Introduction

BRAC Bank Limited, a scheduled commercial Bank, commenced its business operation in Dhaka, Bangladesh on 4 July 200 ! "he Bank is mainly o#ned by the largest $%& in Bangladesh ' BRAC! "he Bank has positioned itsel( as a ne# generation Bank #ith a (ocus to meet di)erse (inancial needs o( a gro#ing and de)eloping economy! "he Bank has embarked #ith an ackno#ledged policy to promote broad based participation in the Bangladesh economy through the pro)ision o( high *uality banking ser)ice based on latest in(ormation technology! "he Bank #ill ensure this by increasing access to economic opportunities (or all indi)iduals and businesses in Bangladesh #ith a special (ocus on currently underser)ed enterprises and households across the rural+urban spectrum! "hey belie)e that increasing the ability o( underser)ed indi)iduals and enterprises to build their asset base and access market opportunities #ill increase the economic #ell being (or all Bangladeshis! BRAC Bank Limited, as a scheduled commercial bank established under the Banking Company Act, ,, and incorporated as a public company limited by shares on -ay 20, ,,, under the Companies Act ,,4 in Bangladesh! "he banks has started its operation on 4th o( July 200 #ith a )ision to be the market leader through pro)iding all kinds o( banking ser)ices suitable to the dynamic demands o( both business and indi)idual in the competiti)e market! "hese guidelines #ill help us to achie)e .BRAC/ Bank guest e0perience standards+ Bold ' B11& #ill be B&LD on behal( o( their guests and colleagues! "hey #ill be the (irst to greet, (irst to listen, (irst to make suggestions, (irst to satis(y e)en the une0pressed needs and to bid a (ond (are#ell! Reliable ' B11& #ill take (ull o#nership in ser)ing their guests to their complete satis(action! Appealing ' "hey #ill ensure that all guest touch points are appealing and in)iting! Consistent ' 2t is also necessary to ensure that guest e0perience *uality is consistent in all aspects across all guest ser)ice points all the time!

"he Bank operates under a 3double bottom line4 agenda #here pro(it and social responsibility go hand in hand as it stri)es to#ards a po)erty+(ree, enlightened Bangladesh! A (ully operational Commercial Bank, BRAC Bank (ocuses on pursuing une0plored market niches in the 1mall and -edium 5nterprise Business, #hich until no# has remained largely untapped #ithin the country! "he management o( the Bank belie)es that this sector o( the economy can contribute the most to the rapid generation o( employment in Bangladesh!

Corporate Information
2nauguration o( banking operation 6irst 1-5 unit o((ice 1igning #ith 1hore Cap as in)estor July 4, 2004 January , 2002 December 2,, 2007 1igning #ith 26C as in)estor -ay 8, 2004 6irst A"- installed April 7, 2009 :re(erential share issued January 7 , 200; 1igning #ith in(osys and 7i in(otech changing bank/s 2" August , 200; base 24<= phone banking opening 1eptember ,, 200; Listing #ith C15 January 24, 200= Listing #ith D15 January 28, 200= Commencement o( share trading in D15 > C15 January 7 , 200= Credit Card launching 6ebruary ;, 200= 2ntroduced :robasi Banking April 4, 200= Launching o( "ra)el Rated 1er)ice ?"R1@ $o)ember 0 , 200= Launching o( &mnibus #ith 2 member banks $o)ember 20, 200= 1ourceA Annual Report o( BRAC Bank Limited

Corporate Vision
"he )ision o( BRAC Bank is to be a uni*ue organiBation in Bangladesh! 2t #ill be a kno#ledge+based organiBation #here the BRAC Bank pro(essionals #ill learn continuously (rom their customers and colleagues #orld#ide to add )alue! "hey #ill #ork as a team, stretch themsel)es, inno)ate and break barriers to ser)e customers and create customer loyalty through a )alue chain o( responsi)e and pro(essional ser)ice deli)ery!

Continuous impro)ement, problem solution, e0cellence in ser)ice, business prudence, e((iciency and adding )alue #ill be the operati)e #ords o( the organiBation! BRAC Bank #ill ser)e its customers #ith respect and #ill #ork )ery hard to instill a strong customer ser)ice culture throughout the bank! 2t #ill treat its employees #ith dignity and #ill build a company o( highly *uali(ied pro(essionals #ho ha)e integrity and belie)e in the Bank/s )ision and #ho are committed to its success! BRAC Bank #ill be a socially responsible institution that #ill not lend to businesses that ha)e a detrimental impact on the en)ironment and people! "heir corporate )ision is to build a pro(itable and socially responsible (inancial institution (ocused on -arkets and Business #ith gro#th potential, thereby assisting BRAC and stakeholders build a 3Cust, enlightened, healthy, democratic and po)erty (ree Bangladesh 8!

Corporate Mission
Corporate mission o( BRAC bank is as (ollo#s,

1ustained gro#th in .small > -edium 5nterprise/ sector Continuous lo# cost deposit gro#th #ith controlled gro#th in Retained Assets Corporate Assets to be (unded through sel(+liability mobiliBation %ro#th in Assets through 1yndications and in)estment in (aster gro#ing sectors Continuous endea)or to increase (ee based income Deep Debt Charges at 2E to maintain a steady pro(itable gro#th Achie)e e((icient synergies bet#een the bank/s Branches, 1-5 Fnit &((ices and BRAC (ield o((ices (or deli)ery o( Remittance and Bank/s other products -anage )arious lines o( business in a (ully controlled en)ironment #ith no compromise on ser)ice *uality Deep a di)erse, (ar (lung team (ully moti)ated and dri)en to#ards materialiBing the bank/s )ision into reality!

