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Rationale of the Cover

Prime Bank has journeyed


far and long on the eventful
paths in the last two
decades.
It has achieved much and
has firm resolve to achieve
more.
Currently, it stands tall &
strong and portrays everreadiness to march on.

Annual Report 2014

Table of
contents

01

04

Letter of Transmittal
03
Notice of the 20th Annual General Meeting
04
Standard Disclosure Index
05
Corporate Governance Disclosure Checklist
08
Vision 10
Mission 11
Corporate Philosophy
12
Strategic Priority
13
Ethics, Integrity and Trust
14
Green Banking
14
Statement Regarding Forward Looking Approach
15
Corporate Profile
16
Milestones 18
Board of Directors Profile
20

Stakeholders Information
(a) Distribution of Shareholdings in 2014
(b) Shares held by Directors in 2014
(c) Redressal of Investors Complaint
Financial Highlights-Group & PBL
Financial Highlights - PBL
Graphical Presentation - PBL
Stock Performance - Market Price Information
Segment Analysis
Horizontal/Vertical Analysis-Key Financial Data
& Key Ratios - PBL
Statement of Value Added and its Distribution
Economic Value Added Statement
Economic Impact Report
Maintaining Capital Adequacy
Maintaining Liquidity
Payment of Dividends
Disclosure for Non Performing Assets
Financial Calendar 2014
Glimpses of 19th AGM

About Prime Bank

Stakeholders Information

02

Corporate Governance
Composition of Board and Committees
From the office of the Chairman
Managing Director & CEOs Roundup
Directors Report
Report on the Activities of the Audit Committee
Report of Prime Bank Shariah Supervisory Committee
CEO/CFOs Declaration to the Board
Corporate Governance Report
Green Banking Report
Corporate Management
Corporate Organogram
Group Corporate Structure
Management Discussion & Analysis
Report on Risk Management by Chief Risk Officer
Risk Management Report
Market Discipline Disclosure on Risk Based Capital (Basel-II)

29
30
34
38
47
49
50
52
80
86
99
100
101
138
140
154

03

Other Information
Awards and Recognition
175
Media Highlights
180
Products and Services
182
Sustainability Report 2014 - GRI G4
187
Prime Bank Foundation (Corporate Social Responsibility) 223

258
258
258
259
260
261
262
264
265
266
268
269
269
270
271
272
273
274
275

05

Financial Statements
Independent Auditors Report to the Shareholders
Consolidated Balance Sheet
Consolidated Profit and Loss Account
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Balance Sheet of PBL
Profit and Loss Account
Cash Flow Statement
Statement of Changed in Equity
Notes to the Financial Statements
Financial Statements - OBU
Financial Statements - PBIL
Financial Statements - PBSL
Financial Statements - PECL, Singapore
Financial Statements - PBL Exchange (UK) Ltd.
Financial Statements - PBL Finance (Hong Kong) Ltd.
Some PBL Activities during 2014
Branch Network
Glossary

278
280
282
284
286
287
289
291
293
294
391
401
407
413
419
425
430
433
439

Letter of
Transmittal

All Shareholders,
Bangladesh Bank,
Bangladesh Securities and Exchange Commission,
Registrar of Joint Stock Companies & Firms,
Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited

Dear Sir(s),
Annual Report of Prime Bank Limited for the year ended December 31, 2014
Enclosed please find a copy of the Annual Report of Prime Bank Limited along with the Audited Financial Statements at
the position of December 31, 2014. The Report includes Income Statements, Cash Flow Statements along with notes
thereon of Prime Bank Limited, its Subsidiaries namely Prime Exchange Co. Pte. Limited, Singapore, PBL Exchange
(UK) Limited, PBL Finance (Hong Kong) Limited, Prime Bank Investment Limited and Prime Bank Securities Limited.
This is for your kind information and record please.
Best regards.
Yours sincerely,

Mohammed Ehsan Habib


Company Secretary

Annual Report 2014

Notice of the Twentieth


Annual General Meeting

Notice is hereby given to all Members of Prime Bank Limited that the 20th Annual General Meeting of the Company
will be held on Monday, 30 March 2015 at 11:00 a.m. in the KIB Complex, Krishi Khamar Sarak, Farmgate, Dhaka-1215
to transact the following business:
AGENDA
1. To receive, consider and adopt the Directors Report and Audited Financial Statements of the Bank for the year
ended 31st December 2014 together with the Auditors Report thereon.
2. To declare dividend for the year ended 31st December 2014 as recommended by the Board of Directors.
3. To elect/re-elect Directors.
4. To appoint Auditors for the term until the next Annual General Meeting and fixing their remuneration.

By order of the Board of Directors


February 26, 2015


Mohammed Ehsan Habib

Company Secretary
Notes:
a. The Record Date shall be Tuesday, March 10, 2015. Shareholders whose names appear in the Members
Register of the Company and/or in the Depository on the Record Date will be eligible to attend the meeting and
qualify for dividend.
b. The Board of Directors has recommended @ 15% Cash Dividend for the year 2014.
c. A Member eligible to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote on
his/her behalf. Duly stamped Proxy Form must be submitted to Share Department of the Company at least 72
hours before the scheduled Meeting starting at 11.00 a.m. Proxy Form will be available with the Annual Report,
Banks website and at the Share Department of the Bank.
d. Shareholders and proxies are requested to record their entry in the Annual General Meeting well in time.
e. Directors Report and Audited Financial Statements of the Bank for the year ended 31st December 2014 together
with the Auditors Report thereon shall be available on banks website from 16th March 2015 onward.
f.

Honble Members are requested to update the particulars of their Bank Account, change of address and BO
Accounts with 12 Digits Taxpayers Identification Number (e-TIN) through Depository Participants (DP) before the
Record Date. If the Members fail to update their e-TIN before the Record Date Income Tax at source will be
deducted from payable Dividend @15% (fifteen percent) instead of @10% (ten percent) as per amended Income
Tax Ordinance 1984 under Section 54.

N.B: No gift or benefit in cash or kind shall be paid/offered to the Shareholders in the 20th AGM as per BSEC
Directive No. SEC/CMRRCD/2009-193/154 dated 24.10.2013.

Standard
Disclosure Index
PARTICULARS

PAGE NO.

Corporate Objectives, Values & Structure


Vision and Mission
Overall strategic objectives
Core values and code of conduct/ethical principles
Profile of the Company
Directors profiles and their representation on Board of other companies & Organization Chart

10,11
13
14
16-17
20-27, 99-100, 368-370

Management Report/ Commentary and analysis including Directors Report/Chairmans Review/CEOs Review etc.
A general review of the performance of the company
Description of the performance of the various activities / products / segments of the company
and its group companies during the period under review. (Weightage to be given for pictorial /
graphical / tabular presentations used for this purpose)
A brief summary of the Business and other Risks facing the organization and steps taken to
effectively manage such risks
A general review of the future prospects/outlook.
Information on how the company contributed to its responsibilities towards the staff (including
health & safety)
Information on company's contribution to the national exchequer & to the economy

30-37, 101-139
34-46, 80-85, 101-139, 258273
138-173
32-33, 36-37
37, 41, 128-131, 208-211 (GRI)
268-269

Sustainability Reporting
Social Responsibility Initiatives (CSR)
Environment related Initiatives

32, 37, 224-256


37, 80-85, 197-207 (GRI)

Environmental & Social Obligations

187-222 (GRI)

Integrated Reporting

187-222 (GRI)

Appropriateness of Disclosure of Accounting policies and General Disclosure


Disclosure of adequate and properly worded accounting policies relevant to assets, liabilities,
Income and expenditure in line with best reporting standards.

44-45, 294-314

Any Specific accounting policies

295

Impairment of Assets

299

Changes in accounting policies/Changes in accounting estimates

295

Segment Information
Comprehensive segment related information bifurcating Segment revenue, segment results
and segment capital employed
Availability of information regarding different segments and units of the entity as well as non-

101-118, 265, 387

segmental entities/units
Segment analysis of
- Segment Revenue
- Segment Results
- Turnover

101-118, 265, 387

- Operating profit
- Carrying amount of Net Segment assets
Financial Statements (Including Formats)
Disclosures of all contingencies and commitments
Comprehensive related party disclosures
Disclosures of Remuneration & Facilities provided to Directors & CEO

281, 288, 345-347


360-361
44, 66, 69-71, 353-354

Annual Report 2014

PARTICULARS

PAGE NO.

Statement of Financial Position / Balance Sheet and relevant schedules


Income Statement / Profit and Loss Account and relevant schedules
Statement of Changes in Equity / Reserves & Surplus Schedule
Disclosure of Types of Share Capital
Statement of Cash Flow

278-429

Consolidated Financial Statement (CFS)


Extent of compliance with the core IAS/IFRS or equivalent National Standards
Disclosures / Contents of Notes to Accounts
Information about Corporate Governance
Board Of Directors, Chairman And CEO
Audit Committee (Composition, role, meetings, attendance, etc) Internal Control & Risk
Management

20-27, 52-68
29, 52-79

Ethics And Compliance

12, 14, 31-79

Remuneration and other Committees of Board

29, 55, 69-71

Human Capital
Communication To Shareholders & Stakeholders
Information available on website
Other information

41, 128 -131, 208-211 (GRI)


274, www.primebank.com.bd
191-195 (GRI)

Management Review And Responsibility

101-137

Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports

55-56

Any other investor friendly information

274

Risk Management & Control Environment


Description of the Risk Management Framework
Risk Mitigation Methodology

138-153

Disclosure of Risk Reporting


Stakeholders Information
Distribution of shareholding (Number of shares as well as category wise, e.g Promoter group,
FII etc)
Shares held by Directors/Executives and relatives of Directors/Executives
Redressal of investors complaints

258-259, 343
258, 343
274

Graphical/ Pictorial Data:


Earnings per Share
Net Assets
Stock Performance

262-263

Shareholders Funds
Return on Shareholders Fund
Horizontal/Vertical Analysis including following
Operating Performance (Income Statement)
- Total Revenue
- Operating profit
- Profit Before Tax

41-44, 266-267

- Profit after Tax


- EPS
Statement of Financial Position (Balance Sheet)
Shareholders Fund
Property Plant & Equipment
Net Current Assets
Long Term Liabilities/Current Liabilities

41-44, 266-267

PARTICULARS

PAGE NO.

