened in the following foreign currencies: i)
U.S. Dollar (USD)
ii)
Great Britain Pound Sterling (GBP)
iii)
Euro
iv)
Japanese Yen. (JPY).
Documents required for opening F.C. Account: 1.
Prescribed Account Opening Form
2.
(Two) Passport size photographs
3.
Authorised Specimen Signature Card
4.
Proof of employment or other related documents.
5.
In case of nominee additional 2 copies of passport size photograph of the nominee
6.
Photo copies of Passport or other related documents.
Mode of Deposits: The Foreign Currency Accounts may be credited in the following ways: 1. Cash Foreign Currency brought in by the depositor. 2. Travellers Cheques. 3. Cheques or Drafts. 4. Money Order Receipt 5. By Electronic Fund Transfer.
Interests: The ADs maintaining foreign currency accounts can pay interest of F.C. Accounts, if the accounts are maintained in the form of Term Deposits for a minimum period of 90 days. Interest rates are comparable with the rates available on similar accounts maintained abroad. Retention of Foreign Currency in Accounts; Bangladeshi citizens and other persons residing in Bangladesh or abroad are required to selfdeclare such F.C. to an AD within one month from the date of acquisition by them of such F.C. This regulation is exempted for the followings: i. Foreign diplomats, nationals, missions, embassies and expatriate employees of foreign business houses, contractors or consultants who are receiving their salaries partly or entirely in foreign currency abroad ii. Portion of repatriated export proceeds kept in Retention Quota Accounts. iii. Foreign Exchange brought in at the time of return can be credited to RFC account. iv. And upto US$ 5,000/- brought in undeclared at the time of return from abroad can be retained at hand. Use of F.C. account balance: a) The F.C. can be used for payments for the purpose mentioned while opening the account. b) Funds may be utilized by the account holders for import of commodities as per instruction of Bangladesh Bank & CCI&E. c) Funds may be brought back to the country of the Account Holder living abroad. Fund may be used for traveling, payments of credit card bills, education expenses and treatment expenses. d) Fund may be converted to local currency by the Account Holder or Nominee. Wage Earner’s Development Bond (WEDB) Wage earners living abroad may purchase "Wage Earner's Development Bond" in Bangladesh Taka under the following terms & conditions: Denominations: Taka 25,000 Taka 50,000 Taka 100,0000 Terms: For Five years Interest: 12%. In case of premature encashment interest will be paid at lower rate Insurance Coverage: Any purchaser of Wage Earner's Development Bond is entitled to get death-risk benefit.
Repatriation in Foreign Currency: Purchaser of WEDB can repatriate the principal amount of the bond in foreign currency Tax Benefit: Interest earned from WEDB is exempted from Income Tax Availability of WEDB: Application Forms may be collected from any AD Branch of Agrani Bank. or any other Bank in Bangladesh or Agrani Exchange House in Singapore or Bangladesh Missions abroad. But the Form has to be submitted to any AD Branch of Agrani Bank. in Bangladesh for purchasing WEDB Nonresident Investor’s Taka (NIT) Account With a view to helping Wage Earners invest in shares and securities in Bangladesh "Nonresident Investor's Taka (NIT) Account" has been introduced. A Wage Earner can open a NIT Account with any AD Branch of Agrani Bank Limited under the following conditions: Dividends or sale proceeds of shares or securities may be deposited in the NIT Account Account Holder can repatriate the available balance amount of the account in foreign currency back to any country of his/her choice Dividend and capital gains deposited in the account are exempted from Income Tax The account can be operated by nominee (s). US DOLLAR PREMIUM BOND & US DOLLAR INVESTMENT BOND Nonresident Bangladeshi's seeking an attractive investment opportunity in Bangladesh can invest in US Dollar Premium Bond & US Dollar Investment Bond issued by Bangladesh Government from 1st November, 2002 through their Foreign Currency account. Major Features of both the Premium and Investment Bonds: •
3 years maturity.
•
Half yearly interest payment.
•
Principal amount and interest can be payable in either Bangladeshi Taka or US Dollar.
•
Principal and interest both are free of income tax.
•
At maturity, the principal amount can be reinvested or repatriated.
In case of loss, partial damage or complete damage of the bond,duplicate bond will be issued. • •
The bond can be enchased before maturity but partial encashment is not allowed.
•
Persons buying bonds worth US $ 1 million or 10 lac US Dollar will get CIP status.
The Bond holder can nominate a nominee and the bonds will accrue interest on behalf of the nominee even after the death of the bond holder. •
Features of Premium Bond: •
7.5% annual interest rate.
•
Principal amount is payable in US Dollar.