Corporate Values
Corporate mission o( BRAC bank is as (ollo#s,
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Galue the (act that BRAC Bank are a member o( the BRAC (amily Creating an honest, open and enabling en)ironment Ha)e a strong customer (ocus and build relationships based on integrity, superior ser)ice and mutual bene(it 1tri)e (or pro(it > sound gro#th Iork as a team to ser)e the best interest o( the o#ners Relentless in pursuit o( business inno)ation and impro)ement Galue and respect people and make decisions based on merit Base recognition and re#ard on per(ormance Responsible, trust#orthy and la#+abiding in all that BRAC Bank does do

Goal
BRAC Bank #ill be the absolute market leader in the number o( loans gi)en to small and medium siBed enterprises through out Bangladesh! 2t #ill be a #orld+class organiBation in terms o( ser)ice *uality and establishing relationships that help its customers to de)elop and gro# success(ully! 2t #ill be the Bank o( choice both (or its employees and its customers, the model bank in this part o( the #orld! BRAC Bank belie)es that the pursuit o( pro(it and de)elopment goals are mutually rein(orcing and thus it #ill increase the ability o( under+ser)ed indi)iduals and enterprises to build their asset base and #ill enable them to access market opportunities! "hus this endea)or #ill increase the economic #ell being (or all Bangladeshis and at the same time #ill contribute to#ards the pro(itability o( the bank! 2ts long term strategy is to go #here the market is!

Objectives of the Bank

"he obCecti)e o( BRAC Bank Limited is speci(ic and targeted to its )ision and to position itsel( in the mindset o( the people as a bank #ith di((erence! "he obCecti)e o( BRAC Bank Limited is as (ollo#sA

Building a strong customer (ocus and relationship based on integrity, superior ser)ice! "o creating an honest, open and enabling en)ironment "o )alue and respect people and make decisions based on merit "o stri)e (or pro(it > sound gro#th
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"o )alue the (act that they are the members o( the BRAC (amily ' committed to the creation o( employment opportunities across Bangladesh! "o #ork as a team to ser)e the best interest o( the o#ners "o relentless in pursuit o( business inno)ation and impro)ement "o base recognition and re#ard on per(ormance "o responsible, trust#orthy and la#+abiding in all that they do "o mobiliBe the sa)ings and channeling it out as loan or ad)ance as the company appro)e "o establish, maintain, carry on, transact and undertake all kinds o( in)estment and (inancial business including under#riting, managing and distributing the issue o( stocks, debentures, and other securities "o (inance the international trade both in import and e0port "o de)elop the standard o( li)ing o( the limited income group by pro)iding Consumer Credit "o (inance the industry, trade and commerce in both the con)entional #ay and by o((ering customer (riendly credit ser)ice "o encourage the ne# entrepreneurs (or in)estment and thus to de)elop the country/s industry sector and contribute to the economic de)elopment

Slogan
"he slogan o( BRAC Bank is 3Astha &bichol4! "hese t#o #ords are Bengali #ords that denote enormous trust on the organiBation!

ogo
"he logo o( BRAC Bank is )ery indicati)e in con(ormance #ith the goal o( the organiBation! "his logo has a s*uare shape #hich means solid and strong! "he golden color indicated the 31onar Bangla4, the rising line denotes the gro#th o( BRAC Bank, and blue is the beauti(ul sky #here the sun is shining brightly!

Bank!s Culture

BRAC Bank has adopted trust as a corporate )alue #hich is the acronym (or team #ork, respect (or all people, un*uestionable integrity, e0cellence in e)erything BRAC Bank o( 1-5 do, 1ense o( urgency in getting things done and total commitment! All employees are e0pected to conduct themsel)es in accordance #ith the rules, regulation and norms o( the bank!

"ature of the Business

BRAC Bank Ltd! put (or#ard all banking needs (or its customers #hich comprises deposit banking, in)estment, e0port and import (inancing, inland and international remittance (acilities, online banking ser)ices, etc!

Membership

Bangladesh Association o( Banks "he 2nstitute o( Bankers, Bangladesh 2nternational Chamber o( Commerce -etropolitan Chamber o( Commerce and 2ndustry American Chamber o( Commerce in Bangladesh Bangladesh 5mployers/ Association

C#$B #atings
Credit Rating Agency o( Bangladesh ?CRAB@ Limited has retained . $$% / ?:ronounced Double A "#o@ rating in Long "erm and &S'(%! rating in the 1hort "erm o( BRAC Bank Limited in )ie# o( the per(ormance o( the Bank! Commercial Banks rated .$$% / rated in the long term belong to .50tremely 1trong Capacity > Gery High Juality cohort! Banks rated . $$% / ha)e )ery strong capacity to meet their (inancial commitments! .$$% / is Cudged to be o( high *uality and is subCect to )ery lo# credit risk! Commercial Banks rated .S')%/ in the short term are considered to ha)e strong capacity (or timely repayment! Commercial Banks rated in this category are characteriBed #ith commendable position in terms o( li*uidity, internal (und generation, and access to alternati)e sources o( (unds!