Profitability/Dividends/ Performance and Liquidity Ratios


Gross Profit Ratio
Earning before Interest, Depreciation and Tax
Price earning ratio
Current Ratios

266-267

Return on Capital Employed


Debt Equity Ratio
Statement of Value Added and Its Distribution
Government as Taxes
Shareholders as dividend
Employees as bonus/remuneration
Retained by the entity

268-270

Market share information of the Companys product/services


Economic value added
Additional Disclosures
For Example
Human Resource Accounting

131, 223-256, 187-221 (GRI)

Any other good additional disclosures ( Independence certification Eg GNV / GRI )


Specific Disclosures
Disclosure of Ratings given by various rating agencies for Instruments issued by /of Bank. For
eg. FD, CD, Tier I perpetual Bonds
Details of Advances portfolio Classification wise as per the direction issued by the central
bank of the respective countries

261
325-328

Disclosure for Non Performing assets


- Movements in NPA
- Sector-wise breakup of NPA

338-340

- Movement of Provisions made against NPA


- Details of accounts restructured as per regulatory guidelines
Maturity Pattern of Key Assets and Liabilities (ALM)
Classification and valuation of investments as per regulatory guidelines/Accounting Standards

388-389
365

Business Ratio/Information
- Statutory Liquidity Reserve (Ratio)
- Net interest income as a percentage of working funds / Operating cost Efficiency ratio
- Return on Average Asset
- Cost / Income ratio
- Net Asset Value Per Share
- Profit per employee

41-44, 266-267

- Capital Adequacy ratio


- Operating profit as a percentage of working funds
- Cash Reserve Ratio / Liquid Asset ratio
- Dividend Cover ratio
- Gross Non-Performing assets to gross advances/Non-Performing Loans (Assets) to
Total Loans (Assets)
Details of credit concentration / Sector vise exposures
The break-up of Provisions and contingencies included in the Profit and Loss Account
Disclosure under regulatory guidelines
Details of Non-Statutory investment portfolio
Disclosure in respect of assets given on operating & finance lease

326-327
356
154-173
320-323, 365
323-327

Disclosures for derivative investments

319-323

Bank's Network : List of Centers or Branches

433-438

Annual Report 2014

Corporate Governance
Disclosure Checklist
PARTICULARS

PAGE NO.

1. BOARD OF DIRECTORS, CHAIRMAN AND CEO


1.1

Company's policy on appointment of directors disclosed.

1.2 Adequate representation of non executive directors i.e. one third of the board, subject to a
minimum of two
1.3 At least one independent director on the board and disclosure/affirmation of the board on
such directors independence.
1.4 Chairman to be independent of CEO
1.5 Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure
of independence of Non Executive Directors
1.6 Existence of a scheme for annual appraisal of the boards performance and disclosure of the
same.
1.7 Disclosure of policy on annual evaluation of the CEO by the Board.

52
52
52
52
55
55
55

1.8 Disclosure of policy on training (including details of the continuing training program) of
directors and type and nature of training courses organized for directors during the year

55

Existence of a scheme for annual appraisal of the boards performance


1.9 At least one director having thorough knowledge and expertise in finance and accounting to
provide guidance in the matters applicable to accounting and auditing standards to ensure

56

reliable financial reporting.


1.10 Disclosure of number of meetings of the board and participation of each director (at least 4
meetings are required to be held)
1.11 Directors issue a report on compliance with best practices on Corporate Governance that is
reviewed by the external auditors
2.

73

VISION / MISSION AND STRATEGY


2.1 Companys vision / mission statements are approved by the board and disclosed in the
annual report.

3.

69

57

2.2 Identification of business objectives and areas of business focus disclosed

57

2.3 General description of strategies to achieve the company's business objectives

58

AUDIT COMMITTEES
3.1 Appointment and Composition
3.1.1 Whether the Audit Committee Chairman is an independent Non Executive Director
and Professionally Qualified
3.1.2 Whether it has specific terms of reference and whether it is empowered to investigate
/ question employees and retain external counsel
3.1.3 More than two thirds of the members are to be Non Executive Directors
3.1.4 All members of the audit committee to be suitably qualified and at least one member
to have expert knowledge of finance and accounting.
3.1.5 Head of internal audit to have direct access to audit committee
3.1.6 The committee to meet at least four times a year and the number of meetings and
attendance by individual members disclosed in the annual report.

58
58
58
58
58
70

3.2 Objectives & Activities


3.2.1 Statement on Audit Committees review to ensure that internal controls are well
conceived properly administered and satisfactorily monitored
3.2.2 Statement to indicate audit committees role in ensuring compliance with Laws,
Regulations and timely settlements of Statutory dues

60
60

3.2.3 Statement of Audit committee involvement in the review of the external audit function:

Ensure effective coordination of external audit function

Ensure independence of external auditors

To review the external auditors findings in order to be satisfied that appropriate


action is being taken

61

Review and approve any non audit work assigned to the external auditor and
ensure that such such work does not compromise the independence of the
external auditors.

Recommend external auditor for appointment/ reappointment

3.2.4 Statement on Audit committee involvement in selection of appropriate accounting


policies that are in line will applicable accounting standards and annual review.
3.2.5 Statement of Audit Committee involvement in the review and recommend to the board
of directors, annual and interim financial releases
3.2.6 Reliability of the management information used for such computation
4.

4.2 Narrative description of key features of the internal control system and the manner in which
the system is monitored by the Board, Audit Committee or Senior Management.

62
62-63
62

4.4 Disclosure of the identification of risks the company is exposed to both internally & externally

64

4.5 Disclosure of the strategies adopted to manage and mitigate the risks

64

Ethics and Compliance


conflict of interest, compliance with laws and regulations etc..
5.2 Dissemination / communication of the statement of ethics & business practices to all
directors and employees and their acknowledgement of the same
5.3 Boards statement on its commitment to establishing high level of ethics and compliance
within the organization
5.4 Establishing effective anti-fraud programs and controls, including effective protection of
whistle blowers, establishing a hot line reporting of irregularities etc.

65
65
65
65

REMUNERATION COMMITTEE
6.1 Disclosure of the charter (role and responsibilities) of the committee
6.2 Disclosure of the composition of the committee (majority of the committee should be nonexecutive directors, but should also include some executive directors)
6.3 Disclosure of key policies with regard to remuneration of directors, senior management and
employees

7.

62

4.3 Statement that the Director's have reviewed the adequacy of the system of internal controls

5.1 Disclosure of statement of ethics and values, covering basic principles such as integrity,

6.

62

INTERNAL CONTROL & RISK MANAGEMENT


4.1 Statement of Director's responsibility to establish appropriate system of internal control

5.

61

66
66
66

6.4 Disclosure of number of meetings and work performed

66

6.5 Disclosure of Remuneration of directors, chairman, chief executive and senior executives.

66

HUMAN CAPITAL
7.1 Disclosure of general description of the policies and practices codified and adopted by
the company with respect to Human Resource Development and Management, including
succession planning, merit based recruitment, performance appraisal system, promotion and

66-67

reward and motivation, training and development, grievance management and counselling.
7.2 Organizational Chart
8.

8.1 Disclosure of the Company's policy / strategy to facilitate effective communication with
shareholders and other stake holders
8.2 Disclosure of companys policy on ensuring participation of shareholders in the Annual General
Meeting and providing reasonable opportunity for the shareholder participation in the AGM.
9.

99

Communication to Shareholders & Stakeholders


67
68

Environmental and Social Obligations


9.1 Disclosure of general description of the company's policies and practices relating to social
and environmental responsibility of the entity
9.2 Disclosure of specific activities undertaken by the entity in pursuance of these policies and
practices

68
68

Annual Report 2014

To be the best Private


Commercial Bank in
Bangladesh in terms of
efficiency, capital adequacy,
asset quality, sound
management and profitability
having strong liquidity.

O U R

10

V I S I O N

To build Prime Bank Limited


into an efficient, market
driven, customer focused
institution with good
corporate governance
structure.
Continuous improvement
of our business policies,
procedures and efficiency
through integration of
technology at all levels.

O U R M ission

11

Annual Report 2014

Corporate
Philosophy
For Our Customers

To provide the most courteous and efficient service in every


aspect of its business
To be innovative in the development of new banking products
and services

For Our Employees

By promoting their well-being through attractive


remuneration and fringe benefits
By promoting good staff moral through proper staff training
and development,
And provision of opportunities for career development

For Our Shareholders

By forging ahead and consolidating its position as a stable


and progressive financial institution
By generating profits and fair return on their investment

For Our Community

By assuming our role as a socially responsible corporate


citizen in a tangible manner
By adhering closely to national policies and objectives
thereby contributing towards the progress of the nation
upholding ethical values and best practices

Constantly seeking to improve performance by aligning our goals with stakeholders expectations. Because we
value them.

12

Strategic
Priority

Maintain strong capital base by expediting borrowers rating, concentrating on lending portfolio having lower
capital charge, strengthening Internal Capital Adequacy Assessment Process (ICAAP)

Continuation of diversification of credit portfolio in corporate exposure, emphasize on retail, SME and agricultural
loan, address gender issue by providing loans to women entrepreneurs in SME segment and emphasize on
geographical diversification.