•
Interest is payable in Bangladesh Taka.
•
Principal amount can be payable in Bangladesh Taka if the purchaser desires.
If any customer buys bond worth 10,000 US Dollar ,continues to increase the investment up to death, he or she will get 15% to 25% of invested amount with a maximum of Taka.2,000,000/- as death risk benefit under specific terms & conditions. •
Features of Investment Bond: •
6.5% annual interest rate.
•
Principal amount and interest payable in US Dollar.
Principal amount and interest can be payable in Bangladesh Taka at the discretion of the investor. •
Face value of both the Bonds: •
US Dollar 500,1000,5000,10,000 and 50,000
Limit of Purchase: •
Lowest 500 US dollar and highest of any amount in multiple of 500.
Nominee: In the event of the death of the holder ,the nominee and in the event of the death of both the holder and the nominee ,the heir(s) of the holder shall be able to withdraw the amount of the bond(Principal ,interest & death risk benefit if any). Bond Issuing Branches of Agrani Bank Limited: •
Principal Branch,Motijheel ,Dhaka.
•
Foreign Exchange Branch,Dhaka.
•
Ramna Branch,Dhaka.
•
Amin Court Branch,Motijheel,Dhaka
•
Purana Paltan Branch,Dhaka.
•
Lal Dighi East Branch,Chittagong.
•
Commercial Area Branch,Agrabad,Chittagong.
•
Clay Road Branch,Khulna.
•
Shaheb Bazar Branch,Rajshahi.
•
Lal Dighir Par Branch,Sylhet.
•
Chowkbazar Branch,Barisal.
•
Jessore Branch,MM Ali Road,Jessore.
Besides these, information can be collected from any AD branch of Agrani Bank. Encashment of Bond Before maturity: A. Premium Bond • No interest will be given if enchased before 1 year. •
For encashment over 1 year but less than 2 year ,interest rate will be 6.5%.
•
For period over 2 years but less than 3 years , interest rate will be 7%.
•
For period 3 years and over ,interest rate will be 7.5%.
B. Investment Bond •
No interest will be given if en cashed before 1 year.
•
For encashment over 1 year but less than 2 year ,interest rate will be 5.5%.
•
For period over 2 years but less than 3 years , interest rate will be 6%
•
For period 3 years and over ,interest rate will be 6.5%.
Other Information: Detail information and application forms are available in Agrani Exchange House Pvt. Ltd, Singapore. •
Bangladesh embassy/consular office in USA, UK, Kuwait, Saudi (Riyadh/Jeddah ),Malaysia and Singapore will provide assistance in this regard. •
FIVE YEAR’S PERFORMANCE
AT A
GLANCE (AMOUNT IN CRORE
TAKA )
Arabia
Balance sheet Authorized Capital Paid-up Capital Reserves Revaluation reserve on Investment in Govt. Securits. Retain Profit (Loss) Total Equity Total Deposit Core Deposit i savings deposit ii Deposit Pension Scheme iii Agrani Bank Pension Scheme iv Agrani Bank Bishesh Shanchay Long Term Liabilities Total Loans and Advances Interest Suspense and penal Interest Provision for Loans and Advances Net Loans and Advances Investments Fixed Assets (Property, Plant and Equipment) Total Asset Net Current Asset Operating Results Total Income Total Expenditure Provision During The Year Operating Profit before amortization, Pro. & Tax Net Profit (loss) after amortization, Pro. & Tax Earnings Per Share (Tk.) Cost of Fund in Percentage Return on Equity in Percentage Return on Asset in Percentage Net Interest margin in percentage Average yield on Loan in percet. (Performing Loan) Loans as percentage of Deposit (A.D. Ratio) Total Classified loans to Total Loans in percentage Net classified Loans to Net Loans in percentage Other Key Operational Data Forex business: i Imports ii Exports iii Remittances Guarantee Business Number Of Branches Number of Employees Number of Correspondent Banks with NOSTRO A/c Number of Foreign Correspondents Number of Remittance Correspondents Subsidiaries
2009 800 497 139 207 74 917 16628 7357 6966 125 136 130 15964 12224 691 1187 10346 4090 288 21179 4798
2008 800 248 74 43 277 642 14681 7209 6486 127 567 29 3980 11336 672 1153 9511 2933 253 18732 (6854)
2007 800 248 16 70 334 13592 7129 6001 124 1004 -10230 11849 950 1390 9509 2190 248 18628 356
2006 800 248 15 15 (1810) (1532) 12892 7491 5785 113 1593 -11006 10587 892 1337 8358 2231 41 15408 2130
2005 800 248 15 19 (2008) (1726) 13084 7731 5201 114 2416 -6955 9940 959 1440 7541 2433 44 15553 2379
1637 992 186 644 111 22.31 6.86 12.09 0.52 4.61 11.04 73.51 19.42 4.79 2009 17801 7753 4461 5587 160 867 11443 39 383 33 2
1498 865 211 633 265 106.52 6.65 41.28 1.41 4.24 10.38 77.21 22.48 7.61 2008 21175 10952 4954 5269 112 867 10988 39 383 29 2
1368 842 222 526 86 34.56 6.68 29.55 0.92 3.69 10.35 87.18 26.83 8.82 2007 20516 11343 4892 4281 105 866 11345 39 416 28 2
1233 875 29 358 194 6.84 1.26 2.96 9.53 82.12 26.27 6.61 2006 20693 11592 5171 3930 108 866 11793 38 416 25 2
1060 846 374 214 163 6.95 1.05 1.73 7.94 75.98 28.31 5.51 2005 12747 5119 4171 3457 119 864 11938 41 410 25 2
INCOME STATEMENT ANALYSIS Financial performance analysis of Agrani Bank Ltd. is divided into the following parts: Income statement analysis, Balance sheet analysis and ratio analysis.
