Operating Performance
 
 

Operating Performance 2012

In the light of various challenges posed by the local and global economic instability, the primary focus of the year 2012 was to sustain a reasonable growth. The principal aim of the bank for the financial has been to attain new clients besides retaining the old ones despite the emergence of new competitors in the market. Therefore, the Bank has formulated and implemented strategies to modify the current products for further development. Loan mobilization and deposit mobilization has also been a vital concern of the bank for the year. Overall, the business objective had been to make the products offered by the bank, more accessible to a greater number and genre of clients. The bank has, and intends continue to serve its clients in the best possible way.

At the end of the year 2012, performance in terms of major business drivers of the core banking business were as follows:

Tk / Crore Growth in 2012 Year 2012 Year 2011
Deposit 21% 14,002 11,615
Loan 12% 10,606 9,464
Import 26% 10,037 7,946
Export 14% 6,578 5,759
Guarantee (2%) 1,320 1,352
Remittance USD (13%) 22 25

Corporate Business

AB Bank offers a full array of Financial Services to Corporate houses and Institutions. Corporate & Structured Finance Division, a strategic business unit, has been striving on to provide sharper focus and intimate care to this major revenue generating source. Corporate Loans currently represent 64.51% of total credit portfolio of the Bank covering wide range of industrial and business houses of the country. In view of complexities and intricacies’ of corporate financing, Bank maintains close relationship with the clients to provides customized products & services including Working capital facilities, Trade Finance, Post Import Finance etc. The division also provides Loan & Equity Syndication, Corporate Advisory services and Structured Trade solutions through Structured Finance.

Corporate Loans has experienced growth of 17.58% over 2011 whereas growth of SME segment was 5.13%. 
With slow revival of economy, AB Bank has been following growth strategy for corporate portfolio with dominant presence in Manufacturing particularly in RMG, Textiles, Food as well as Steel & Trading. Steel, Ship building, Ship scrapping, Real estate, Pharmaceuticals, Telecommunication, Power etc. has been other areas of interest for corporate business.  

In respect of Syndication loan, Bank was mandated as Lead Arranger in one venture in the Power Sector. Bank also participated as Member in four syndication ventures.

AB Retail
Alternative Delivery Channels:

Nearly three decades of service with a wide range of products blended with latest technology, AB Bank Limited is poised to steer e-Banking with 86 Branches and 231 ATMs under Cashlink Bangladesh Limited (CBL) network, located at urban and rural areas around the country.  To ensure seamless service, ABBL has invested an extensive amount in mounting its e-Banking infrastructure.

AB Bank Limited used latest NCR branded ATMs throughout the country with 24X7 video vigilances on these ATM Booths. ABBL customers can avail the services like: Cash Withdrawal, Balance Inquiry, PIN Change and Mini statement. Customers of other Banks can enjoy the ABBL ATM facilities.

AB Bank has introduced the first ever embossed Visa Debit Card in the country with two different flavors- Visa Debit Silver for Elite Customers and Visa Debit White for regular customers. These cards are accepted at more than 4,000 retail outlets through Visa POS Terminals across the country. 

AB Bank is planning to expand the network with 300 ATMs in 2013.  The Bank will also introduce Credit Cards in 2013.

With the accelerated growth of mobile phones and to penetrate a large un-banked population in Banking, Bank has introduced SMS Banking. Through this channel AB Bank customers can avail services like- Balance Inquiry, Mini Statement, PIN Change, Fund Transfer, Mobile Top Up and Mobile Bill Payment respectively.

ABBL has established a call center where the ABBL customers can get the answers of any Banking related queries. Setup of Interactive Voice Response (IVR) in the Call Center is one of the priorities for AB Bank in the near future.

Consumer Banking

Consumer Banking Division was set up with a view to increase the customers’ reach in terms of product and services in terms of both asset and liability. The portfolio under consumer credit was Tk. 399 crore which is Tk. 42 crore higher than the previous year 2011. The growth, however, was in line with Bangladesh Bank guidelines.

Asset Products

The Asset products are divided in to the following four broad categories:


Consumer Asset Products

Liability Products
Asset Performance in 2012

Total outstanding in CCS Loans as of December 2012 is Tk. 399 crore which is 3.87% of the total LDOs of the Bank.