Improvement of deposit mix by maintaining efficient deposit mix, increase share of low cost and no cost deposit
in total deposit, increase non-funded business including cash management.

Maintain adequate level of liquidity through minimizing asset-liability mismatch and recovery of past due loans.

Diversification of products and services by introducing IT based innovative products and alternate delivery
channels.

Increase share of inward remittance by expansion of existing exchange houses, opening of new exchange
houses, increase in domestic network for the beneficiaries through strategic alliance, development of new
products for the NRBs

Increase non-funded (not-interest fee based) income

Extend banking services to un-banked and under banked people for inclusive growth.

Innovative approach in dealing with complex and large transactions/fund requirements with strategic alliance.

Improve internal governance through strengthening good corporate cultures, motivation, training and
supervision as per KPIs in all levels of management.

Strengthening internal control and monitoring through centralisation

Conduct BPR (Business Process Re-engineering) in different functional areas to improve efficiency and bring in
required structural change.

Improvement of IT infrastructure in order to develop new IT based products and services.

Integrated marketing effort by creating a customer-orientated relationship management culture, for brand strategy
development, Brand Repositioning and extensive marketing for branding Hasanah investment and card.

Development in Human Resource Management System to motivate and retain the Human Resources and
transform Human Resources to Human Capital through proper training in every aspects of working area.

Cost optimization at all levels of operation by ensuring budgetary control.

Expansion of activities related to Corporate Social Responsibility and Green Banking.

13

Annual Report 2014

Ethics, Integrity
and Trust
Banking deals with public money where Ethics,
Integrity and Trust is utmost important. Prime Bank
upholds these principles in every section by its
management and customer service. The following
are the key principles of Employee Codes of Ethics
and Business Conduct:
Provide
service to customers with
uncompromising integrity, utmost respect,
unwavering responsibility and dedicated
citizenship

Trust

Ethics

Integrity

Protect privacy and confidentiality of customer


information

Prevent money laundering and fraud

Demonstrate workplace respect

Green
Banking

The environmental degradation needs to be tackled in a concerted manner by all. Society demands that business
also take responsibility in safeguarding the planet. As a responsible Corporate Citizen, Prime Bank reinforced its
Green Banking initiatives.

14

Statement Regarding Forward


Looking Approach

The Annual Report contains some forward looking statements regarding the business environment and its likely
effect in the financial conditions of PBL. Statements which are not historical facts including statement of PBLs belief,
expectation are forward looking statements. Words such as plan, anticipate are forward looking statements. Forward
looking statement involves inherent risks and uncertainties. Some factors may actually cause actual results to differ
and some may significantly deviate from the forward looking approach. Some of the factors that may affect the
business environment are given below:

Changes in the general economic condition resulting from natural calamities and political disturbances

Changes in government policy issues

Increase in Tax, VAT on banking services

Increase in corporate tax rate

Increase in CRR and SLR of the banks

Withdrawal of incentive given to some thrust sectors which may make the projects slow moving

Directives to reduce the lending rates to finance essential items

Increase in provisioning requirement may reduce the ROA and ROE

Reducing the margin ratio for investment accounts

Volatility in interest rate

Volatility in capital market arising from speculations

Compliance issues raised by the international forums which are likely to affect the export growth

Rise in international prices of essentials which may result to volatility in Foreign Exchange Market

International embargo/unrest in Middle-East countries may affect remittances and trade

Risk management of lending portfolio often requires stress testing which is based on sophisticated mathematical
tools and cannot solely be dependent on existing MIS. The level of technology in banking industry is yet to
acquire that sophistication.

15

Annual Report 2014

Corporate
Profile
Established in April, 1995 by a group of visionary
entrepreneurs conceive an idea of floating a commercial
bank with different outlook. Prime Bank is known for its
superior service quality, brand image, strong corporate
governance and corporate culture. Committed for
excellence, Prime Bank is a top-tier bank in Bangladesh
and reputed among regulators as distinctly compliant
and among customers as agile and responsive to
change. A Bank aligned to its vision, mission, values and
strategic priorities.

Business Strategy
The bank is driven by key business areas, namely
Corporate Banking, SME & Retail and Islamic
Banking. These are competently supported by other
functions such as Operations, IT, R&D, Marketing,
HR, Procurement, Risk Management, Compliance,
Internal Audit and Financial Administration etc. In
addition, the global subsidiaries- Prime Exchange Co.
Pte Ltd. Singapore, PBL Exchange (UK) Limited, PBL
Finance (Hong Kong) Limited; and our local subsidiary
Prime Bank Investment Limited (PBIL) and Prime Bank
Securities Limited. High on our list of strengths are
our growing customer base, our highly trained and
motivated staff, our superior technological platform,
IT driven processes and our highly developed work
ethic and culture. Prime Bank has always been a
very customer centric Bank maintaining the highest
levels of engagement with its customers. This was
reinforced by the highly visible initiatives taken to
make our services more accessible and convenient.
Our channel expansion and subsequent presence
within top tier supermarket chains has significantly
enhanced accessibility and convenience in respect of
the customer. Likewise, our upgraded Internet banking
platform is extremely user friendly, a factor that will
aid in our efforts to promote its usage among most
of our customers. Both of these initiatives have made
transacting business with Prime Bank much easier.
We are also reinforcing the personal touch through
more optimal staff management and deployment
whilst centralization and automation frees up time
at our branches to better serve customers. Our
footprint in the country has widened considerably
this year with 140 branches and 160 ATMs plus on

16

line banking services. The Bank has also strengthened


infrastructure and enhanced productivity by
maximizing our IT capabilities and upgrading our risk
management system.

Strong Deposit Base


We work for increasing savings to contribute towards
countrys economic development. We have introduced
a new deposit product named My First Account for
students that received wide response of the young
generation. The Bank always stressed upon maintaining
efficient deposit mix. Customer deposits of the bank
have been growing substantially. The growth was
supported by branch network, innovative IT based
products and superior services along with liability
campaigns carried out throughout the year.

Capital Adequacy Ratio


In maintaining adequate capital against overall risk
exposure of the Bank, our guiding philosophy has been
to strengthen risk management and internal control.
PBLs regulatory capital as on December 31, 2014 stood
at Tk. 27,266.20 million. Whereas, the Capital Adequacy
Ratio (CAR) was 12.64% under Basel-II, as per Central
Banks minimum capital requirement of 10.00%.

Economic Capital for Efficient Asset Management


In the wake of the global credit crisis, it is very important
to implement the concept of economic capital, which
will act as a safety cushion for the bank. Still reeling
from the effect of unanticipated losses, a large number
of banks are now struggling to conserve and manage
capital. In 2014, credit risks continued to be ferment and
fuelled in driving up market volatility. In such a market,
the capability to manage the banking business in a
risk-sensitive Economic Capital framework becomes
necessary. Bankers have had no other choice but
to reallocate or even reduce their portfolios. We are
carefully considering the potential unexpected losses,
thus bringing up the concept of economic capital that is
associated with each individual activity to minimize the
risks of the Balance Sheet and safeguard the interest of
the stakeholders.

ALM
We continued to have a firm grip on the levers of risk,
cost and investment, and using our balance sheet
strength to increase the financing support to our
customers. Deposit increased by Tk.2,931 million during
2014 with an impressive growth rate of 1.45 percent. We
maintained a well-diversified Loans & Advances portfolio
and at the same time continued to take the conservative
approach to manage the balance sheet, maintain a
strong liquidity position and keep a watchful eye on
asset quality given the uncertainties that remain in the
external environment. Retail deposits were mobilized
by providing competitive and superior products while
corporate deposits have been collected with corporate
deposit campaign. Thus, high cost of fund been
managed with adequate focus on no and low cost
fund. Thus, sector wise the Bank maintained optimum
exposure with due concentration on SME and Retail
assets. The Bank adequately diversified its investment
through project finance, SME and Retail. Funds under
Corporate, SME and Retail stood at Tk.114.30 billion,
20.05 billion and 12.58 billion respectively.

and Bangladesh Bank and overseeing the overall green


financing activities of the bank.

Our Strategic Priorities


Sustainable
business
growth,
dynamic
and
talented human capital driven by values, excellent
risk management, and involvement of mid-level
management in decision-making process will surely
command some key strength for Prime Bank. We believe
that, as long as we adhere to the right development
strategy, take pro-active actions and forge ahead
determinedly, 2015 will be full of hopes and harvests.
Few of the major tactical and strategic moves that have
been chalked out to drive for the current year are:
Diversify loan portfolio to avoid excessive
concentration to particular sectors as well as
to invest funds in the productive sectors.

Grow business in SME and Retail portfolio at


least by 40%.

Implement Economic capital framework to


derisk the Balance Sheet for the potential
associated unexpected losses.

Environment-friendly Banking

Greater emphasis to serve unbanked and


under-banked population of the country.