Shareholding *osition
Sl+" o /+ %+ 0+ 1+ 2+ 3+ 4+ 5+ 6+ /7+ //+ /%+ "ame "o+ of $mount Shares ,'akaBRAC 7,808,;80 780,8;8,000 -r! 6aBle Hasan Abed 20 2,000 -r! 1yed Humayun Dabir 20 2,000 -r! A! 1! -ahmud 20 2,000 -r! 6aru* A! Cho#dhury 20 2,000 -r! Dr! 1alehuddin Ahmed 20 2,000 -r! -d! Aminul Alam 20 2,000 1hore Cap 2nternational Ltd! ,090,840 09,084,000 2nternational 6inance , 7,,=;0 7,,=;,000 Corporation -utual 6und 28,,,80 28,,,8,000 $on+resident Bangladeshi 9;,889 9,;88,900 2nstitutions > %eneral :ublic 9,;97, 79 9;9,7 7,900 Grand 'otal /%,777,777 /,%77,777,77 7 . of Share 7 !=4 0!00 0!00 0!00 0!00 0!00 0!00 8!=9 ,!90 2!42 0!4= 4=! /77+77

8ifferent 8epartments of B#$C Bank td

! Human Resources Department 2! 6inancial Administration Department 7! Asset &perations Department 4! Credit Di)ision 9! 1-5 Di)ision ;! 2nternal Control > Compliance Department =! -arketing > :roduct De)elopment 8! 2mpaired Asset -anagement ,! Remittance &peration Department 0! "reasury 6ront ! "reasury Back 2! %eneral 2n(rastructure 1er)ice 7! 2n(ormation "echnology Department

4! Customer 1er)ice Deli)ery 9! Cards Di)ision ;! Call Center =! Cash -anagement 8! 1ecured Remittance department ,! Iomen 5ntrepreneur Cell 20! :ayment 1er)ice

Monetar9 : ;inancial #esources

Like any other (inancial intermediaries, BRAC Bank Limited is no e0ception in per(orming its core (unction

Mobili<ation of fund
"he main sources o( (und (or the Bank areA /! Deposit, and %! Borro#ing /+ 8eposit Deposit is the mainstay o( the BankKs sources o( (unds! 6ollo#ing usual practices, it collects deposit throughA Current Deposit 1a)ings Deposit "erm Deposit %+ Borro=ing Apart (rom deposit, BRAC Bank Limited recei)ed (unds (romA Bangladesh Bank Asian De)elopment Bank ?ADB@ D6I ?kreditanstalt (ur Iieder+au(bau Credit 2nstitution (or Reconstruction@, a %erman de)elopment bank! All o( these (unding sources are (or relati)ely longer period! Recei)ing the credit lines (rom ADB and D(I has been a recogniBing o( the BankKs highly satis(actory per(ormance!

;unction>
"he Bank &((ersA a! "erm loans to industries especially to small+scale enterprises!
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b! 6ull+(ledged commercial banking ser)ice including collection o( deposit, short+term trade (inance, #orking capital (inance in processing and manu(acturing units and (inancing and (acilitating international trade! c! "echnical support to 1mall 1cale 2ndustries ?11ls@ in order to enable them to run their enterprises success(ully! d! -icro credit to the urban poor through linkage #ith $on+ %o)ernment &rganiBations ?$%&s@ #ith a )ie# to (acilitating their access to the (ormal (inancial market (or the mobiliBation o( resources! 2n order to per(orm the abo)e tasks, BA12C Bank #orks closely #ith its clients, the regulatory authorities, the shareholders ?%&B@, banks and other (inancial institutions!

Credit *olic9 of BB
2n order to minimiBe credit risk, BBL has (ormulated a comprehensi)e credit policy according to Bangladesh Bank Core Risk -anagement guidelines! Credit policy o( the Bank pro)ided (or the separation o( the credit appro)al (unction (rom business, marketing and loan administration (unction! Credit policy o( BBL recommended through credit assessment and risk grading o( all clients at the time o( appro)al and port(olio re)ie#! Credit policy also pro)ides the guidelines o( re*uired in(ormation (or credit assessment, marketing strategy, appro)al process, loan monitoring, early alert process, credit reco)ery, $:L account monitoring, $:L pro)isioning and #rite o(( policy, etc! "he board o( directors re)ie#s the credit policy o( the bank annually! Credit #isk Management Credit risk is the risk to an institution/s earnings and capital #hen an obligator or customer (ails to meet the terms o( any contract or other#ise (ails to per(orm as agreed! 2t is one o( the maCor risks (aced by the bank! Considering the key elements o( Credit risk, the bank has segregated duties o( the o((icers Le0ecuti)es in)ol)ed in credit related acti)ities! 1eparate di)ision (or Corporate, 1-5 and Retail has been (ormed #hich are entrusted #ith the duties o( maintaining e((ecti)e relationship #ith the customer, marketing o( credit products, e0ploring ne# business opportunities etc! 6or transparency in the operations during the entire credit period i! Credit Appro)al Committee, ii! Loan Administration Department, iii! Reco)ery Fnit and i)! 2mpaired Asset -anagement has been set up!