Growth Rate
FIGURE: 4.3.1 INTEREST INCOME 150% 100% 50% 0% -50%2005 -100%
Interest Income
2006
2007
2008
2009
Year
% change of the balance
Year Interest Income (Tk. in millions)
2005 6385
% change of the balance
0
2006 8031 25.78 %
2007 4380 -45.46%
2008 9547 117.97 %
2009 10122 6.02%
The interest income is the main source of income for bank. On this income the bank profitability will depends. So bank interest income show an upward trend which is indicating that the repayment policy is good and increasing efficiency day by day. But here interest income is decrease 2008 to 2009.
Growth Rate
FIGURE: 4.3.2 INTEREST PAID ON DEPOSIT 150% 100% 50% 0% -50%2005 -100%
Interest Paid on Deposit
2006
2007
2008
Year
Year Interest Paid on Deposit (Tk. in millions) % change of the balance
2009 % change of the balance
2005 5774 0
2006 5586 -3.26%
2007 2619 -53.11%
2008 2009 5241 6083 100.11% 16.07%
The interest paid on depositor is the main source of expense for bank. On this expense the bank profitability will depends. So bank interest expense shows an up and down trend which is indicating that the bank doesn’t have stable expanse payment to the depositor the trend is volatile. FIGURE
NET INTEREST INCOME
Net Interest Income Growth Rate
400% 200% 0%
-200%2005
2006
2007
2008
Year
2009
% change of the balance
Year Net Interest Income (Tk. in millions)
2005 610
% change of the balance
0
2006 2444 300.66 %
2007 1760 -27.99%
2008 4306 144.66 %
2009 4038 -6.22%
The net interest income is the result from deducting the interest expense from the interest income. An upward trend to the net interest income will show that the bank have gain efficiency to decrease the interest expenses to increase the profitability. Here 2008 to 2009 the graph shows that the bank doesn’t have enough efficiency to reduce the interest expense at a stable rate to increase the net interest income.
Growth Rate
FIGURE: INVESTMENT INCOME 120% 90% 60% 30% 0% -30%2005 -60%
Investment Income
2006
2007
2008
2009
Year
Year Investment Income (Tk. in millions) % change of the balance
% change of the balance
2005 1762 0
2006 1557 -11.63%
2007 949 -39.05%
2008 1854 95.36%
2009 3690 99.03%
The investment income is earned from investment in government t-bill, bond and from private share and debenture. The upward trend from 2007 to 2009 show that the bank is gaining proficiency to earn from its investment and its investment income is increasing which will keep a significant impact on the profitability. FIGURE: COMMISSION EXCHANGE AND BROKERAGE
Growth Rate
Commission, Exchange earning and brokerage 150% 100% 50% 0% -50%2005
2006
Year
2007
Year 2005 Commission, Exchange earning and 1948 brokerage (Tk. in millions) % change of the balance 0
2008 2009 % change of the balance
2006
2007
2008
2009
2322
1424
3147
2128
19.20%
-38.67%
121.00%
-32.38%
The commission exchange and brokerage income is earned from ancillary services. The upward trend from 2007 to 2008 show that the bank is gaining proficiency to earn from its ancillary services and its ancillary income is increasing which will keep a significant impact on the profitability
Growth Rate
FIGURE: OTHER OPERATING INCOME 40%
Other Operating Income
20% 0% -20%2005 -40%
2006 Year
2007
2008
2009
% change of the balance
Year 2005 2006 2007 2008 2009 Other Operating Income 501 419 328 430 426 (Tk. in millions) % change of the balance 0 -16.37% -21.72% 31.10% -0.93% The bank investment in other asset which is not the core part of the bank shows an increasing trend in 2008. That’s why the other income from other asset is increasing. It indicates the bank is increasing its investment in different asset year by year. But it decreases in the last year. FIGURE: TOTAL OPERATING INCOME
Growth Rate
150%
Total Operating Income
100% 50% 0% -50%2005
2006 Year
2007 2008 2009 % change of the balance
Year 2005 Total Operating Income 4823 (Tk. in millions) % change of the balance 0
2006
2007
2008
2009
6744
4464
9739
10283
39.83%
-33.81%
118.17%
5.59%
The total operating income includes all the income a bank earned from the different areas of banking. The total operating income always show an ups and downward trend which is indicating that the bank need to work hard to improve every sector of its income to raise efficiency. Total operating income decrease in 2009.