We have incorporated sustainability principles into


day-to-day activities of the bank. Our aim is to do
best to ensure that the credits we extend to our
customers are utilized for environmentally sound
and sustainable purposes. As per Environmental and
Social Risk Policy, i.e. Environmental Blueprint of the
bank approved by the Board, all business units must
recognize the social concerns and impact on the
environment caused by their customers before taking
business decisions. Green banking considers all the
social and environmental factors along with financial
priorities with an aim to protect the environment as
well as to foster the economic development in a more
environment friendly way. It covers a multitude of areas
from a bank being environmentally friendly to how
their money is invested. To reduce carbon emission,
green house effects, dependency on traditional
energy, natural gas as well as reduce the environmental
degradation, PBL has established a separate cell called
Green Financing Cell for financing under refinance
scheme of Bangladesh Bank to set up of Effluent
Treatment Plant (ETP), Bio-gas Plant, Solar Energy (i.e.
Solar panel, Solar home System, Solar mini Grid, Solar
irrigation pumping system, Solar PV Assembly plant),
Water Electricity Plant, PET bottle reprocessing plant,
Hybrid Hoffman Kiln (HHK) etc. The Green Banking Cell
(GBC) have been formed with the task of developing
policies, products, planning, reporting to management

Allocation of capital through customer


account review and transaction analysis upon
determination of Risk Adjusted Return on
Capital.

Strengthen Information Technology to ensure


security of technology and enable safer
banking service to customers.

Monitor and strengthen recovery drive to bring


down the NPL below 3% to maintain asset
quality at standard level.

Formation of Head line Business Banking


Team to provide priority service to our valued
customers to ensure better services with
maximum satisfaction for more business.

Our Commitments
PBL is committed to deliver value to its stakeholders.
PBL will continue to provide effective and competitive
financials solutions and services to its customers. It will
continue to enhance the shareholders value through
consistent financial performance and efficient capital
management. PBL will foster a strong performance
and learning culture that allows the development and
talents of its employees so that they can effectively play
the role of PBL Brand Ambassador.

17

Annual Report 2014

MILESTONES

DATE

Memorandum and Articles of Association signed by the Sponsors

05.02.1995

Incorporation of the Company

12.02.1995

Certificate of Commencement of Business

12.02.1995

License issued by Bangladesh Bank

20.02.1995

License issued for opening the first Branch, Motijheel

08.04.1995

Formal launching of the Bank

17.04.1995

Commencement of business from the Motijheel Branch

17.04.1995

Commencement of Islamic banking business from IBB, Dilkusha

18.12.1995

Initial Public Offerings (IPO)


Publication of Prospectus
Subscription Opened
Subscription Closed

29.08.1999
09.09.1999
22.09.1999

Listed with Chittagong Stock Exchange Limited

15.11.1999

Listed with Dhaka Stock Exchange Limited

27.03.2000

Trading of Shares on Dhaka Stock Exchange Limited

29.03.2000

Trading of Shares on Chittagong Stock Exchange Limited

29.03.2000

Dividend declared in the 5th AGM (First after the IPO)

14.03.2000

Registered as Merchant Banker with the Securities and Exchange Commission

29.03.2001

18

ilestones

License issued from the Bangladesh Bank as Primary Dealer

11.12.2003

Registered as Depository Participant of CDBL

29.03.2004

Trading of Shares started in Demat Form in Stock Exchanges

15.06.2004

Completion of 10 years of Service

17.04.2005

Agreement with Temenos for Core Banking Software Temenos T24

30.06.2005

Incorporation of Prime Exchange Co. Pte. Ltd., Singapore

06.01.2006

Prime Exchange Co. Pte. Ltd., Singapore formally started business

08.07.2006

Opening of first Off-shore Banking Unit at DEPZ, Savar, Dhaka

15.03.2007

Launching of ATM

11.03.2008

Launching of Internet Banking

01.08.2009

Opening of first SME Centre

04.08.2009

Recipient of SAFA Best Bank Award

05.12.2009

Incorporation of PBL Exchange (UK) Ltd.

19.11.2009

Obtained Permission for issuance of Subordinated Bond for Tk. 2,500 Million for Basel-II
Compliance

31.12.2009

Incorporation of PBIL

28.04.2010

Incorporation of PBSL

29.04.2010

Obtained permission for issuance of Rights Share

25.05.2010

Launching of SMS Banking

25.08.2010

Ground breaking of Prime Tower

22.09.2010

Change of Face Value and Market Lot of Shares of PBL

06.01.2011

Launching of Phone Banking

02.08.2011

Commencement of business of PBL Finance (Hong Kong) Ltd.

01.09.2011

Launching of Mobile Banking

25.03.2012

Launching of Biometric Smart Card-Prime Cash

20.05.2012

Recipient of ICMAB Best Corporate Award-2012

15.01.2013

Launching of Prime Bank Nursing Institute

13.04.2013

Launching for the first time in Bangladesh the JCB Cards online acquiring service

20.07.2013

Launching of Islamic Credit Card

24.07.2013

Launching of JCB Cards in Bangladesh

04.06.2014

Launching of Premium Banking Service 'Monarch

27.10.2014

Recipient of 14th ICAB National Award for Best Presented Annual Reports 2013 (Category:
Private Sector Banks including Co-operative Banks) 1st Prize
Recipient of 14th ICAB National Award for Best Presented Annual Reports 2013 (Category:
Corporate Governance Disclosures) 2nd Runner Up
Recipient of SAFA SAARC Anniversary Awards for Corporate Governance Disclosures 2013 Winner
Recipient of SAFA Best Presented Annual Report Awards and SAARC Anniversary Awards for
Corporate Governance Disclosures 2013 2nd Runner Up

30.11.2014
30.11.2014
04.12.2014
04.12.2014

19

Annual Report 2014

Board of
Directors Profile
Mr. Azam J Chowdhury current Chairman of the Board of Directors is
an entrepreneur and leading industrialist of the country. He had been
Chairman of the Board in the past also on more than five occasions.
Mr. Chowdhury is Chairman of East Coast Group (ECG), a diversified
conglomerate engaged in Oil and Energy business for more than three
decades. Besides, he is the Chairman of The Consolidated Tea & Lands
Company Bangladesh Limited (formerly James Finlay Limited) and Bangladesh
Trade Syndicate Limited, an associate of TNT Global Express Company.

Azam J Chowdhury
Chairman

Mr. Chowdhury is also the Managing Director of MJL Bangladesh Limited,


a listed company and affiliate of Exxon Mobil Corporation, USA actively
engaged in expansion of Fuel & Energy sector of the country. In addition,
he is Vice President of Bangladesh Energy Companies Association and
a Member of Advisory Council of the Government, Peoples Republic of
Bangladesh on Power, Energy & Mineral Resources.
Mr. Chowdhury is also elected President of Bangladesh Ocean Going
Ship Owners Association (BOGSOA) and Director of Central Depository
Bangladesh Limited (CDBL).
In recognition of his repute and contribution, Mr. Chowdhury has earned
acclamation both home and abroad and is currently Honorary Consulate
of Hungary in Bangladesh.
He is a keen Golfer and achieved several laurels in this sporting arena.
Khandker Mohammad Khaled, former Chairman and present Vice
Chairman of Prime Bank Limited is a BUET graduate in Mechanical
Engineering. After graduation he joined the then Water & Power
Development Authority (WAPDA), now Bangladesh Water Development
Board (BWDB). After having served BWDB for thirteen years, he started
his own business in 1975 establishing Greenland Engineers & Tractors
Company Limited (GETCO).

Khandker
Mohammad Khaled
Vice Chairman

He is currently Chairman & Managing Director of GETCO


Telecommunications Limited, GETCO Agro Vision Limited and GETCO
Limited. He is Vice- Chairman and Member, Board of Governor, Prime Asia
University. Besides, he is associated with numerous Chamber Bodies and
Societies in different capacities, prominent among which are Institute
of Engineers, Bangladesh, National Heart Foundation of Bangladesh,
Diabetic Association of Bangladesh, AMCHAM, Bangladesh, Bangladesh
Railway Spares and Accessories Suppliers Association, International
WHOs WHO Historical Society and 62-Engineers Club.
A very widely traveled person, Mr. Khaled is an amiable personality
continuously contributing to the social and educational development
activities of the country.
He is also a Member of the Audit Committee and Risk Management
Committee of the Board of Directors of Prime Bank Limited.

20

M. A. Khaleque
Vice Chairman

Mr. M. A. Khaleque is the founder, Sponsor Director, and incumbent Vice


Chairman of the Board of Directors of Prime Bank Limited. During the
last 27 years, he has set an enviable standard by establishing high end
institutions ranging from banks, non-banks, life and general insurance
in the country. Mr. Khaleques name has now become synonymous with
some of the finest institutions having high professional outlook and vision
in the nation. Spanning over a period of around 22 years, success came
as a matter of choice through Prime Finance & Investment Ltd, Fareast
Islami Life Insurance Company Ltd., Prime Insurance Ltd., Fareast Finance
& Investment Ltd., PFI Securities Ltd., Fareast Stocks and Bonds Ltd.,
Prime Islami Securities Ltd., Prime Prudential Fund Ltd., Prime Financial
Securities Ltd some of which are already market leaders in their respective
fields. Having set epoch making standards in the financial arena, he set
his sight into the emerging information technology, booming property
sector and promising Agrobased sector of the country and his dreams
were fulfilled through promotion of GETCO Limited / GETCO Agrovision
Ltd., GETCO Telecommunications Ltd., HRC Technologies Ltd., Prime
Property Holdings Limited and PFI Properties Ltd. He is a member of the
Board of Governors, Primeasia University. His social contribution came
through his foundation under the name and style of MAK Foundation
through establishment of a good number of educational institutions
such as University, Degree and honors College, Technical College, Krishi
College, High School, Girls High School, Kindergartens and Madrasahs
and a HefzKhana too imparting quality education in the society. He is
actively involved with SEBA, a benevolent organization in Bangladesh.
He is currently the Chairman of Fareast Stocks & Bonds Ltd. and PFI
Properties Ltd. He is also a Member of the Audit Committee of the Board
of Directors of Prime Bank Limited.