2n addition to the abo)e 1ales "eams o( the abo)e+mentioned business units book the customersM the Credit Di)ision does through assessment be(ore appro)ing the credit (acility! "he risk assessment included borro#er risk analysis, (inancial analysis, industry analysis, and historical per(ormance o( the customer! Loan Administration Department ensures compliance #ith all legal (ormalities, completion o( all documentation security o( the proposed credit (acility and (inally disburses the amount! "he 1ales team reports to the D-D through their lineM the Credit di)ision reports to -anaging Director, #hile the Loan Administration reports to the Chie( &perating &((icer! "he abo)e arrangement has not only ensured segregation o( duties and accountability but also helps minimiBe the risk o( compromise #ith *uality o( the credit port(olio! During the year 20 0, credit risk management has taken (e# initiati)es to achie)e better *uality port(olio, "o support 1-5 credit, CR- has started to establish Regional Credit Risk -anagement centers national #ide to maintaining *uality, through #hich the bank can co)er ;0E o( the business in terms o( )eri(ication, assessment and appro)al o( 1-5 loans! A ne# #ing called 31pecial Asset -anagement ?1A-@ and Credit 2nspection+ Iholesale Banking and -edium 5nterprise4 has been included in the (leet o( credit risk management! "o enrich the collection and monitoring, CR- has introduced so(t#are called Collection and Reco)ery -anagement Application ?CAR-A@! A ne# 1-5 collection team under CR- has been launched to look a(ter all 1-5 port(olios o( Dhaka and Chittagong metropolitan area!

Business 8ivisions of B#$C Bank td

2t has (our maCor business di)isionsA ! Corporate Banking Di)ision 2! Retail Banking Di)ision 7! 1mall > -edium 5nterprise Di)ision 4! 6oreign "rade and "reasury Di)ision

8ivisions and Services of B#$C Bank imited

! Corporate Banking 8ivision Being a maCor business unit o( the bank, corporate banking di)ision has been playing a signi(icant role to achie)e the o)erall obCecti)e o( the bank! 1ince the starting, the di)ision is continuously stri)ing to pro)ide more customer (ocused products (or its
0

)alued clients! 2n this process, the di)ision has segmented itsel( into )arious units #hich cater the associated customer segment! "he year 20 0 #ill be marked as a milestone (or the corporate banking di)ision as it has (inance se)eral large proCects in this year! Corporate banking helps its customers to (ul(ill their obCecti)es by care(ully listening and analyBing their ideas, pro)iding necessary e0pertise and composite products! "he business unit operates through the (ollo#ing (i)e maCor #ingsA

1tructured 6inance Local Corporate Fnit -edium 5nterprise Fnit Cash -anagement and Corporate Liabilities

Last year corporate banking enCoyed outstanding gro#th o( ;=E in ad)ances #hile cah management registered E gro#th in deposits due to primary (ocus on mobiliBing CA1A? current and sa)ings account@ and operating accounts as opposed to term deposits! Corporate Banking Services Corporate Loan :roducts &)erdra(t "erm Loan Lease 6inance Loan against "rust Receipt ?LA"R@ Iork &rder 6inance

 -edium 5nterprise "rade 6inance Letter o( Credit ?LC@L Letter o( %uarantee ?L%@

%+ #etail Banking 8ivision Retail Banking Fnit ha (urther strengthened its position as a maCor channel o( business by stretching its horiBon #ith its uni*ue o((er o( personal banking across the country! "his unit takes (oremost (unding responsibility o( the bank and is committed to o((er multi(arious ser)ices to entire customer base o( the bank through branches, alternati)e deli)ery channels, premier banking ser)ices, and literally taking retail banking products to doorsteps through direct sales (orce! A phenomenal gro#th in terms o( ne# customers #as registered by retail team and graphical comparison o( three years is gi)en belo#A #etail Banking Services "he retail, corporate, and (oreign di)ision o( BRAC Bank Ltd! &((ers di((erent types o( ser)ices to its )alues customers #hich are discussed belo#A 8epositor9 Services> BRAC Bank o((ers many types o( deposit products to its customers #hich are as (ollo#sA ;i?ed 8eposit> &pening Re*uirements A Current Account or 1a)ings Account %eneral 6eatures A term deposit #ith a guaranteed monthly return on in)estment Competiti)e interest rates 5arly encashment (le0ibility 1ecured Loan andLor 1ecured &)erdra(t eligibility Interest ;irst ;i?ed 8eposit Here depositors don/t ha)e to #ait till maturity to recei)e interest on (i0ed Deposit! BRAC Bank 2nterest 6irst 6i0ed Deposit lets the depositor dra# the interest instantly at

the time o( deposit! "his is a deposit scheme #here the client recei)es interest in ad)ance!

6eatures

2nstant interest on (i0ed Deposit 2nterest rein)estment opportunity Attracti)e rate o( return Loan (acility against the 266D

$biram $ccount BRAC Bank .Abiram/ Account is a special type o( 6i0ed Deposit scheme, #hich o((ers the (le0ibility > com(ort o( ha)ing a guaranteed monthly return on in)estment! 6eatures

-onthly interest on deposit Attracti)e rate o( return ,9E loan against deposit

@Aee $ccount 2n 5Nee Account BRAC Bank o((ers a non+che*ue interest bearing account (or small sa)ers #ho are in (re*uent need o( transaction! Depositors get an A"- card to operate account round the clock! 6eatures

24 hour access to A"-s and :&1 2nterest on daily balance $o minimum balance $o ledger (ees

8*S BRAC Bank/s Deposit :remium 1cheme ?D:1@ is a sa)ings plan that adds )alue to hard earned money! 6eatures -onthly installments can be as lo# as "k! 900 or any multiples o( it Choose any day as installment date

Recei)e a 1a)ings aLc #ith a personaliBed che*ue book &n+line banking (acilities Maturit9 amount after completion of all regular installments pa9mentB 4 Oears = Oears Oears 4 Oears 28,;;=!00 98,;90!00 ;,;07!00 =,,990!00 9=,774!00 =,700!0 277,20=!00 79,, 0 !00 0

Monthl9 Installment $mount ,B8'+900!00 000!00 Savings $ccount

A regular sa)ings account o((ers interests on deposit amount! 6eatures

Cash #ithdra#al and deposit o( 9 lac and abo)e need clari(ication $o (or(eiture rules or hidden costs $o re*uirement (or notices to be gi)en be(ore making a #ithdra#al Fse the net#ork o( A"-s (or easy cash #ithdra#al %et mini balance statements (rom the A"- #hene)er needed 2nterest rate o( 9!9E on a)erage monthly balance

Short(term 8eposit "his is a deposit scheme to gi)e returns on sa)ings! 6eatures

-inimum balance re*uired is "k! 00,000 2nterest paid t#ice a year but calculated monthly i( balance is P "k! 00,000 1ecured returns!