Growth Rate
FIGURE TOTAL OPERATING EXPENSE 150% 100% 50% 0% -50%2005 -100%
Total Operating Expeense
2006 Year
2007
2008
2009
% change of the balance
Year 2005 2006 2007 2008 2009 Total Operating Expense 2682 3162 1683 3409 3839 (Tk. in millions) % change of the balance 0 17.90% -46.77% 102.55% 12.61% The total operating expense includes all the expense a bank incurred from the different areas of banking. The total operating expense shows an upward trend in 2008 and downward trend in 2009, which is indicating that the bank is improving every sector in its expense to raise efficiency. FIGURE: PROVISION FOR LOANS ADVANCES
Growth Rate
200%
Provision for Loans and Advances
100% 0% 2005 -100%
2006
2007 Year
Year Provision for Loans Advances (Tk. in millions) % change of the balance
and
2008
2009
% change of the balance
2005
2006
2007
2008
2009
3303
603
1618
1851
909
0
-81.74%
168.33% 14.40%
-50.89%
The provision is kept against the classified loan. The provision for loans and advances from 2007 to 2009 shows a downward trend in an average. So the change indicates that the percentage of classified loan is decreasing day by day. FIGURE: OPERATING PROFIT
Growth Rate
Operating Profit 125% 75% 25% -25% 2005
2006 Year
2007
Year Operating profit (Tk. in millions) % change of the balance
2008 2009 % change of the balance
2005 2140 0
2006 3581 67.34%
2007 2780 -22.37%
2008 6329 127.66%
2009 6444 1.82%
The rate of change for operating profit From 2007 to 2008 shows upward movement, after that the total operating profit decrease. It indicates that the skill of management is not good enough to hold the constant growth of operating profit. FIGURE: NET PROFIT
Growth Rate
250% 200% 150% 100% 50% 0% -50%2005 -100%
Net Profit
2006
2007 Year
Year Net Profit (Tk. in millions) % change of the balance
2008
2009
% change of the balance
2005 1634 0
2006 1939 18.67%
2007 858 -55.75%
2008 2646 208.39%
2009 1108 -58.13%
The rate of change for net profit from 2008 to 2009 shows downward movement. It indicates that the skill of management is not good enough to hold the constant growth of net profit. ASSET FIGURE: 4.4.1.1 CASH IN HAND
Cash in hand
Percentage
100% 50% 0% 2005 -50%
2006
2007
Year
Year Cash in hand (Tk. in millions) % change of the balance
2008
2009
% change of the balance
2005 991 0
2006 953 -3.83%
2007 1728 81.32%
2008 2079 20.31%
2009 1598 -23.14%
The cash in hand indicate the amount of liquid money the bank has to meet its current obligation. The bank cash in hand indicate that the trend is not good from 2007 to 2009 and the change is always negative. FIGURE: BALANCE WITH BANGLADESH BANK
Growth Rate
30%
Balance with Bangladesh Banks
20% 10% 0%
-10%2005
2006
2007 Year
2008
2009
% change of the balance
Year 2005 Balance with Bangladesh Bank 7883 (Tk. in millions) % change of the balance 0
2006
2007
2008
2009
7455
6855
6583
7938
-5.43%
-8.05%
-3.97%
20.58%
The balance with Bangladesh Bank indicate that the ability to maintain required reserve by the bank. Here we saw that the ability to maintain the reserve is upward trend from 2008 to 2009.