Quazi Sirazul Islam, a Sponsor Director & former Chairman is current


Chairman of the Executive Committee of the Board.
A freedom fighter and elected Member of Parliament in 1996 and 2001,
Mr. Islam is the Managing Director of renowned Jewellery House, Amin
Jewellers Limited.
He is the Chief Advisor of Sonar Bangla Insurance Limited, Member of
Gulshan Club Limited and Chairman of the City Hospital (Burn Hospital),
only Private Sector Hospital of such kind in Bangladesh.

Quazi Sirazul Islam


Chairman
Executive Committee

A philanthropist by nature, Mr. Islam was awarded Kabi Jasimuddin Gold


Medal, Maulana Akram Khan Gold Medal, Sufi Motahar Hossain Gold
Medal and Atish Dipankar Gold Medal for remarkable contribution in
education and social welfare. He was also awarded MJF (Melvin Jones
Fellow) Medal by the Lions International Foundation for his contribution
to the Society.
He is the current Chairman of Bangladesh Jewellery Association and also
life member of Red Crescent Society, Bangladesh and Member Trustee,
Peoples University of Bangladesh.

21

Annual Report 2014


Mr. Imran Khan was inducted as Director in the Prime Bank Board in the
year 2012. He has been serving as the Vice Chairman of the Executive
Committee of the Board since 2013.
He is one of the Directors of the reputed Pedrollo nk Limited a market
leader for sales & distribution of PEDROLLO Brand Water pumps of Italy
in Bangladesh. A promising business personality, he is also Director of
the family business enterprises like PNL Holding Limited, PNL Water
Management Limited, Polyexprint Ltd, Halda Valley Tea Co. Ltd, Hill
Plantation Limited.
Mr.Khan is an Ex-Cadet of Fauzdarhat Cadet College, Chittagong and
went on to complete his graduation from North South University, Dhaka.

Imran Khan
Vice Chairman
Executive Committee

Mr. Khan actively associates himself with social activities and is a


member of the Governing body of Lion Mukhlesur Rahman Foundationa renowned NGO and Charitable Organization operating in and from
Chittagong for the underprivileged and poor masses.

Prof. Ainun Nishat, a renowned personality in the arena of Water


Management, Climate Change, Environment and Disaster Management,
is an Independent Director and Chairman, Audit Committee of the Board
of Prime Bank. Immediate past Vice Chancellor of BRAC University, Dr.
Nishat is presently Professor Emeritus of the same University.
He obtained Ph.D. in Civil Engineering from University of Strathclyde,
Glasgow, U.K. He is a graduate of Bangladesh University of Engineering
and Technology (BUET) in Civil Engineering where he started his teaching
career in the Department of Civil Engineering and he became Professor
of Water Resource Engineering in due course.

Prof. Ainun Nishat


Independent Director &
Chairman, Audit Committee

He is past Director of Institute of Water and Flood Modeling BUET, Dhaka,


and Country Representative of International Union for Conservation of
Nature and Natural Resources.
A widely traveled person Prof. Nishat has authored many books and
articles at home and abroad.

Mrs. Nasim Anwar Hossain, Chairperson of the Risk Management


Committee of the Board, is one of the Sponsor Directors of Prime Bank
Limited. Mrs. Hossain, Masters in Political Science from Dhaka University, is
a successful business personality and currently Director of Prime Cement
Ltd., Lubricants Asia Ltd. and Bengal Tiger Cement Industries Limited.
Mrs. Hossain is an active social worker and takes keen interest in different
benevolent and philanthropic activities.
She is also a Member of the Executive Committee of the Board of
Directors of Prime Bank Limited.

Nasim Anwar
Hossain
Chairperson
Risk Management Committee

22

Mr. Md. Nader Khan is a Sponsor Director and immediate past Chairman of the
Board of Prime Bank. He is a prominent entrepreneur and has the credentials
of setting up many high-ended business establishments in different sectors.
Currently, he is associated with the following business concerns:
Chairman:
Artisan Ceramics Ltd.

New Vision Information Technology Ltd.

Managing Director:
Pedrollo nk Limited

Md. Nader Khan


Director

Polyexprint Ltd.

Polyex Laminate Ltd.

Halda Valley Tea Co. Ltd.

Polytape Ltd.

PNL Water Management Ltd.

Director:
The Consolidated Tea and Lands Company (BD)

Hill Plantation Ltd.

Baraoora (Sylhet) Tea Company Ltd.

One of his business concerns, Pedrollonk Limited, is the market leader in water
pump sales & distribution in Bangladesh since 1985. Mr. Khan was honored
with Prime Ministers Award 2010 for his contribution in tree plantation. A
goodhearted personality, Mr. Khan is actively involved in diverse CSR activities.
He is the Chairman of Lion Mukhlesur Rahman Foundation, Lion Mukhlesur
Rahman Plastic Surgery Hospital, Zero Club Foot Project, Founder of Cider
International School, Ex- Governor (2000-2001) of Lions Club InternationalDistrict 315 B4 Bangladesh, to mention a few.
He is a trustee Member of Independent University of Bangladesh (IUB) &
Chittagong Independent University (CIU).
Mr. Khan believes hard work and business integrity are the key to success.
He considers vision is necessary to give proper directions for economic
development. He, in view of his vast experience, likes to contribute in
national development through his experience for expansion of quality
education and tea plantation across the country.

Mr. Md. Shirajul Islam Mollah, a Sponsor Director of Prime Bank is also past
Chairman of the Board of Directors. He also held the position of Chairman
of the Executive Committee of the Board on more than one occasions
and is currently Member of the same Committee.
A very successful business personality, Mr. Shirajul Islam is the Managing
Director of China-Bangla Ceramic Industries Limited, Bengal Tiger
Cement Industries Limited, Bajnabo Textile Mills Limited and United
Shipping Lines Limited.

Md. Shirajul Islam


Mollah
Director

Widely traveled, Mr.Shirajul Islam is involved with various social and


educational activities and earned recognitions from a number of
organizations. He is the founder of Bajnabo Abul Faiz Mollah High School,
Shibpur, Narsingdi. A philanthropic, Mr. Md. Shirajul Islam Mollah is also
the Chairman of Shirajul Islam Mollah Samaj Seba Foundation.
He is a member of Dhaka Stock Exchange (DSE) and elected Member
of Parliament and current President of Bangladesh Ceramic Wares
Manufacturers Association.

23

Annual Report 2014


Mr. Mafiz Ahmed Bhuiyan is a Sponsor Director and past Chairman of the
Executive Committee and Vice Chairman of the Board of Directors. He
is currently member of the Executive Committee and Risk Management
Committee of the Board.
As a Businessman, Mr. Bhuiyan in the early years of RMG in Bangladesh
led in setting up joint-venture with the reputed firms belonging to the
developed countries like Taiwan, Hong Kong, China and Korea.
He is also involved with Australian International School (International
Holdings Ltd) and Eastern University & South East University.

Mafiz A. Bhuiyan

He is also Managing Director of Shepherd World Trade Limited, Shepherd


Consultant & Management Ltd. and Representative Director in the Board
of Citizen Securities & Investment Limited as Chairman.

Director

Mrs. Marina Yasmin Chowdhury is a Sponsor Director and former Vice


Chairperson of Prime Bank Limited. She is currently the Director of East
Coast Group (ECG), a conglomerate that has been engaged in Oil and
Energy business for last thirty one years. She is also the Chairman of
Clean Fuel Filling Station Limited and Parkesine Products Limited, sister
concerns of ECG.
Mrs. Chowdhury is also former director of Green Delta Insurance
Company Limited, one of the leading general insurance companies of
Bangladesh.

Marina Yasmin
Chowdhury
Director

Outside the business, Mrs. Marina Y. Chowdhury is actively engaged


in Social Welfare programs conducted through East Coast Group
Foundation and is also takes keen personal interest in other philanthropic
and charitable causes like Health and Education for the underprivileged.
In her leisure time she enjoys working out, shopping and cooking variety
of culinary dishes for her family.

Mrs. Nazma Haque, Director is one of the Sponsor Directors of Prime


Insurance Company Limited. Mrs. Nazma Haque, a Graduate in Economics
from Dhaka University is a successful business personality as well. She is
Executive Director of Bangla Trac Limited, Chairman of Anirban Enterprise
Limited and also Director of Asian Gate Limited, ACORN Limited And
THANE Technology Limited.
Outside business, Mrs. Nazma Haque is an active social worker and
engages herself in Social Welfare programs exhaustively.
She is one of the founders of Bangla Trac Cricket Academy located in
Rajshahi engaged in training of the underprivileged sportsman of the
locality.

Nazma Haque
Director

24

Mrs. Salma Huq is one of the Sponsor Directors and former Chairman
of the Executive Committee of Prime Bank Ltd. She is a Director of
GQ Group since 1986, which is engaged in manufacturing pen, plastic
furniture, disposable plastic wares, pp woven sacks, mosquito coils and
snack foods. GQ Group is also one of the sponsors of Prime Insurance
Co Ltd, Prime Finance and Investment Ltd, PFI Securities Ltd and Prime
Capital Management Ltd.
Mrs. Salma Huq is actively engaged in philanthropic activities providing
scholarship to needy students, free medicine and arranging treatment
for the poor.

Salma Huq
Director

She is one of the founders of Qazi Saleema Huq Womens College and
Qazi Saleema Huq Girls High School.
She is currently Member of the Executive Committee and Risk
Management Committee of the Board of Directors of Prime Bank Limited.

Mrs. Muslima Shirin, Director is the Chairperson of MAWSONS Ltd- a


business house engaged in real estate business.
She was also a Director in the Board of Prime Finance & Investment
Limited representing M/s MAWSONS Ltd.
She is also a Member of the Risk Management Committee of the Board of
Directors of Prime Bank Limited.