Current $ccount
4

BRAC Bank/s Current Account is a normal checking account, gi)es the option to deposit and #ithdra# money (or day+to+day needs! 6eatures

A"- card (or easy cash #ithdra#al Iithdra# money (rom all A"-1 Deposit che*ues at any o( the branches and get the (und immediately Fse online banking (acility (or (ree 5asy access to other (acilities

Salar9 $ccount BRAC Bank 1alary Account is a payroll account (or 5mployers and 5mployees! As an organiBation, anyone can opt (or the 1alary Account to enable easy disbursements o( salary > bene(its!

5ligibility "he organiBation needs to ha)e a minimum o( 0 employees and a payout o( "k! per month and an a)erage salary per employee o( "k! 0,000 per month! 6eatures

lac

Nero balance $on+checking account A"- debit card 1a)ings 2nterest

0+ Small : Medium @nterprise 8ivision "he 1-5 program o( BRAC is a )enture o( BRAC Bank! BRAC bank #as set up #ith the gro#ing need (or capital mobiliBation and the need (or (ormal contracts (or a #ider spectrum o( clients o( the country! Ihen it came to 1-5 (inancing, instead o( approaching the problem by scaling do#n its regular operations, a separate program designed specially (or 1-5 (inancing #as launched by BRAC Bank in 2002! BRAC
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Bank/s e((ort is noted in this regard (or its complete (ocus on the credit needs o( the small and medium enterprises! 1ince the initiation o( 1-5 operations by BRAC Bank, it has become the Bank/s largest and most pro(itable )enture! As o( December 2004, the 1-5 di)ision accounted (or t#o third o( the Bank/s pro(its! BRAC has ser)ed 720000 entrepreneurs #ith 1-5 loans )alued at BD" 44770 millions through its 424 1-5 unit o((ices! BD" 7=400 million assets disbursement #as supplemented by BD" 8,=0million deposits! "he uni*ue (eature o( BRAC Bank is that it is the only bank that approaches prospecti)e clients, #hile other banks #ait (or them to apply (or loans #hen re*uired! 1-5 units o( BRAC Bank are located in all districts o( the country! 5ach unit has t#o to (i)e Customer Relations &((icers ?CR&s@! "he role o( CR&s is instrumental in not only selecting and approaching clients, but also in maintaining regular interaction #ith each client, monitoring the use o( the loan and ensuring regular repayment!

1+ ;oreign 'rade and 'reasur9 8ivision BRAC Bank/s 6oreign "rade and "reasury Di)ision are #ell e*uipped #ith modern telecommunication in(rastructure (acilities likeA 1I26", Reuters, Bloomberg, 2nternet, Goice Recorder, etc! "reasury manages the Bank/s li*uidity and its associated risk! 2t also manages (oreign e0change transaction related risk e0posure in a pro(itable manner!

BRAC bank recei)ed appro0imately ;E o( total in#ard remittance to Bangladesh in the year 20 0!
;

 "he bank secured 4th position among all the pri)ate commercial banks and = th among all the banks in Bangladesh in terms o( bringing in#ard remittance #ith the )olume o( 99= -illion and o)er !9 million transactions! Accrued =9Q E shares o( 1aaCanan Iorld#ide -oney "rans(er Ltd in Fnited Dingdom!

;inancial #evie=
During the (inancial year 20 0, the banking industry (aced (ar greater challenges! BRAC bank has been #ell ahead o( maCority o( the bank! 2t has remarkable per(ormance in e)ery aspect o( banking acti)ities such as creating (irm deposits, ad)ance and pro(it gro#th!

Cear %7/7 %776 %775 %774 %773 %772 %771 %770 %77%

@arning per share ;8! = ;4!7= ; !4; 94!,9 ;7!7 78!94 27! ; 2!0, + 9! 9

"et $sset Value *er Share 74,!7= 78 !;2 747!28 29;!99 2 ;!=2 9;!98 8!04 ,=!=9 84!29

"et *rofit $fter 'a? ,mn829!02 729!99 ,=7!49 ; 8!74 774!70 ,2!;8 ,,!70 70!28 +7=!8;

*rice @arning #atio 9!0= 7!88 =!92 2,!77 8!40

8ividend 0!00, 20EB 70EB 70EB 0EB, RA9 20EB nLa nLa nLa nLa

;inancial *erformance
=

BRAC bank had passed another success(ul year despite the unrecepti)e market condition! "he bank had operating pro(it o( BD" 4,;, million #hich is 74E more than pre)ious year!

Operating #esult BRAC had net pro(it a(ter ta0 in 20 0 #as BD" ;;4 million+ an increase o( 28E o)er last year! Return on e*uity #as 8!,9E and 5:1 #as BD" ;0!7,!

2nterest income o( the bank has increased by 4E in 20 0 and is consistent #ith the increase o( loans and ad)ances gro#th by 7 E! 2nteresting e0pense has decreased by 9E in 20 0, as liabilities #ere reprised at lo#er rates and the deposit mi0 title to#ards lo# cost (unds!