Liability Performance in 2012

In the year 2012, the volume of liability products was Tk. 2337 crore higher compared to that of 2011 which is considered as inspiring performance, from Tk.10,987.14  crore to Tk. 13,324.39 crore. The following table shows the increase in amount of liability products in 2012:

Establishment of Consumer Banking Centre & Their Performance

Consumer Banking Centre was set up at 17 different branches strategically located at three regions- Dhaka, Chittagong & Khulna. In 2012 total no of accounts booked through these 17 centers were 4287 and total deposit procured was Tk. 434 crore.

SME Business

Small and medium sized enterprises (SMEs) are playing increasingly important role as engines of economic growth of Bangladesh. There is a broad consensus that a vibrant SME sector is one of the principal driving forces in the development of the economy of Bangladesh. SMEs stipulate private ownership and entrepreneurial skills and can adapt quickly to changing market situation, generate employment, help diversity economic activities and make significant contribution to exports and trade. Keeping pace with the ongoing progressive changes in SME sector in Bangladesh AB has been relentlessly serving the entrepreneurs establishing a separate division named “SME Banking Division” since 2008 to give emphasis on SME financing, to ensure regulation, supervision and monitoring of SME’s. SME Division is the focal point of all SME related issues, programs and projects and responsible for providing best financial solution to its customers. Management’s strong commitment towards SME Banking, appropriate policy guideline, customized products for customers, consolidated database, compliance culture lead the SME Division to further higher platform of SME Banking in the country. AB’s SME consecutively stood 4th among the Banks operating in the country-in terms of SME Loan Disbursement in 2012.

Coverage

AB Bank operates SME programs through its 86 branches and 11 SME Centers across the country. “SME Desks” and “Women Entrepreneurs Dedicated Desks” have been established in every branch. Regional Focal Person was also appointed to ensure proper services and handle queries and complains of the customers. A good number of sales persons are working in the SME Centers. The main objective of the SME Centers is to take the banking services and products to SME’s doorsteps, provide advisory service with the view of financial inclusion and searching new entrepreneurs.

AB’s SME Business has been growing substantially and contributed 30.82% of its total loan portfolio as at December 2012.

Financing Small Enterprise sector is one of the motto of AB SME and are maintaining 43% of SME portfolio in this sector. AB provided 29.82% of SME Loans to Manufacturing sector with a long-term view to employment generation and poverty alleviation.

Loans to Women Entrepreneurs

AB prioritizes its lending to Women Entrepreneurs.  A specialized SME Loan Product named “Awparajita” is developed to cater them. As of 31st December 2012, the outstanding amount of Loans & Advances extended to Women Entrepreneurs was Taka 103.39 Crore which is 3.25% of Total SME Loans.

AB in Agricultural and Rural Credit/financing

AB has good presence in Agriculture and Rural Credit. The financing are fundamentally in Crop, Fisheries, Solar Energy, Bio-gas, ETP, Livestock areas. To patronize crop lending, AB’ signed agreements with different micro-finance institutions and arranged “Open Agriculture and Rural Credit Distribution” event at different regions. AB also disbursed Agricultural Credit at Concessional Interest rate for the purpose of Cultivation of Pulses, Oil, Seeds, Spices and Maize during this year.


Photo 1: Agriculture Loan Disbursement Program at Jessore. 


Photo 2: Agriculture Loan Disbursement Program at Sirajganj.

AB has been successfully achieving the annual target as set by the central bank since 2011 and being appreciated by the respective department of Bangladesh Bank for achieving the target.