Muslima Shirin
Director

A successful businessman, Mr. Md. Shahadat Hossain is a Sponsor


Director of Prime Bank Limited. He is a past Vice Chairman of the Board
of Directors also. His business entity consists of VIP Shahadat Poultry &
Hatchery, VIP Shahadat Cold Storage and Rangpur Agro Industries. An
active social worker, Mr. Hossain is associated with different social welfare
organizations dedicated to the services of general masses. He is also a
Member of the Executive Committee of the Board of Directors of Prime
Bank Limited.

Md. Shahadat
Hossain
Director

25

Annual Report 2014


Mr. Mizanur Rahman Bhuiyan, Chairman of Meghna Group, is a renowned
industrialist of Bangladesh. Through his strong leadership & vision, he
expanded & diversified the family business to its present level.

Mizanur Rahman
Bhuiyan
Director

Mr. Rahman, a Director, is representing the Uniglory Cycle Industries Ltd


in the Board of Prime Bank. The core business of Uniglory Cycle Industries
is to manufacture & export bicycle & its components to Europe, whereas,
Meghna manufactures full range of bicycle, CNG & motorcycle tyres &
tubes and recently started manufacturing automobile tyres. Meghna
has also a steel tube manufacturing unit that produces quality steel pipe
for bicycle frame & steel furniture. Besides involvement in the bicycle
industry, Meghna has a joint venture of Hanger manufacturing unit with
the renowned firm Mainetti of Italy. The group also has business stake in
a white cement manufacturing in collaboration with eminent Siam Group
of Thailand. In the recent years, Meghna has started a new line of business
of manufacturing garments accessories; like button, poly bags, printed
& woven labels tags and tapes. A fully automated corrugated carton
factory is already in operation where elastics, yarn & dyeing etc. are in
the pipeline. Meghna Group is very successful in the automotive sector in
Bangladesh. Mehgna is the sole distributor of prestigious German Brand
BMW, KIA Motors of Korea.
For contribution to national economy Meghna Group has been awarded
many times by the Govt. & non govt. bodies for export performance.
Transworld Bicycle Co. Limited received the National Export Trophy
Gold and Meghna Bangladesh limited received National Export Trophy
Silver. Meghna was awarded with the Business Enterprise of the year
2009 by the Daily star DHL Bangladesh Business Award. In the year
2005 Meghna received the BMW Best Facility in the region Award from
BMW Asia Limited. In the year 1999 Meghna Automobiles Limited also
received Best distributor of the year in Asia Region from KIA Motors
Corporation.
Mr. Mizanur Rahman is one of the Sponsor Directors of Prime Bank Limited
and past Chairman of the Board.
Widely traveled, Mr. Rahman is a member of Kurmitola Golf Club, Dhaka
Cantonment.

Mr. Nafis Sikder, Director is the Managing Director of renowned Palmal


Group founded by his late father, Engr. Nurul Haque Sikder, a prominent
business personality of the early eighties.
Mr.Nafis after completion of O and A level went to Washington University,
Saint Louis, Missouri, USA and obtained BS in Business Administration
with distinction. With his ingenuity and expertise in operations, strategic
management & marketing skills, expanded the Groups business many
folds in all the spheres of RMG business. The group at present is the most
prolific and trusted suppliers of Apparels to some of the reputed North
American, Australian and European buyers.

Nafis Sikder
Director

26

Mr. Nafis Sikder is an avid philanthropist and actively contributes in the


promotion and expansion of educational activities through establishing
Schools and Colleges. He is also associated with numerous socio welfare
and charitable organizations actively supporting the causes of Health
Care and poverty alleviation.

Prof. Dr. Mohammed Aslam Bhuiyan, Pro-VC of National University, is a


renowned educationist and was appointed an Independent Director
of the Bank in April 2009. He obtained his MS in Sociology on Rural
Development from the Moscow University, erstwhile USSR in 1976. He
was also educated in the USA & Germany. He did his Ph.D from Bombay
University under the fellowship of Indian Council of Social Science
Research (ICSSR). Professor Dr. Bhuiyan also successfully completed
a training programme for Directors Financial Institution on Corporate
Governance held in Kuala Lumpur, Malaysia in 2012.

Prof. Dr.
Mohammed Aslam
Bhuiyan
Independent Director

Mr. Bhuiyan is former Vice Chancellor of The Peoples University of Bangladesh


and Chairman of the Department of Sociology, University of Chittagong. He
was also Director CUCSU, Provost Shamsun Nahar Hall, Registrar (In charge) of
Chittagong University in the past. Presently Dr. Bhuiyan is a Senate Member of
Chittagong and Dhaka University, Syndicate Member of the Moulana Bhashani
University of Science & Technology and member, Presidium, Bangladesh India
Friendship Society. He is also Member of Governing Council of Bangladesh
Climate Change Resilience Fund (BCCRF), Ministry of Environment and Forest.
Prof. Bhuiyan wrote more than 100 academic papers published in National
& Foreign Journals including many leading Newspapers.
He is currently a Member of the Audit Committee of the Board of Directors
of Prime Bank Limited.

Mr. Manzur Murshed, a retired bureaucrat, is one of the Independent


Directors of the Bank. He graduated in Engineering (Electrical) in 1961
from the then Ahsan Ullah Engineering College under the University of
Dhaka and did MA (Public Admin) from American University, Beirut. He
started his career in 1961 as Assistant Engineer in East Pakistan Water
and Power Development Authority (EPWAPDA) and retired from service
as Member Planning & Development, Bangladesh Power Development
Board in December 1995. He was also Director of Eastern Cables Ltd.
He at present runs a consultancy firm offering expertise services in the
power sector.
He is a Member of the Audit Committee of the Board of Directors of Prime
Bank Limited.

Manzur Murshed
Independent Director
Mr Ahmed Kamal Khan Chowdhury took over the charge of Prime Bank
on 15th September 2014 as Acting Managing Director prior to becoming
Managing Director on 14th December 2014. Before taking over the charge
as Managing Director, he was Deputy Managing Director and Chief Risk
Officer of the same bank. He has over 30 years of banking experience in
the field of Finance, Risk Management, Internal Control and Compliance.
He held important management position viz. Chief Finance Officer, Chief
Risk Officer, Head of Credit Committee, CAMLCO (Chief Anti Money
Laundering Compliance Officer), Head of Finance and Head of Branch
in International, Specialized and Private Commercial Banks operating
in Bangladesh during his banking career. Over the time he developed
strong professional skills in multitasking environment and as a believer in
process development was always the core team member of the process
development to bring more transparency and smooth workflow.

Ahmed Kamal Khan


Chowdhury
Managing Director

Mr. Chowdhury is Masters in Economics from the University of Dhaka and


MBA in Finance and attended various trainings, workshops and seminars
at home and abroad on different aspects of banking.
He is a member of the Executive Committees of Association of Bankers of
Bangladesh and Primary Dealers Association of Bangladesh.

27

Annual Report 2014

02

C orporate G overnance

28

Composition of
Board and Committees

Board of
Directors

Mr. Azam J Chowdhury


Khandker Mohammad Khaled
Mr. M.A. Khaleque
Mr. Quazi Sirazul Islam
Mr. Md Nader Khan
Mr. Md. Shirajul Islam Mollah
Mr. Mafiz Ahmed Bhuiyan
Mr. Md. Shahadat Hossain
Mr. Mizanur Rahman Bhuiyan
Mrs. Marina Yasmin Chowdhury
Mrs. Nazma Haque
Mrs. Nasim Anwar Hossain
Mrs. Muslima Shirin
Mrs. Salma Huq
Mr. Nafis Sikder
Mr. Imran Khan
Prof. Ainun Nishat
Prof. Dr. Md Aslam Bhuiyan
Mr. Manzur Murshed
Mr. Ahmed Kamal Khan Chowdhury

Mr. Quazi Sirazul Islam


Mr. Imran Khan
Mr. Mafiz Ahmed Bhuiyan
Mr. Md. Shahadat Hossain
Mrs. Nasim Anwar Hossain
Mrs. Salma Huq
Mr. Md. Shirajul Islam Mollah

Audit
Committee

Prof. Ainun Nishat


Mr. M.A. Khaleque
Khandker Mohammed Khaled
Mr. Manzur Murshed
Prof. Dr. Md Aslam Bhuiyan

Mrs. Nasim Anwar Hossain


Khandker Mohammad Khaled
Mr. Mafiz Ahmed Bhuiyan
Mrs. Muslima Shirin
Mrs. Salma Huq

Shariah
Supervisory
Committee

Chairman
Vice Chairman
Member
Member
Member
Member
Member

Chairperson
Member
Member
Member
Member

Chairman
Vice Chairperson
Vice Chairperson
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Independent Director
Independent Director
Independent Director
Managing Director

Executive
Committee
Chairman
Member
Member
Member
Member

Risk Management
Committee

Prof. Maolana Mohammad Salahuddin


Prof. Maolana Dr. Mohammad Shahidul Islam
Prof. Dr. Shamsher Ali
Mr. M. Azizul Huq
Dr. Muhammad Abdur Rashid
Maolana Shah Mohammad Wali Ullah
Mr. Muhammad Abdul Wahhab
Mr. Azam J Chowdhury
Mr. Ahmed Kamal Khan Chowdhury
Mr. Abu Zafar Md. Sheikhul Islam

Chairman
Member
Member
Member
Member
Member
Member
Member
Member
Member Secretary

29

Annual Report 2014

From the Office of


the Chairman

30

The country witnessed an uneasy calm during the entire


two thousand fourteen but then it appears that the full
period was a kind of preparation for the bad time to
follow. This is also evident as 2015 has just set in and
early symptoms are suggestive of the unfavourable
situation, banking industry is going to confront rest of
the year. Again, such phenomenon is nothing unusual
as each year industry faces typical challenges though in
different formats. However, a good bank always has its
preparedness in store to ward of such challenges on the
strength of strong fundamentals and with the support
of the stakeholders. Our valued patrons can, therefore,
continue to have confidence on our management skills
and policies to carry forward the projected goals of
consolidation for the year no matter what the global or
local scenario is.