$et interest income in 20 0 #as BD" 90,4 million #hich increased by BD" ;; million (rom last year!

$on (unded income gre# this year by 4E! "he bank success(ully increased its non (unded income and reduced its burden ratio o)er this year! &n the other hand operating e0pense is increased this year by 2,E and this impact by sta(( salary and allo#ances increased by 2;E to support increasing business )olume and ser)ices! $umber o( stu(( #as increased by 2 E o)er last year #hereas the (und under management ?6F-@ has increased by 24E!

"otal asset o( the bank rose to BD" , 90 million in 20 0 (rom BD" ,9 2= million in 200,! "he (igure sho#s a signi(icant increase in total assets documented in loans and ad)ances, in)estments, (i0ed assets maintains by bank! "otal asset situation o( the bank in last (e# years is gi)en belo# Oear 200; 200= 2008 200, 20 0 "otal Asset 70,0 2 4;,787 =2442 ,9 2= , 90 E Change ==!84E 94!99E 9;! 8E 7 !7 E 29!29E

Loans and ad)ances increased by BD" 20 92 million or 7 E in 20 0! "his is result o( continued gro#th in the lending business and (ocus on customer pro(itable gro#th!

20

1-5 sector the main concentration area o( the bank, comprises 90E o( total loans and ad)ances! "he maCor port(olio o( BRAC bank belongs to the commercial sector! "he banks in)estments in 20 0 #as mostly in go)ernment securities, #hich stood at BD" ,;;8 million as on December 7 st 20 0 as against BD" 0298 million at the end o( the pre)ious year! "o com(ortably maintain CRR, 1LR and use the surplus (und in the cost e((ecti)e #ay! &ut o( total in)estment =9E concentrated in go)ernment securities!

Customer deposits o( the bank gre# by =E in 20 0! "he bank ended the year #ith total customer deposits o( BD" 88 98 million compared to =9220 million in the year 200,! Almost 7,E o( the total deposits are in the (orm o( (i0ed deposits #hereas only 8E and 27E are in the (orm o( current and sa)ings deposits!

Shareholders eDuit9

"he shareholders e*uity has increased by 9E o)er the pre)ious year! :aid up capital o( the bank has been raised (rom BD" 209, million to BD" 2;== million, trough
2

issuance o( bonus share out o( retained earning (rom 200,! "his year the banks consolidated e*uity is BD" 099 million and banks e*uity is BD" ,4 2 million!

Shareholding *osition "he shareholding position o( the bank as on December 7 , 20 0 is as (ollo#s

"he shareholding o( BRAC has increased to 44E due to release o( shares by 1horeCap 2nternational Ltd! 1hareholding by the institution and general public has also increased up to le)el o( 4;E! Sources and Etili<ation of ;unds

"he main source o( (und is customer deposits, #hich is composed o( =4E o( total (unds! "he banks maCor (unds are utiliBed in loans, ad)ances and in)estments, comprising around = E and E respecti)ely o( total (unds a)ailable to the bank!
22

#O$ and #O@ Return on assets ?R&A@ this year stood at !99E, recording a slight (rom 200, ? !9;E@! Return on e*uity ?R&5@ stood at 8!,9E, against ,! ,E in the year 200,! Cost to Income #atio 2n the year 20 0, Cost to 2ncome Ratio has decreased (rom 48!82E to 4=!,2E due to a greater income gro#th than that o( the cost! Maintaining Capital $deDuac9 Capital Ade*uacy ratio is the measure o( the (inancial strength and sustainability o( the bank! CAR determines the capacity in terms o( meeting the time liabilities and other risk such as credit risk, market risk etc! banks capital is the cushion (or the potential (uture loses that protects the banks deposits and other lenders! 2n this regard the Bangladesh Bank uses CAR as the mechanism to protect depositors and con(idence o( the banking system! "he bank maintained ade*uate capital o( 2!0=E compared to the current regulatory re*uirement o( 0!00E! 2n 20 0, the bank core capital and total capital base #ere=!47E and 2!0=E respecti)ely

Capital Ade*uacy Ratio and "otal Capital in last (i)e yearsA Capital composition Capital(CoreB Capital( Supplementar9B 'otal Capital Capital $deDuac9 #atio %773 ,;= 92, 24,; 7!97 %774 29=2 220 7=2, 2!28 ; %775 48 , 2,8 = 2!=; %776 ;0=4 22 ; 82,0 2!49 %7/7 =7,2 4; , 20 2!0=

* Capital Core: includes paid up capital, share premium account, statutory reserve and retained earnings.

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* Capital Supplementary: includes general provisions (on unclassified loans), preference shares, and exchange equali ation fund. @conomic Value $ddition ,@V$5conomic Galue Addition is the measure to calculate the economic )alue added by the enterprise to the shareholders! 2n computing economic )alue addition, economic pro(it and contribution to the go)ernment e0che*uer is considered!

Market Value $dded ,MV$-arket Galue Added is the di((erence bet#een the current market )alue o( a company and the capital contributed by the in)estors! Higher -GA is better (or the organiBation! 2t indicates that the company created substantial #el(are (or the shareholders! "he negati)e -GA means the )alue o( the management action and in)estments are less than the )alue o( capital contributed to the company by the capital market!