Growth Rate
FIGURE BALANCE IN WITH OTHER BANK IN BANGLADESH 200% 150% 100% 50% 0% -50%2005 -100%
Balance in With Other Bank in Bangladesh
2006 Year
Year 2005 Balance in With Other Bank in 7510 Bangladesh (Tk. in millions) % change of the balance 0
2007
2008
2009
% change of the balance
2006
2007
2008
2009
1820
1111
1033
2776
-75.77%
-38.96%
-7.02%
168.73%
The balance with other bank in Bangladesh indicates the money deposited with other bank as an investment. This is an asset for a bank. We saw here the balance has negative trend up to 2008 and it increase in 2009. FIGURE: MONEY AT CALL SHORT NOTICE
Growth Rate
150%
Money at Call and Short Notice
100% 50% 0% -50%2,005
2,006
-100%
2,007 Year
2,008
2,009
% change of the balance
Year 2005 Money at Call and Short Notice 1370 (Tk. in millions) % change of the balance 0
2006
2007
2008
2009
750
1110
820
1700
-45.26%
48.00%
-26.13%
107.32%
The money at call and short notice indicate that the bank ability to borrow fund from call money rate. The decreasing trend indicates that the bank did not need to borrow from the market but it increase in 2009. FIGURE INVESTMENT (GOVERNMENT )
Growth Rate
50%
Investment (Government)
25% 0% 2005 -25%
2006
2007
Year
Year 2005 Investment ( Government) 22288 (Tk. in millions) % change of the balance 0
2008
2009
% change of the balance
2006
2007
2008
2009
20191
19714
27110
37958
-9.41%
-2.36%
37.52%
40.01%
Investment in government bond is a very risk less investment for a bank. The bank will get a specific return, this will increase the profit. The bank shows a positive trend after the bank was incorporated as a company. FIGURE INVESTMENT (OTHERS )
Growth Rate
40% 30% 20% 10% 0% -10%2005
Investment (Others)
2006 Year
Year Investment (Others) (Tk. millions) % change of the balance
2007
in
2008 2009 % change of the balance
2005
2006
2007
2008
2009
2041
2114
2187
2219
2938
0
3.58%
3.45%
1.46%
32.40%
The investment in other areas means the investment in shares, debenture and bonds. The bank investment activity increase significantly after 2008. The graph shows an upward trend. FIGURE LOAN CASH CREDIT & OD
Growth Rate
15%
Loan Cash Credit & OD
10% 5% 0% -5%2005
2006
2007
2008
2009
-10% Year
Year 2005 Loan Cash Credit & OD 95861 (Tk. in millions) % change of the balance 0
% change of the balance
2006
2007
2008
2009
101769
115597
110597
119949
6.16%
13.59%
-4.33%
8.46%
The loan cash credit and overdraft is the main asset for the bank. Increase in the loan asset and overdraft show the strength of the bank portfolio. The bank always shows a positive increasing trend in the loan cash credit and OD except in 2008. FIGURE BILLS PURCHASED AND DISCOUNTED
Growth Rate
20%
Bills Purchased and Discounted
0% 2005 -20%
2006
-40%
2007
Year
2008
2009
% change of the balance
Year 2005 Bills Purchased and Discounted 3543 (Tk. in millions) % change of the balance 0
2006
2007
2008
2009
4099
2896
2764
2287
15.69%
-29.35%
-4.56%
-17.26%
The bill purchase and discounted is asset for the bank. The bank always shows a down trend in the graph from 2005 to 2009.it indicates that the bank position in bill purchased and discounted is not always same. FIGURE OTHER ASSET
Growth Rate
140%
Other Asset
100% 60% 20% -20% 2005
2006
Year
2007
2008 2009 % change of the balance
Year Other Asset (Tk. in millions)
2005 13362
2006 13672
% change of the balance
0
2.32%
2007 30347 121.96 %
2008 31162
2009 31555
2.69%
1.26%
The bank investment in other asset which is not the core part of the bank business shows an increasing trend in the 2006 to 2008. It indicates the bank is increasing its investment in different asset year by year. LIABILITY FIGURE BORROWING FROM OTHER BANK
Borrowing from Other Bank Growth Rate
200% 100% 0% 2005 -100%
2006
2007
Year
2008
2009
% change of the balance
Year 2005 2006 2007 2008 2009 Borrowing from Other Bank 4180 3911 9422 2105 1192 (Tk. in millions) % change of the balance 0 -6.44% 140.91% -77.66% -43.37% The bank needs to borrow from other bank when it has shortage of fund. Increase in borrowing will increase the liability for the bank. Agrani bank borrowing from other bank shows a decreasing trend from 2007 to 2008. It indicates that the bank need not borrow fund from other bank to meet its obligation. But after 2008 the graph is upward trend. FIGURE: CURRENT DEPOSIT
Current Deposit
Growth
30% 20% 10% 0% 2005
2006
2007
Year
Year Current Deposit (Tk. in millions) % change of the balance
2008 2009 % change of the balance
2005 14223 0
2006 2007 2008 17087 21164 24823 20.14% 23.86% 17.29%
2009 28028 12.91%