Global and National Outlook


The world economy is in the middle of a balancing act.
On one hand, countries have to address the legacies of
the global financial crisis, ranging from debt overhangs
to high unemployment. On the other, they face a gloomy
future. Potential growth rates are being revised downward
and these worsened prospects are in turn affecting
the confidence and demand today. Bank credit growth
has continued to be slow in the emerging markets and
economies, although it remains different in few.
Bangladesh currently stands strong with international
reserves more than twice the low levels of late 2011 with
a prudent overall fiscal stance and lower underlying
inflation. Significant progress has also been made
with structural reforms. Amendments to the Banking
Companies Act, passed in July 2013, have significantly
strengthened banking system governance, enhancing
the supervisory powers of BB to safeguard financial
stability. Progress towards MDG is also remarkable,
particularly on increasing access to primary education
and eliminating gender disparity. Women participation
in the parliament increased from 12.7% in 1991 to 20% in
2014 and in labor force it has increased to 36%
The countrys fiscal deficit is contained and public debt
is on a downward path. Real GDP growth is expected at
about 6% in FY15. The per capita income has increased
to USD 1,190 in 2014 from USD 843 in 2009. The
government expects both export earnings and import
expenditure to experience around 15% growth this year.

Customer Focus
Strong correlation has been found between consistent
customer journey and overall performance in customer
experience. In an era of proliferated banking products,
multi-channel touch points, Prime Bank has ensured
consistency in its services. The motto has always been
in delivering consistent pursuit of quality customer
experience. This is why the Bank places high emphasis
on ensuring courteous interaction with every customer.
The Banks customer account has been significantly

increasing each year and therefore, considering our


customers unique needs, the Bank launched Monarch
Priority Banking Service which is a testimony to our
ongoing pursuit of delivering superior service. In
addition to our wide range of payment services, this
year the Bank has partnered with one of the largest
payment services of the world JCB. It is significant to
mention that it was the first initiative by any bank in the
South Asian region. In addition, bank has decided to refocus its attention on the Cash Management Services
through its strategically located branches across the
country to broaden its Customer base, be it individual
or large corporate.
Besides, to assess whether we are providing consistent
superior customer services, the Bank undertook
customer satisfaction survey at regular interval and on
various segments. One of the major outcomes of such
research has been encouraging that demonstrates
customers positivity and trusted brand image in
banking with us.

Performance -2014
The Banking industrys profitability is always impacted
by the aggregate output and growth of the economy.
Fifty Six (56) Scheduled banks operating in an economy
where private sector growth is merely 12.7%. The
performance over the years in terms of achieving
sustainable financial results, therefore, can be stated to
be consistent like any yesteryears. Despite the slowness
in every aspect and borrowers inclination of availing
foreign funds and not going beyond contingent UPAS
import portfolio Bank succeeded in declaring double
digit dividend. At the end of the year Banks AdvanceDeposit ratio hovered around 70% as against normal
above 80%+ clearly supporting the statement made
above on lesser demand of credit .
Capital Adequacy at the end of the year stood as usual
impressive 12.71% against the regulatory requirement of
10.00%. Return on Equity (ROE) was 10.08%. & Earnings
Per Share 2.32% suggesting significant improvement
over the performance of last year
The ratio of non-performing loans was slightly
unfavorable considering Prime Bank standard but it can
be assured that its bound to improve as this has been
chalked out as one of the priorities of the bank for the
year 2015.

Business Strategies & Priorities


Its obvious from the statistics that performance ratios
of 2014 are not heartening and requires taking up
measures for improvement. To those end in view, one
of the measures is about re-introducing the concept
of CLUSTER Management System in the right earnest.
The concept provides an opportunity of understanding
challenges ahead through interactive dialogues with
senior management. Its a bottom up approach in setting

31

Annual Report 2014


up budget which includes all key parameters of core risk
management, good profitability and strong asset quality.
The system also strengthens the compliance culture,
transparency and accountability of the Mangers not to
mention the process of grooming future business leaders.
Maintaining adequate liquidity has been always the
strategic priority for better maneuvering and flexibility
in terms of venture and acquiring large business. The
Bank is, therefore, indebted for the prudent decision of
the Shareholders for approving the special resolution in
the last AGM about raising subordinated bond of BDT
2,500 million to add to its already strong capital base.
A long term key strategy to sustain profitability growth
and improved return on equity is to expand the scale
and scope of FEE or TRANSACTION based income
infrastructure for rendering financial services. Using of
innovative approaches and tools under the services of
Alternative Delivery Channel could prove useful as such
bank has decided extra focus and attention this year.
Centralization and Automation are interrelated and bank of
its own realization that widespread technology shall be an
investment to support growth, Bank has been relentlessly
aiming to popularize technology driven product and
services. For the purpose Bank has engaged renowned
Audit & IT firm, KPMG for upgrading the existing core
Banking Software of the bank to have positive impacts on
both the conventional and Islamic businesses.
The recovery of non-performing loans remains as usual
the key and this has been chalked out as one of the
major priorities of the bank for the year 2015.

Corporate Governance
Prime Bank Ltd. is committed to maintaining high
standard of corporate governance. It is fully compliant
with the guidelines of both BSEC and Bangladesh Bank
in the operation of the banking activities. Statutory
Committees like the Executive Committee, Audit
Committee and Risk Management Committee are
fully functional as per laid down guidelines. The Audit
Committee consists of three IDs and is also headed
by an Independent Director and all the subsidiaries of
the Bank have at least one ID on behalf of the holding
Company. Minutes of the Board Meetings of the
subsidiary companies are placed for review of the Board
on regular basis while their financials are also reviewed
by the Audit Committee and the Board.
Codes of Conduct for the Directors are in place and
annual compliance is also recorded. Responsibilities and
authority of the Chairman, CEO, CFO, Head of Internal
Audit & Inspection, Company Secretary and Roles of Audit
Committee are well defined and is meticulous followed.
Maximum disclosure is being ensured enabling the
stakeholders have a fair assessment on the activities
and performance of the Bank. The Bank also engaged

32

multiple rating agencies during the year to ascertain


the functioning and compliance with its own policy
guidelines and regulatory authorities. It also disclosed
Directors key business outside the bank and related
party transactions if any to ensure transparency and
avoid conflicts of interest.
Bank believes in doing an activity not well enough
only but on a sustained basis as well. As such, it paid
due importance to rigorous risk assessment, constant
review of all processes, functioning of risk and control
committees, vigilant compliance and thorough
rechecking of the operational functions by the Audit &
Inspection of the bank on routine basis.

Contribution for the Society


Banking is all about the society. Its the society we do
banking about and its the society to which we belong.
Prime Bank, as such, since its inception has been alert
about its commitment to the Society and with each
passing day, involvement has been increasing. Our
attention is primarily focused on the development of
Education, Health care & Sports which we consider vital
for the growth of the nation.
The bank has been performing its responsibilities from
dual front. On one end, the Bank entertains and responds
to local and national level issues on day to day basis,
while the Prime Bank Foundation undertakes organized
approach taking permanent projects like running of
Schools, Colleges, Eye Camps and holding education
support programs for the meritorious but needy students
round the year. A lot of thoughts and deliberations are
also on for larger projects of significance like setting up
of a Medical College, international standard Auditorium
and a Cricket Academy on its owned premises and all
these appear materializing in the nearest future.
On the business front, Bank has been contributing to the
society by extending credit facilities on softer terms to
the Women Entrepreneur, SME Sector, Education Loan
& Environment friendly projects under Green Banking
Financing Policy of the bank.
All these activities are geared for the unique objective
of giving back to the society for which the banking
activities is all about.

Challenges and Reality


By the time this report reaches the stakeholders, the year
2015 will be well set in. But early symptoms are not very
encouraging for the service sector industry like banks
etc which makes a contribution of about 50 percent
to the GDP as some of the legacy of the past and the
current ones shall persist to impact its growth, such as:

Borrowers having availed the recent rescheduling


facilities as per BB Guidelines to overcome the
difficult time faced due to political turmoil will have
to prove their financial strength.

Industry NPL ratio which was helped down might


re-surface as demand for credit is yet to show signs
of momentum.

RMG export, though stood test of time, is yet to


receive boost as apparent from the impending
decision on GSP and European Unions tilt for a
general consensus among the political parties to
help build a peaceful environment in the country.

Government decision to build mighty Padma Bridge


with own funds may induce heavy borrowings
consequently impacting the liquidity in the market.

Unfavourable Policy changes and stricter


regulations on financial Management may
force banking industry shy away from complex
investments resulting in loss of interest income and
business opportunities.

The cautious restrained monetary policy stance of


the first half of FY2015 will be continued unchanged
in the second half of FY2015, without any new
loosening or tightening. The second half of FY2015
monetary program will seek to limit broad money
(M2) growth at 16.5 %, using controls on Bangladesh
Banks reserve money growth. Private sector
credit will have space for 15.5% growth, a level
substantially higher than the 12.7% November 2014
level. Besides, access to external term financing
and input import financing will remain open for
industrial manufacturers.
Bangladesh Banks supervisory oversight on credit
disbursement and loan recovery disciplines in banks
and financial institutions will intensify; with particular
emphasis on risk management, internal audit and
internal controls, accountability and transparency.
Deposit and lending interest rates of banks and financial
institutions have been coming down in line with decline
in CPI inflation; intermediation spreads between
weighted average deposit and lending interest rates of
banks and financial institutions have come down to 5
percentage points or lower in the state owned banks
and the majority of private sector banks.