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@conomic *rofit 5conomic pro(it is a residual measurement #hich subtracts the cost o( capital (rom the net operating pro(it a(ter ta0 generated in the business! "he bank internal per(ormance measures include economic pro(it, a calculation #hich compares the return on the (inancial capital in)ested in the bank by its immediate sponsors! "he bank prices its cost o( capital internally and the di((erence bet#een that cost and post cost pro(it attribute to the ordinary shareholders represents the amount o( economic pro(it generated! 5conomic pro(it is used by the management as one o( the measures to decide #here to allocate resources so that it can be more producti)e!

2n 5GA terms, the bank created BD" ;09 million in 20 0, #ith a gro#th o( 2E! Geographical ocation(=ise Segment Information "he bank initiated to re)ie# 3%eographical Location+#ise 1egment Reporting4! Reported business segments #ithin the geographical territory o( Bangladesh are sho#n bello#, Dhaka Di)ision 1ylhet Di)ision
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 RaCshahi Di)ision Chittagong Di)ision Dhulna Di)ision Barishal Di)ision Rangpur Di)ision During the year the bank made net operating pro(it o( BD" 4,;,million! "he segment distribution o( net operating pro(it is sho#n in (ollo#ing graph,

Loans and ad)ance position o( the bank #as increased (rom BD" ;4 9 million ?200,@ to BDR 84707 million ?20 0@! "he segment position o( loans and ad)ances 20 0 is sho#n bello#A

2;

#etirement Benefit to the @mplo9ees *rovident ;und :ro)ident (und bene(its are gi)en to the sta(( o( the bank in accordance #ith the registered :ro)ident (und rules! "he commissioner o( 2ncome "a0, Large "a0 :ayers Fnit, Dhaka has appro)ed the :ro)ident 6und as a recogniBed pro)ident (und #ithin the meaning o( section 2?92@ read #ith the pro)isions o( part + B o( the 6irst 1chedule o( 2ncome "a0 &rdinance ,84! "he recognition took e((ect (rom st January 2007! "he (und is operated by a Board o( "rustees consisting o( ?ele)en@ members o( the bank! All con(irmed employees o( the bank are contributing 0E o( their basic salary as subscription to the (und! "he bank also contributes e*ual amount o( the employeesK contribution to the (und! 2nterest earned (rom the in)estments is credited to the membersK account on hal( yearly basis! -embers are eligible to get both the contribution a(ter 07 years continuous ser)ice (rom the date o( their membership! Gratuit9 %ratuity (und bene(its are gi)en to the sta(( o( the bank in accordance #ith the appro)ed %ratuity (und rules! "he (und is operated by a Board o( "rustees consisting o( ; ?si0@ members o( the bank! 5mployees are entitled to gratuity bene(it a(ter completion o( minimum (i)e years o( ser)ice in the Company! "he gratuity is calculated on the basis o( last basic pay and is payable at the rate o( one monthKs basic pay (or e)ery completed year o( ser)ice! Ie ha)e applied (or recognition o( the (und and the appro)al procedure is under process!

#evenue #ecognition
Interest Income 2n terms o( pro)ision o( Bangladesh Accounting 1tandard ?BA1 + 8@ on re)enue and disclosures in the (inancial statements o( the Bank, the interest recei)able is recogniBed on accrual basis! 2nterest in loans and ad)ances ceases to be taken into income #hen such ad)ances are classi(ied, kept in interest suspense account! 2nterest on classi(ied ad)ances is accounted (or on a receipt basis! ;ees : Commission Income 6ees > commission income arises on ser)ices pro)ided by the Bank recogniBed on a cash basis! Commission charged to customers on letters o( credit and letter o( guarantee are credited to income at the time o( e((ecting the transactions! 8ividend income on Shares Di)idend income (rom shares is recogniBed #hen that right to recei)e the payment is established!

Interest *aid and other e?penses

2=

2n terms o( pro)ision o( the Bangladesh Accounting 1tandard ?BA1 + @ :resentation o( 6inancial 1tatements, the interest paid and other e0penses are recogniBed on accrual basis!

SFO' $nal9sis
Strengths

BRAC bank has already gained a positi)e image in the mind o( the customers! And its strong corporate image helped it to gain the trust to the depositors! BRAC Bank has probably the best customer care ser)ice among the domestic competitors operating in Bangladesh! 2t has a )ery good combination o( shareholders #ho are )ery a((luent and has signi(icant importance in the society! BRAC Bank has an e((icient management team #ho are heartily #orking (or the achie)ement o( the ultimate obCecti)e o( this bank! 2t has an e((icient Human Resource #ho are e((icient #ho are #ell trained and moti)ated thus they can manage their assigned acti)ities and responsibility! 6rom the technological perspecti)e BRAC Bank is one o( the leading institutions to adopt ne# inno)ations *uicker than others! BRAC Bank has already established its branches in many places all o)er the country! 2t has a (riendly #ork en)ironment #here the employees can gi)e their (ull e((ort #ith moti)ation #hich e)entually results in an !e((icient team e((ort! "he management system is decentraliBed and BRAC Bank intends to reduce the bureaucracy (rom its system! BRAC Bank can maintain a (a)orable e)en high pro(it margin! BRAC Bank is (inancially )ery sound organiBation!

Feaknesses

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Although 1-5 loan is a )ery signi(icant castor o( BRAC Bank but people are less noti(ied about the (act and they are not much (amiliar #ith all the 1-5 packages that this bank o((ers! "hey do not (ocus the retail banking and corporate banking sector as like as 1-5 sector thus its retail and corporate banking is getting less emphasis! Although the A"- posts o( BRAC Bank is increasing day by day but still some o( its competitors are ha)ing much more A"- booths #hich someho# hamper its image! Although its pro(itability is getting higher but its operating cost per employee is increasing!