Fig: AB’s Finance in Poultry Farm at Rangpur & Cow fattening project at Kushtia

 SME Priorities in 2013

  • Give emphasis on Service & Manufacturing sectors; priority sector based lending
  • Grow selective based on geography, historic trends and market potential
  • Focus on Rural Branch for SME & Agri Business
  • Focus on trade finance and non-funded business
  • Continue focusing on branch and customer- intensive monitoring & follow-up through dedicated Business Team
  • Organize staff training and development
  • Launching special SME Business Products

Investment Banking Division (IBD) was established to “formalize” the capital market operations of the Bank under “One Umbrella” in the year 2006. With the formation of the two subsidiaries viz AB Investment Ltd. (ABIL) and AB Securities Ltd. (ABSL), role of IBD has been transformed into a “Strategic Unit” and also a “Functional Unit” to deal with business which will be centrally driven. Accordingly, Custodian Unit continues to operate under IBD. IBD is also entrusted with the operation of the Portfolio Investment of the Bank. At the same time, IBD will continue to provide one-stop service to NRB’s and Foreign Investors interested to invest in Capital Market here. In its destined role of strategic support, IBD shall be the platform for co-ordination for Capital market subsidiaries of AB besides being the vehicle for strategic investment of the Bank in future.

AB’s last five years portfolio Investments (Quoted shares) are shown below:    

AB Bank 1st Mutual Fund

Bank approved participation as a Sponsor in the “AB Bank 1st Mutual Fund” to the tune of Taka 30 (thirty) crore having fund size of Taka 150 crore.

Name   of   the  Mutual Fund AB Bank 1st Mutual Fund  
Fund Duration Closed End Mutual Fund, with Fund Life of 10 years
Fund Size BDT 150 crore
Fund Capital Structure Sponsor 20%, Pre- IPO Placement 30%, Public 50%
Face Value BDT 10/unit
Lot Size 500 unit

The fund has been listed with Dhaka and Chittagong Stock Exchange on January 29, 2012.

On the close of operation on December 31, 2012 the Fund has reported Net Asset Value (NAV) of Tk. 10.91 per unit on the basis of current market price and Tk. 10.74 per unit on the basis of cost price against face value of Tk. 10.00 whereas total Net Assets of the Fund stood at Tk. 1,636.50 million on the basis of market price and Tk. 1,611.00 million on the basis of cost price after considering all assets and liabilities of the Fund.

Internal Control & Compliance Division (ICCD) includes three fold functions viz. Internal Audit, Monitoring and Compliance. ICCD conducts Risk Based Audit and Annual Audit of the Branches. Audit of Head Office Divisions also come under ICCD. ICCD monitors compliance of Internal as well as Bangladesh Bank Audit Reports including Bangladesh Bank Special Audit Reports on Core Risks. Besides, Special Audit on some specific issues like year-end Cash Position, Security Stock verification etc. are also done.
Internal Audit in 2012 completed:

Risk Based Audit of Branches: 85 Branches (including Mumbai Branch)
Annual Audit of Branches: 85 Branches (including Mumbai Branch)
Special Investigation: 20 Numbers

Off-Shore Banking Unit (OBU): Bank received the permission from Bangladesh Bank to operate an Off-shore Banking Unit at EPZ Branch in Chittagong in December 2009. Subsequently, AB’s Off-shore banking Unit commenced its operation from April, 2010. Given below is the highlight of the business performance of the OBU wing of the Bank for the financial year 2012:

Amount in Lac (BDT)
Particulars 2012 2011
Profit after Tax (PAT) 202.47 212.15
Deposits 56.13 239.25
Loans and Advances 6,476.60 5,198.23
Total Assets 6,586.10 5,228.30

Primary Dealership: Bangladesh Bank gave approval to AB as Primary Dealer (PD) in December 2009 aiming to boost the country’s secondary securities market. Inclusion of AB as PD is part of the latest move to increase the number of market makers to bring dynamism in the secondary securities market.

Operations Division of the Bank continued with taking forward different initiatives planned for the year. Network expansion, refurbished branding, enhancement of facilities, systems and process improvisation, development of compliance culture and improvement of customer service remained priority notable initiatives.

  • Bank Cash Management System: Improvement of operational efficiency
  • Cash related insurance policies: coherent approach through master arrangements in identified areas.
  • Automation of Excise Duty collection process
  • Reinvigorating the Locker operations
  • Further enhancing the coverage of Bangladesh Automated Clearing House (BACH) in Sylhet, Chittagong, Rajshahi, Barisal, Khulna, Rangpur, Bogra, Narayangonj and Pagla.