The current deposit is the one of biggest source of fund for a bank. Agrani bank always shows an upward trend to collect the current deposit. So it indicates that the bank always improving its efficiency in collection of current deposit. FIGURE BILLS PAYABLE
Bills Payable
Growth Rate
40% 20% 0% -20%2005
2006
2007
2008
2009
-40% Year
% change of the balance
Year Bills Payable (Tk. in millions) % change of the balance
2005 3002 0
2006 2318 -22.78%
2007 2008 3066 3015 32.27% -1.66%
2009 2935 -2.65%
The bills payable is a current liability for the bank. The bank always shows the bills payable moves ups and down in year to year. FIGURE:SAVING BANK DEPOSIT Saving Bank Deposit
Growth Rate
15% 10% 5% 0% 2005
2006 Year
2007
2008
2009
% change of the balance
Year 2005 Saving Bank Deposit (Tk. in 52014 millions) % change of the balance 0
2006
2007
2008
2009
57853
60011
64855
69655
11.23% 3.73%
8.07%
7.40%
The saving deposit is the one of biggest source of fund for a bank. Agrani bank shows an upward trend from 2007 to 2009 to collect the saving deposit. So it indicates that the bank improving its efficiency in collection of saving deposit. FIGURE FIXED DEPOSIT RECEIPT
Growth Rate
30%
Fixed Deposit Receipt
20% 10% 0% -10%2005
2006
-20%
2007 Year
2008
2009
% change of the balance
Year 2005 Fixed Deposit Receipt 61593 (Tk. in millions) % change of the balance 0
2006
2007
2008
2009
51661
51678
54120
65663
-16.13%
0.03%
4.73%
21.33%
The fixed deposit is the one of biggest source of fund for a bank. Agrani bank shows an upward trend from 2006 to 2009 to collect the fixed deposit. So it indicates that the bank always improving its efficiency in collection of fixed deposit. FIGURE OTHER LIABILITY
Other Liability
Growth Rate
20% 10% 0% 2005 -10% -20%
2006 Year
Year Other Liability (Tk. in millions) % change of the balance
2007
2008
2009
% change of the balance
2005 37777 0
2006 36572 -3.19%
2007 37593 2.79%
2008 31985 -14.92%
2009 35145 9.88%
The bank involvement in other asset which is not the core part of the bank shows a decreasing trend in 2008. It indicates the bank is decreasing its involvement in other liability but it increase in 2009. FIGURE: TOTAL LIABILITY
Total Liability
Growth Rate
15% 10% 5% 0% -5%2005
2006 Year
2007
Year Total Liability (Tk. in millions) % change of the balance
2008 2009 % change of the balance
2005 172792 0
2006 169404 -1.96%
2007 182937 7.99%
2008 180906 -1.11%
2009 202621 12.00%
The total liability shows a decreasing trend in 2008. It indicates that the bank is improving its efficiency to decrease its liability. But the very next year the liability increase rapidly. FIGURE STATUTORY RESERVE
Growth Rate
Statutory Reserve 350% 150% -50% 2005
2006 Year
2007
Year Statutory Reserve (Tk. in millions) % change of the balance
2008
2009
% change of the balance
2005 145 0
2006 145 0.00%
2007 159 9.66%
2008 737 363.52%
2009 1389 88.47%
The statutory reserve is mandatory reserve which is kept by the bank from retained earnings. It is part of capital. The increasing trend in statutory reserve indicates that the bank capital is increasing to meet the Basel II requirement. But it decreased in 2009. RATIO ANALYSIS CREDIT RISK RATIO FIGURE RATIO OF NON PERFORMING ASSET
TO
TOTAL LOANS AND LEASES
Ratio of Non Performing Asset to Total Loans and Leases
30% Percentage
20% 10% 0%
Ratio of Non Performing Asset to Total Loans and Leases
2005
2006
2007
2008
2009
28.31%
26.27%
26.83%
22.49%
19.42%
The ratio of non-performing asset to total loans and leases describe the amount of loan which are the not giving profit to the bank. If the ratio increase it indicates the bank repayment policy is not good and the bank is not efficient to select right borrower. The bank is trying to increase the efficiency by reducing non performing loan. Here in 2009 the non performing assets to total loans decrease. FIGURE RATIO OF ANNUAL PROVISION
FOR
LOANS LEASES TO TOTAL LOANS AND LEASES
Ratio of Annual Provision for Loans Lesses to Total Loans 20%
Percentage
15% 10% 5% 0% Annual Provision
2005
2006
2007
2008
2009
14.49%
12.63%
11.73%
10.17%
9.71%
The provision is kept against nonperforming loan to offset the risk. If the ratio increase then it will indicate that the amount of nonperforming loan increasing. The bank ratio is decreasing it indicate that the bank non performing loan management is improving from 2005 to 2009. FIGURE RATIO OF ANNUAL PROVISION
TO
EQUITY
Ratio of Annual Provision to Equity Capital 500% 400% 300% 200% 100% 0% Ratio of Annual Provision to Equity Capital
2007
2008
2009
416.17%
179.60%
129.44%