Opportunities

"he market (or commercial banks is #idening day by day! Because people/s trust o)er the pri)ate banks is getting stronger! "here are many technological de)elopments happening around the #orld and i( they can adopt those technologies be(ore its competitors it can enCoy the bene(it o)er the time! 1till there is a good prospect and #idening market (or 1-5 loan #hich #ill pro)ide BRAC Bank a ne# arena!

'hreats

"he upcoming political situation i( turns into a unstable economic condition that can be considered as a maCor threat as a hinder (or normal operation! Competiti)e ri)alry among the local banks is increasing day by day! "hus this threat (or this bank to sur)i)e in its current position! "hreat o( ne# entrants is also a considerable (actor! As an emerging sector ne# companies may come up #ith their distincti)e competencies and can make obstacles (or BRAC Bank to gro#!

*roblems

"here are insu((icient ser)ice stations (or #ithdra#ing and depositing money in the branch o((ices and (or that reason o(ten long *ueues are made thus increase the #aiting time (or the customers and e)entually results in customer dissatis(action!
2,

All the money a)ailable in the bank are not al#ays #ell utiliBed sometimes they remain as idle money! A serious problem is occurring (or the last (e# months that the A"- booths o(ten becomes unusable mostly because o( problems in A"- machines &(ten this is (ound that there is no money in the A"- machines but customers are #aiting (or #ithdra#ing money! "hey signi(y on their internet banking system but this has lots o( problems and thus this is not con)enient (or the customers to use! 5mployees in BRAC Bank get lo#er salary (or #hich they sometimes lose the moti)ation! 50cept (e# branch o((ices most o( the branch o((ices ha)e insu((icient space! Although the number o( BRAC Bank booth is increasing but that is not ade*uate in comparison o( its maCor competitors! "he in(ormation gi)en about the Bank/s (eatures and many other things in the #ebsite is backdated!

#ecommendations

2n the branches o( BBL there should be more number o( ser)ice stations (or #ithdra#ing and depositing money so that it reduces the customer #aiting time! "here should be more e((icient capital management and in)estment analysts appointed so that idle money does not remain in the bank! "hey should (re*uently keep their conscious obser)ation to monitor that the A"machines in all the booths are usable and ade*uate cash is there! "hey should increase their A"- booths substantially in order to compete #ith its competitors! "hey should update the in(ormation in the #ebsite in a regular basis! BBL should increase the space in the branch o((ices as their client siBe is increasing day by day and also introduce ne# branches in )arious places o( the country (or e0pansion! "he managers should be sent to di((erent training programs on a regular basis to impro)e their kno#ledge base #hich #ould help them to impro)e their e((iciency! 5mployees o( BRAC Bank should be pro)ided a better salary package in order to keep them other#ise they may s#itch to another Cob (or higher salary!
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-anagement should be more decentraliBed to pro)ide (aster ser)ices to the clients! 2n order to remain as the market leading company they should emphasiBe much on retain the e0isting customer base and also should try to attract ne# customers! 2n the loan appro)al procedure the e)aluation o( credit#orthiness o( the clients should be more authoritarian in order to reduce the chance o( de(aulter! 1-5 loan o( BRAC Bank has already gained popularity to the business people but there is an obCection about the interest rate #here the bank should be more a#are and also try to decrease the interest rate! Because o( higher rate o( interest de(aulter rate may increase #hich #ould ultimately a((ect the pro(itability o( the bank!

Conclusion
BRAC Bank Limited has gained a positi)e image in the mind o( the people in Bangladesh and this is re(lected in the gro#th and per(ormance o( the bank in the last (e# years! BRAC Bank/s steady rise to the top as the (astest gro#ing bank in the country intends to lead the bank to#ards the achie)ement o( its ultimate obCecti)es and goals in compliance #ith its )ision!! "his bank has a strong (inancial base and huge assets to meet up its liabilities #hich makes this organiBation (inancially sound and sol)ent! "he management o( this bank is out(itted #ith e0pert and e((icient bankers and managers #ho delicately ser)e the bank! "hey #ork (or the betterment o( the bank as a team! According to my study the per(ormance o( this bank is noticeable! 2n this study to e)aluate the (inancial per(ormance o( this bank )arious (inancial parameters #ere considered and BRAC Bank #as (ound as a (ast gro#ing bank and simultaneously per(orming #ell in almost all the areas! "o keep #ith this pace o( gro#th and impro)ement they no# should more )igilant on #hat their customers #ant and should be more )igilant #hile gi)ing loans to the clients in order to reduce the de(aulter rate!

#eferences !e"sites #. http:$$siteresources.%orld"an&.org$'()*+,S'C$-esources$loc.chap/.pdf

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/. http:$$en.%i&ipedia.org$%i&i$0an&ing 1. http:$$%%%.photius.com$countries$"angladesh$economy 2. http:$$en.%i&ipedia.org$%i&i$3ist.of.0an&s.in.0angladesh 4. http:$$en.%i&ipedia.org$%i&i$0angladesh.0an& 5. http:$$%%%.0-6C"an&.com$php$include.su"menu.php7pg8# 9. http:$$%%%.termpapersla".com$term:papers$##9991.html ;. http:$$%%%.0-6C"an&.com$php$include.gen.php7pg89 <. http:$$%%%.federalreserve.gov$pu"s$feds$#<<;$#<<;1/$#<<;1/pap.pdf )ext 0-6C 0an& 3imited, 6nnual -eport /==;:/=#=

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