Branch Network Expansion

AB intends to have its presence in every district of the country in phases. Acquisition of land strengthened the Bank’s capacity for conducting operation from own premises with much more flexibility to provide service. A new branch opened in Habiganj in the bank purchased land.

Bangladesh Automated Clearing House (BACH) Activities in AB

A modern national clearing house payment system is the backbone for a country’s monetary and financial infrastructure. An advanced payment system plays a critical role in the country’s current and future economic development. For smooth, safe and faster operation of clearing, the following changes have been made in 2012.

  • In this year AB Bank has fully centralized the Inward clearing operation at Head Office and closed all zonal units. After centralization, all inward clearing instruments are processed from single point and no dependences stand on branches.
  • AB Bank has also decentralized the Outward Clearing Cheque processing system to the branches to provide maximum facility to our customer’s.  After decentralization, customers are getting same day clearing facility.
  • As recommended by Central Bank, AB Bank has also trained 200 officials for smooth operation of Bangladesh Automated Clearing House (BACH) to the bank.

Anti-Money Laundering (AML) Activities

AB Bank’s Anti Money Laundering (AML)  & Combating Financing of Terrorism ( CFT) revised Policy 2012 is prepared in line with AML Act & Anti Terrorisms (amendment) Act,2012. The Policy was approved by the board of directors in its 519th meeting held on February 17, 2013. It is compliance of BFIU, Bangladesh Bank to revise/update the Policy time to time. The revised Policies also include changes as advised by BFIU, Bangladesh Bank through various circulars issued from time to time & FATF recommendation 2012. The Bank regularly organized AML & CFT.

The Bank has already implemented AML software In Mumbai Branch, India, to fulfill the requirement of Reserve Bank of India. The AML software for Bangladesh operation is under implementation.

To see the implementation status of AML policy, CCU Head office started visiting branches from January -2012 by forming a visiting team to observe whether the rules and procedures on AML/ CFT policy are being practically applied by the branches.

The Bank has fulfilled all requirement as desired by Bangladesh Bank time to time during 2012. 

IT Division

AB Bank IT Division is taking forward the horizon of AB through rolling out initiatives, up-gradations, system consolidations among others and providing a platform for facilitating best possible customer service along with enablement for execution of strategic business needs.
The rapidly evolving banking needs have also led AB to give increased focus on information technology dependent products and solutions by adapting to state of the art technology platform.
Primary objective of the automation strategy is to optimize the business processes to reach customer in real time with their preferred banking channels and provide value innovation to achieve optimum customer experience.
Major IT Division initiatives in 2012 includes among others:

  • Implementation of BEFTN to integrate with Bangladesh Bank driven project for facilitating bank wide electronic fund transfer.
  • Rollout of BACH coverage to all ABBL branches.
  • iSeries upgrade and consolidation: hardware capacity enhancement initiative.
  • ALM (Asset Liability Management) software roll-out in Mumbai Branch, India to automate all aspect of ALM along with RBI Returns.
  • Implementation of Middleware to aggregate all channels with CBS.
  • Phase wise implementation of Cloud Infrastructure: The Always On, On-Demand Datacenter
  • CheckPoint implementation, Core Firewall for PCI DSS Compliance
  •  Mail Server Microsoft Exchange 2010 with High Availability (HA)
  • Renewal of Microsoft Enterprise Agreement   with Microsoft

 Human Resources Management (HRM)

The HR Division of AB Bank Limited is moving forward with a vision of converting human resources into human capital through the processes of providing appropriate knowledge, skills, abilities and personal attribution. As people become the key competitive advantage in any industry especially banking, the Human Resource (HR) development function will and should play a more strategic role in the era of fierce competition within this sector. AB Bank Limited thrives to provide competitive pay & allowance package, contemporary HR policies, learning environment and congenial working atmosphere where employees enjoy working with pride as we believe that the play the pivotal role behind the success stories and sustainable growth. The level of dedication, professionalism, winning sprit and drive to achieve are the most significant factors toward the success of the Bank which is remarked over the last glorious 31 (thirty one) years of our presence in the banking industry. AB’s HR strategy is focused at ensuring sustainable growth through steady and stable value creation for all the stakeholders including the employees.