CAPITAL The provision is kept against nonperforming loan to offset the risk. If the ratio increase then it will indicate that the amount of nonperforming loan increasing. Here the ratio decreases which indicate that the provision borne by the shareholder is also decreasing. LIQUIDITY RISK FIGURE
NET LOAN TO TOTAL ASSET Net Loan to Total Asset
25% 20% 15% 10% 5% 0% Net Loan to Total Asset
2005
2006
2007
2008
2009
15.64%
14.48%
11.76%
15.66%
19.31%
The net loan to total asset increases from 2007 to 2009. This is a good sign for the bank, because the loans and advances are the core part of banking business. FIGURE CASH AND DUE
FROM
DEPOSIT BALANCE HELD AT OTHER BANK
TO
TOTAL ASSET
Cash and Due from Deposit Balance Held at Other Bank to Total Asset 15% 10% 5% 0%
Cash and Due from Deposit Balance Held at Other Bank to Total Asset
2005
2006
2007
2008
2009
10.69%
7.19%
6.41%
5.40%
5.91%
The cash and due from deposit balance held at other bank to total asset decreases from 2005 to 2008. So it indicates that the bank does not have enough cash to meet current demand of liquidity. In 2009 the condition slightly improved. FIGURE CASH ASSET
AND
GOVERNMENT SECURITY
TO
TOTAL
Cash Asset and Government Security to Total Asset
30% 20% 10% 0% Cash Asset and Government Security to Total Asset
2005
2006
2007
2008
2009
20.03%
18.56%
15.19%
15.89%
16.48%
The cash asset and government security to total asset always show down movement from 2005 to 2007, but the range is always above .10.so this ratio indicate that bank have enough liquid asset to meet the sudden demand of deposit withdrawal. PROFITABILITY FIGURE RETURN ON ASSET (ROA)
Return on Asset (ROA) Percentage
2%
1% 0%
Return on Asset (ROA)
2005
2006
2007
2008
2009
1.05%
1.26%
0.46%
1.41%
0.52%
ROA is primarily an indicator of managerial efficiency. The returns on asset increased from 2005 to 2006, but at the close of 2007 the ratio decreased. In 2008, the ratio again increased. So it indicates that the management of the bank has been converting the institution’s asset into net earning efficiently. FIGURE NET INTEREST MARGIN Net Interest Margin
6% 4% 2% 0% Net Interest Margin
2005
2006
2007
2008
2009
1.73%
2.96%
3.69%
4.24%
4.61%
The NIM measure how large a spread between interest revenue and interest cost management bas been able to achieve by close control over the bank earning asset and the pursuit of cheapest sources of earning. The NIM is showing a continuous improvement over the year. So the bank is capable enough to increase the spread. FIGURE RETURN ON EQUITY
Percentage
Return on Equity 50%
0% Return on Equity
2007
2008
2009
25.75%
41.28%
12.10%
ROE is a measure of the rate of return flowing to the bank shareholder. It approximates the net benefit that the stockholders have received from investing their capital in the bank. The ROE of the bank indicate that the shareholder return is increasing in 2008 but again decreased in 2009. 4.6 MAINTAINING CAPITAL ADEQUACY Capital adequacy symbolizes the financial strength and stability of bank. It limits the ceiling up to which banks can expand their business in terms of risk-weighted assets. Like all
commercial institutions, banks too consistently look at the way of expanding their operations by acquiring property, plant and equipment and shifting of branches to better commercial areas, 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 (overtrading), to improve the quality of banks, to leverage their growth and to lead to higher earnings on assets. The bank keeps a careful check on its adequacy ratio, as will be evident from capital adequacy ratio given below: 4.6.1 CAPITAL ADEQUACY
AS
PER BASEL-II (Amount in crore taka) 2009
A. Eligible Capital: 1. Tier-1 (Core Capital)
710.24
2. Tier-2 (Supplementary Capital)
281.21
3. Tier-3 (eligible for market risk only)
-
4. Total Eligible Capital (1+2+3)
991.45
B. Total Risk Weighted assets (RWA)
12,052.44
C. Capital Adequacy Ratio (CAR) (A4/B)*100
8.22%
D. Core capital to RWA (A1/B)*100
5.89%
E. Supplementary capital to RWA (A2/b)*100
2.33%
F. Minimum Capital Requirement (8%of RWA)
964.20
G. Capital Surplus (F-A)
27.25
Eligible Capital 1. Tier-I (Core Capital) Paid-up Capital
496.84
Statutory Reserve
138.94
General Reserve Retained Earnings Sub-Total:
0.50 73.96 710.24
2. Tier-II (Supplementary Capital) General Provision (UC)
114.09
Provision for off Balance Sheet exposure
52.97
Reserve on HTM & HFT securities@50%
103.24
Balance of exchange Equalization A/C Sub-Total
10.91 281.21
3. Tier-III (eligible for market risk only) Short-term subordinated debt
-
Sub-Total