By developing and strengthening the core competencies of our human capital, valuing their unique perceptions and enabling them to contribute positively to our success, ABBL helps them to fulfill their latent talent. As a reciprocal process and commitment towards the Bank, our employees deliver their best performance and service to the customers and stakeholders. Thus, working with ABBL is like a passion for its Human Resources.

The HR Division of ABBL provides relentless efforts and guidelines in each stage of “Career Life Cycle” of the employees starting from hire to retire. The Division has proficiently aligned its core HR functions i.e., recruitment, compensation, separation, discipline, training & development and organization development in line with the business strategies of the Bank.

Human resource Strategies:

  • Fostering High Performance Work culture by effective Performance Management System & Job Description, constant focus on serving the customers in each every horizon.
  • Strengthening HR System and Practice.
  • Team Building: Awareness of our competitive advantage, working with teams from different background as AB Family.
  • Talent Management – The AB Way Program: Supporting the best talents as a mean of expanding the business.
  • As a business partner, to create a sense of accountability among the AB employees, we provide opportunity to them based on a shared commitment to devote their talents to benefitting the business and to develop the own.
  • Employee Motivation through Reward and Recognition (Promotion, Increment, Incentives etc.) on the basis of Performance, Employee Engagement Events, skill and competency development.
  • Manpower Planning through right-sizing and Assessment Strategy aligned with mission, goals, and organizational objectives and integrated into its strategic plans, performance plans, and budgets.

Workforce Diversity:

At the end of year 2012, the total manpower of ABBL was 2,070 (Two Thousand and Seventy) worked in 86 (eighty six) branches and different divisions at Head Office and 01 (one) overseas branch at Mumbai, India. The bank strongly encourages and facilitates the females to take part in workforce and to take leadership.

Total Workforce by Age Group:

Age Group 2010 2011 2012
Above 55 Years 92 82 72
45-55 Years 455 450 438
35-45 Years 768 766 755
25-35 Years 693 795 796
Below 25 Years - 03 09
Total 2,008 2,096 2,070

Recruitment and Selection

The Recruitment and Selection process of AB Bank Limited dynamic and transparent and always focused on attracting the high potential individuals. Bank employs highly distinguished consultancy firm to professionally conduct the assessment of fast tracker recruitment at the entry level. The fast trackers are the Management Trainees (MTs) who are groomed and nurtured to take over the future leadership position. Bank also recruits fresh graduates to perform the jobs of basic operational level in the capacity of Trainee Officers (TOs). Besides, Bank is focused on recruiting the proven leaders as lateral entrants. AB also participates in job fairs at reputed academic institutions as part of employer branding.

AB Bank Training Academy: A House that Facilitates Learning:

Learning and development of employees always remain among the highest priorities at AB. All the employees of AB go through rigorous learning process (both on-the-job and formal training courses) to enable perform up to the potential. MTs who join AB attend “Induction Program” at the very beginning of joining. Subsequently, Foundation Training through BIBM, other trainings through AB bank Training Academy, Career Counseling Session, On-the-job training through job rotation, foreign visit and exposures are provided to MTs to help them reach maximum potential and grow with the organization. Other than MTs; TOs and lateral entrants also receive frequent work related trainings arranged internally and externally (including foreign).

Training at AB is coordinated through AB Bank Training Academy. Training Academy is aimed at enhancing the employees’ job related knowledge, skills and managerial competencies. Each year, the Bank invests significantly on employee development and training both at home and abroad. During 2012, a total of 3,673 participants attended in total of 209 trainings courses.

Training Organized Number of Participants 2010 Number of Participants 2011 Number of Participants 2012
In-house (internal) 2867 3172 3317
Local (External) 151 213 343
Foreign 79 11 13
Total 3097 3396 3673

Treasury Functions

AB Bank Treasury is an integrated unit managing the Liquidity, Interest rate and Foreign Exchange Risks. The Treasury of the Bank is engaged in day to day Fund Management. It also invests in Govt. Securities to meet the regulatory compliance. To manage the fund this unit deals in Inter-bank in line with the Bangladesh Bank’s laid down policies and guidelines. As a Primary Dealer, Govt. Securities devolved by Bangladesh Bank on AB is managed by this division. Treasury division is broadly divided into ALM and Foreign Exchange desk. Treasury Operations primarily maintain the statutory requirements. Prudent Money Market and Foreign Exchange Operations however contribute significant interest and exchange earnings.

Year 2012 was a challenging year of Treasury in terms of managing FX Risk, Interest Rate Risk and Liquidity Risk of the Bank. Up to August 2012, the Inter-bank money market was very volatile.

To ease the liquidity situation Bangladesh Bank has taken the following steps:

  • Increased the REPO & Reverse Repo rates by 50 basis point. In 2012, repo rate was 7.75% and Reverse Repo was 5.75%.
  • To ease the liquidity pressure on PD banks, Bangladesh Bank introduced re- measured facility and  re-fixed HTM and HFT securities  ratio as 85:15
  • In 2012, Bangladesh Bank introduced online trading platform naming “TCS Market Infrastructure (MI Module)” containing Trader Work Station (TWS) for smooth operation of Govt. securities trading and to create a dynamic secondary market.

In the year 2012, there was no CRR/SLR short fall and no breach of Net Open Position (NOP) limit though the market was too volatile. Treasury successfully used all types of money market and foreign exchange instruments to efficiently manage the funds to ensure optimum Balance Sheet spread.

Financial Institutions Unit

FI marketing team facilitated trade business on behalf of the AB Bank Mumbai branch and AB International Finance Limited (ABIFL), Hong Kong.  FI Marketing is primarily engaged in harnessing Reimbursement Authorities / Payment Instructions and scouting of LC advising from different commercial Banks for Mumbai Branch. For ABIFL this marketing team procured foreign trade related business like advising LCs, confirmation of LCs and discounting of bills. AB holds the major share in this line of business.

International Trade

International Trade has significant value addition to AB’s Business profile. In 2012, Both Import and Export business experienced growth compared to previous year.

Import Business reached Taka 10,037 crore which was Taka 7,946 crore in 2011. Import bucket of AB covers areas like scrap vessels, food items, chemicals, medicines, textiles, capital machineries etc. Total Import growth was 26% in the year 2012.

Total Export growth of AB was 14% in the year 2012 compared to the previous year. Total Export reached Taka 6,578 crore at the end of the year which was Taka 5,759 crore in 2011. Export business was concentrated in frozen fish, readymade garments, knitwear and other indigenous products.

AB’s Foreign correspondent relationship covers most of the important financial centers and financial institutions. About 425 correspondents comprises correspondent banking platform of the Bank facilitating its expanding international trade business and customer service.

Remittance Initiative

AB strengthened the existing remittance relationship with various exchange houses in 2012. AB is focusing on enhanced customer services through the existing Branches. Dedicated “Remittance Hub” centrally located at Head Office backed by advanced technology platform helped expanding the Bank’s service to the doorstep of the customers.  Corporate clients of AB remained another major source of foreign currency. Bank is also trying to broaden its base through solicitation of indigenous export clients. Total remittance at the end of the year stood at USD 211.48 million in 2012 as against USD 226 million in 2011.

Foreign Investments

AB expanded its wings in international banking arena in 2010 through acquisition of 15 per cent Equity investment in Amana Bank Limited (ABL) in Srilanka’s 1st Islamic Bank. Total worth of investment is Taka 42.18 crore equivalents to USD 6.06 million. Earlier BB cleared the investment proposition on 13th June, 2010. The Monitory Board of the Central Bank of Srilanka conferred a commercial banking license in favour of the ABL recently. Major stakeholders of the Bank includes Bank Islam Malaysia Berhad, Islamic Development Bank, Saudi Arabia besides AB Bank Ltd.

AB Exchange (UK) Limited, London, UK, a 100% owned subsidiary of AB Bank Limited has commenced its operation with effect from 31.05.2011. AB Exchange (UK) Limited is engaged in Remittance Business and facilitating expatriate Bangladeshis residing in UK to send their remittances through official channel in a secured, reliable and expedient manner.

In addition to 86 branches of ABBL, Bangladesh, designated branches of BURO Bangladesh and designated CCPs of Pacific Bangladesh Telecom Limited are acting as distribution channel of ABEL.