-
4. Total Supplementary Capital(2+3)
281.21
5. Total Eligible Capital (1+4)
991.45
CONCLUDING REMARKS: Agrani Bank Ltd. is an established Bank in the country. From the time of establishment, it is gaining high impression from the people for its exceptional activities. Since today’s banking sector is highly competitive, so it has to improve its operation activities for better survival. For the improvement of the service the following measures should be taken: Providing more industrial loans The bank is an organization who supply fund from surplus sector to deficit sector. An organization is efficient if it can pull large amount fund from different sector society. The bank should its loan facility to the industrial sector. Establishment of large industry in our country will increase the GDP and solve the unemployment problem. Introduction of marketing team. Agrani bank Ltd. should introduce a Marketing team for each branch. Without a proper marketing team in today’s world no bank can gain market share. Marketing training for employees. Marketing training is necessary for every employee. Without it, it is impossible for them to collect customer. With the help of training the employee can make better approach to the customer, influence them and increase the bank value. Product for general people. Agrani Bank Ltd. should introduce different product and services to the group of people who are now out of banking services. They must introduce different deposit scheme, loan product for the lower part of the society. Ensure sufficient Manpower. The number of human resources in foreign exchange & in customer service is really insufficient to give service to huge number of customers. Development of Human Resources. Human resource is another sector for the branch to be developed urgently. Human resources in the branch need to be equipped with adequate banking knowledge. Majority of the human resources must be having basic knowledge regarding money, banking, finance, and accounting. Without proper knowledge in these subjects, efficiency cannot be optimized. Bank can arrange training program on these subjects.
Ensure Sufficient Forms and Brochures. There are always shortages of brochures, information materials etc. in the branch. These forms and brochures must be maintained in sufficient quantity. Otherwise, customer service will be hampered. More Gifts and Discounts for the Premium Customers. Premium customers should be offered occasional gifts and discounts, which can make the premium service more attractive and keep consumer delighted. The interest rates on several loan and deposit schemes should be differentiated for the premium customers. CONCLUSION : As an organization the Agrani Bank Ltd. has earned the reputation of top listed banks operating in Bangladesh. The organization is much more structured compared to any other listed bank operating in Bangladesh. It is relentless in pursuit of business innovation and improvement. It has a reputation as a leader in financing manufacturing sector. With a bulk of qualified and experienced human resource Agrani bank Ltd. can exploit any opportunity in the banking sector. It is pioneer in introducing many new products and services in the banking sector of the country. Moreover, in the retail-banking sector, it is unmatched with any other listed banks because of its wide spread branch networking thought the country. Agrani Bank Ltd. has a large portfolio with huge assets to meet up its liabilities. Management of this bank is equipped with the expert bankers and managers in all level of management. Agrani Bank Ltd. is able to adapt quickly with the changes in business environment. Its general banking service is widening by introducing online banking, its foreign exchange business also shows increasing trend. Agrani Bank Ltd. is also expanding its branch network to avail the more investment opportunity. It has very talented human resources and always recruits high quality executives in their management positions. It creates the possibility that this progress of Agrani Bank Ltd. will continue and could overcome its limitations whatever they have to produce good result in future. BIBLIOGRAPHY •
Agrani Bank Ltd, Annual Report 2009
•
Agrani Bank Ltd, Annual Report 2008
•
Agrani Bank Ltd, Annual Report 2007
•
Agrani Bank Ltd, Annual Report 2006
•
Agrani Bank Ltd, Annual Report 2005
•
Ministry of Finance, Bangladesh Economic Review. Dhaka, Bangladesh. 2004.
•
Agrani Bank Ltd, http://www.agranibank.org/
•
Bangladesh Bank, http://www.bangladesh-bank.org/