Overseas operations

Mumbai Branch, AB Bank, India

AB Bank Limited, Mumbai Branch is the only Bangladeshi Bank based in Mumbai which caters Indo-Bangla trade. The Branch was established in the year 1996 and since inception, in addition to corporate banking services. it is engaged in handling LCs and documents arising out of exports from India to Bangladesh. The Branch also adds confirmation, negotiate and discount documents. Mumbai Branch is connected to AB’s central network system to provide an advanced technology platform for the Branch’s operations. Branch’s Operating Profit at the year-end 2012 was INR142.76 million registering a growth of 15.35 %.

Major KPIs of the Branch in 2012

Basel II 2012 2011 2010
CRAR – Overall 26.28% 35.17% 34.19%
CRAR – Tier I 25.70% 34.45% 33.73%
CRAR – Tier II 0.58% 0.72% 0.45%
Operating Profit to Total Working Funds 6.49% 12.69% 10.55%
Fee based income to Total income 82.90% 83.87% 86.10%
Return on Total Assets 5.45% 5% 4.66%

Operating results of Mumbai in 2012

Particulars 2012 2011 2010
Profit after tax (PAT)- INR Million 93.57 60.76 51.23
Return on assets (%) 5.45% 5.00% 4.66%
Return on equity (%) 12.88% 10.08% 9.36%

AB international Finance Limited (ABIFL), Hong Kong

ABIFL started its operations in 1995 and in primarily engaged in advising, adding confirmation of documentary credit, negotiation and discounting of bills under LC. ABIFL is also involved in remittance business. ABIFL's performance in 2012 was satisfactory all round.

Operating results of ABIFL in 2012:

Particulars 2012 2011 2010 2009
Profit after tax (PAT) – HKD Million 9.21 9.63 6.80 4.71
Return on assets (%) 5.54% 5.55% 4.33% 3.90%
Return on equity (%) 50.23% 60.70% 48.57% 38.44%
Earnings per Share- HKD 92.07 96.29 67.98 47.07

Local Subsidiaries

AB Investment Limited (ABIL)

After incorporation on 24th day of December 2009 AB Investment Limited (ABIL), a wholly owned subsidiary company of AB Bank Limited, started its operation on the 10th day of March, 2010. Clients of ABIL avail the following services:

The number of clients of AB Investment Limited is about 2,749 and it comprises of Local Individual & Institutional clients along with NRBs and Foreign Individuals. ABIL has six panel brokers to perform trading of its clients and of own portfolio. Total portfolio of ABIL was more than Tk. 9.88 billion in 2012 which is 0.41% of the total market capitalization. Currently, ABIL operates from its Head Office in Dhaka and two branch offices in Chittagong & Sylhet.

AB Investment Limited has already introduced Corporate Management Discretionary Services for the Corporate Clients. Product features are given below:

Product at a Glance

Target Client: All corporate companies currently operating in Bangladesh
Margin Facility: Nil
Minimum Deposit Requirement: Taka 1,000,000 (Flexible)
Investment Basis: Long Term Investment
Management Fee: 1% of Market Value ** (charged quarterly)
Transaction Commission: 0.25% on trade value
Documentation Fee: Taka 1000

Note: Portfolio Management Fee will be 1% of market value of the portfolio which will be charged quarterly. A review of profitability of each Corporate MDA on quarterly basis where ABIL will rebate the management fee if client’s minimum return on equity (3.5% per quarter, 14% per annum) is not achieved.

Performance of ABIL

AB Securities Limited (ABSL)

After incorporation on 24th day of December 2009, AB Securities Limited (ABSL), a wholly owned subsidiary company of AB Bank Limited, started its operation on the 2ndday of August, 2011. ABSL is a corporate member of both Dhaka Stock Exchange Limited (member # 201) and Chittagong Stock Exchange Limited (member # 101).

The number of clients of AB Securities Limited is around 2,500 and it comprises of Local Individual & Institutional clients along with NRBs and Foreign Individuals. ABSL also acts as one of the Agent Broker of AB Investment Limited. Total turnover of ABSL was more than Tk. 25.83 billion in 2012 which is 1.19% of the total market. ABSL stood 20th in Dhaka Stock Exchange and 45th in Chittagong Stock Exchange in terms of turnover. Currently, ABSL operates from its Head Office in Dhaka and two branch offices in Chittagong & Sylhet.

Services provided by ABSL

For Foreign Nationals and Non-Resident Bangladeshi (NRB)s, we provide one stop stock broking services including assistance in opening Foreign Currency (FC) account & Non-Resident Investor’s Taka Account (NITA), BO account opening and trading at DSE and CSE.

Cashlink Bangladesh Limited (CBL) is a subsidiary of AB Bank Limited. CBL was incorporated on 24th September 2008 with the following objectives:

  • To carry on the business of providing integrated electronic financial payment to AB and other member Banks;
  • To do Transaction Processing solutions in Bangladesh, including coordination and deployment of independent branded automated teller machines (ATM);
  • To facilitate Electronic Fund Transfer through Points of Sale (EFT POS) and provide pre-paid Card, Debit Card and Credit Card processing services etc.
  • To facilitate E-commerce facility to AB and other member Banks.
CBL’s vision is to become the largest shared ATM & POS network in Bangladesh. Currently CBL is providing Electronic Fund Transfer services through ATMs and POS throughout the country to the following member Banks:

Credit Risk Management (CRM)

Credit risk of the Bank is governed by the CRM Division following Credit Policy Manual and other guidelines of Bangladesh Bank issued from time to time. Bank has identified credit portfolio into Corporate, Retail-Consumer Credit and Cards and SME in the overall. There are separate policies for each such sectors with clearly defined units for exposure and risk management aspects. Bank-wide credit processing matrix is in place which is spread upto the Branch level. Clear segregation of relationship and credit processing streams across the Bank has been ensured to assure credit risk management covering the entire credit cycle. This set-up has also ensured sound practices in credit processing / appraisal, credit approval, credit documentation, credit disbursement, credit administration, monitoring and control.

Credit Administration Management (CAM)

Bank has a separate unit called Credit Administration Management (CAM) for Credit Administration and handling of classified loans. Banks entire CRM process is automated and linked to the Bank-wide core system which enhanced the reach of (AM unit further. Side by side with the automation of Trade Finance Module, AB is moving towards an integrated credit management environment.

Finance Division (FD)

Bank's Finance Division is working towards achieving high standards as befitting for a financial institution like AB and is also embedded with compliance framework and policies of the bank as a whole. Finance is about developing and maintaining a service-oriented culture, having a strong capacity for strategic and tactical analysis, monitoring internal and outward factors, and working within the businesses to add values. It is performing the key roles of controllership, budgeting, forecasting, financial analysis, business performance monitoring, decision support, procurement' (Payment Cell), and is also providing risk management / assessment framework support platform.

Risk Management Division (RMD)

In 2009 Bangladesh Bank (BB) issued directive to all Banks to establish Risk Management Unit (RMU). Subsequently in September, 2009 Terms of Reference and Organogram of RMU were also prescribed by Bangladesh Bank. Accordingly Risk Management Unit was established in our Bank on October 15, 2009. A Committee on RMU comprising members from all core risk areas was also formed. The RMU Committee holds meeting every month. It analyzes risk parameters and; takes measures for mitigating various risks issues. In February, 2012 Bangladesh Bank issued comprehensive Risk Management Guidelines for Banks. As per directives of Bangladesh Bank, Risk Management Unit has been recently renamed as Risk Management Division with Deputy Managing Director as Chief Risk Officer and Head of Risk Management Division (RMD), which was duly approved by the Board of Directors. RMD is constantly contemplating and exerting efforts for developing a structure and processes to ensure sound risk management in all areas of the Bank. Bank also formed a Supervisory Review Process (SRP) Team in pursuance of relevant guidelines of Bangladesh Bank. The function of SRP Team includes assessment/review of minimum capital requirement (MCR) and maintaining thereof as well as assessment of requirement of adequate capital in consideration of residual risk, evaluation of core risk management, credit concentration risk, interest rate risk, liquidity risk, Operation risk including reputation risk, settlement risk, strategic risk among others.