Bangladesh Banks attention towards rationalization


of these higher spreads will continue.

Bangladesh Bank resort to setting ceilings on


lending interest rates in two priority areas, i.e. preshipment export credit and agricultural credit. In
the context of general declining trend in interest
rates, in the first half of FY2015 Bangladesh Bank
has revised the lending rate ceiling for agriculture
downward from 13% to 11%. Competitive rate setting
behavior in the market would have made the setting
of such ceilings unnecessary. Bangladesh Bank
will pursue ways of fostering of competitive price
setting, rate setting attitudes and practices in our
financial markets.

Note of optimism

fundamentals on which the bank stands coupled with the


skilled workforce of the bank backed by appropriate policy
guidelines from the Board of Directors, challenges will be
overcome and our march for consolidation shall continue.
The outlook for long-term growth is excellent - our
Banks clients are growing, and they need us as such
the growth will be broad based and global. The financial
needs of countries, companies and individuals will
continue to grow overtime and we will continue to do
what we do best.

Note of appreciation
I had intended to touch upon many more subjects
but as it appears most of those have been attended
in different sections of this Annual Report; I therefore,
restrain myself from duplications.
I am thankful for the continuous support of all wellwishers, shareholders and stakeholders. As tough as
the year was the company was under constant and
intense pressure- I can hardly express the admiration,
even pride, I feel because of the enduring resolve and
resilience demonstrated by the Board of Directors, the
Management and above all the employees. We all owe
them a great deal of gratitude. I would like to extend my
special gratitude to the Central Bank for always providing
guidance, direction and unwavering support. My sincerest
appreciation also goes to the Commercial Auditors of the
bank for being a constant guide al-through.
When I look back at the company with all ups and downs
last year, I remember the quote from the A Tale of Two
Cities: It was the best of times; it was the worst of
times. We came through it scarred but strengthenedsteadfast in our commitment to do the best we can.
Before I conclude, I must inform that the Special
Resolution adopted in the last AGM about issuance of
Prime Bank Subordinated Bond-2 worth BDT 2,500
million has been materialized. We, as such, feel more
confident on the pillar of strong CAPITAL to meet higher
expectation of the stakeholders in the future activities
of the bank.
With the assurance and commitment of taking the bank
to a higher level and improved performance in 2015, I
conclude in anticipation that the next AGM shall bring
more rewards for all.
Warmest regards,

Azam J Chowdhury
Chairman

Despite the challenges & the realities, we have reasons


to draw inspirations from our past and the strong

33

Annual Report 2014

Managing Director &


CEOs Round up

34

The year 2014 proved to be a challenging year for the


banking sector in Bangladesh. Lower demand for credit,
decline in interest spread and commission earning,
rise in non performing loans exerted pressure on the
profitability of the banks. Despite the challenges, Prime
Bank did well in 2014 in terms of net profit and return on
assets. The growth rate of net profit and return on assets
were 30.80 and 26.31 percent respectively. This was
possible due to prudent balance sheet management
and recovery of non performing assets. Prime Bank
focuses on sustainable growth and as such emphasized
on diversification of assets, increasing non-funded
revenue generating services, strengthening internal
control and compliance through the implementing
process of centralization.

Global and Regional Outlook


World Economic Outlook has lowered the global growth
prediction for 2015 from 3.9 percent to 3.8 percent.
Growth projection for both advanced and emerging
economies has been down scaled because of their
slower than expected rate of recovery from the post
crisis stage. However, in a comparative scenario, the
global outlook portrays a slightly encouraging picture
for the world since its output growth is expected to rise
from 3.3 percent in 2014 to 3.8 percent in 2015. The main
contributor to this growth performance is Asia and the
Pacific region. The average growth of the emerging and
developing economies is likely to be 5 percent while both
China and India, the two emerging giants of the globe,
will outperform the 5 percent mark. In 2015, the growth
rate of 7.1 percent that China is likely to experience is the
lowest in its history of 29 years. As Indias growth has
slide down, now Bangladesh is expected to do as good
as India in that performance to earn a growth rate of 6.4
percent. Global economic activity and trade picked up
in the second half of 2013, with world output averaging
a 3.0 percent growth we see a clear shift in economic
power away from advanced economies to emerging
economies. While slide in oil price would affect the
exporting countries, the importing countries would be
greatly benefited by the decline. This would reduce the
budgetary gap of many developing countries including
Bangladesh. As a result positive impact on economic
activities is expected.

Bangladesh Economy
The prospects of the Bangladesh economy over the
near and medium terms are reasonably good. During
last two years Global meltdown and compliance of
RMG sector affected the growth of export sector of our
economy. In addition the economy witnessed political
turmoil for last two years which impacted the overall
growth of the country. In spite of above factors the
growth rate of GDP was 6.15 percent during 2014. Import
of capital machinery showed upward trend during 2nd

quarter of fiscal year 2015 indicating an increase in the


activities in manufacturing sector. The fall in global oil
price is a good news for the country and this is going to
improve subsidy management in energy sector. As such
the GDP growth is expected to pick up between 6.2 to
6.5 percent in FY15. The monetary policy is managed to
keep the inflation below 7 percent and macro-economic
policy support is expected to continue in agriculture
and manufacturing sector. However, the performance
of the economy depends on private investment which
in turn is depended on infrastructure facilities in power
and gas and political stability. Bangladesh managed well
in some of the millennium goal viz Eradicate extreme
poverty & hunger, achieve universal primary education,
eliminate gender disparity in primary and secondary
education, promote gender equality and empower
woman, improve maternal health etc. and policy support
in those areas would continue.

Business Performance
In 2014 we made significant progress in transforming
ourselves to become the compliant bank for regulators
and customers. During 2014 the macroeconomic
environment remained challenging economic
contraction, unemployment and political and regulatory
uncertainty impacted both us and our competitors.
Against these uncertainties we successfully controlled
branch operations while taking steps to de-risk the
business. The Bank continued its growth momentum
despite challenges in the banking sector, and stayed
alongside of industry average growth rates in business
volumes and the underlying streams of revenue. The
profit after tax increased by 30.80 percent and return on
assets by 26.31 percent during 2014. Total assets grew
by 4.53 percent to BDT 254,912 million with investments
showing 27.58 percent growth. Deposits grew by 1.45
percent to BDT 204,838 million during 2014. Prime Bank
contained the rise in NPLs through constant monitoring
and focused recovery efforts, closing the year with an
NPL ratio of 7.61 percent as against an industry average
of 9.69 percent. Interest spread and commission came
under pressure in the wake of a declining interest rate
regime which saw assets being re-priced faster than
the liabilities. However, our Banks cost of deposit has
came down to 7.36 percent (2013: 8.80 percent). Moving
forward, we expect interest rates to be stable in 2015
and provide the impetus for a higher credit growth. As
we head into 2015, many commercial projects that were
not previously deemed financially viable could gain new
life in this more favorable interest rate environment and
non performing situation may improve. Even though
our margins will be leaner, it would be compensated
through growth in volume and improved asset
quality with borrowers finding their credit obligations
more affordable. Remittance growth started gaining
momentum and became positive in the second half
of 2014. The growth in remittance was 10.30 percent
during 2014. However, the export and import business

35

Annual Report 2014


declined during the year as the Bank gave more efforts
on compliance and risk management in financing
in some key areas viz. RMG, commodity trading and
ship breaking. Our aim has always been to focus on
our fundamentals - strengthening the Balance Sheet,
ensuring stability and maintaining a strong liquidity.
Capital adequacy ratios grew from 12.04 percent to 12.71
percent. However, taking into consideration BDT 2,500
million sub ordinate bond raised, the capital adequacy
now stands at 13.87 percent.

FOCUS FOR 2015


Business Model
PBL seeks to satisfy the needs of our customers and
clients by offering a rounded value proposition a full
range of products and services and thereby, we aim
to achieve a smoother income stream and sustainable
returns. PBLs competitive advantage is created by
the scale and diversity of our businesses and the
quality, character and relationships of our people.
Implementation of centralisation processes have
allowed us to take advantage of synergies through the
sharing of ideas and collaboration from cross-functional
working groups. The Bank is noticing shift in customers
preference. They want to carry out their own banking
business through STP (Straight through processing) and
self service channel. This would reduce human cost but
would be implemented after proper risk management
is in place. First time resolution process has been
implemented for priority customers and would remain
as strategic priority during 2015. Expansion of self
service channels and STP would get due attention in the
growth process.
Very strong supervisory oversight on credit
disbursement and loan recovery disciplines will intensify
with particular emphasis on risk management, internal
audit and controls, accountability and transparency.
while firmly discouraging the abetting of habitual, willful
repayment default, the Bank would create room for
helping out recovery of genuine businesses distressed
by circumstances beyond their control with realistic
debt restructuring in line with regulatory guidelines
under consideration.

Capital Adequacy
PBLs regulatory capital as on December 31, 2014 stood
at BDT 27,313 million which 12.71 percent with regard
to risk weighted assets. With a view to ensuring the
implementation of Basel III in a phased manner and
keeping in view raising the quality and level of capital
to ensure absorb losses, we have issued sub ordinate
bond to the tune of BDT 2,500 million which is clearly
depicted in our notes to accounts under post balance
sheet event. With the bonds the capital adequacy would

36

rise to 13.87 percent. The higher capital adequacy will


give us strength to enhance the business further and
remain complied under Basel III also.

Assets and Liability


The Bank would have focused growth in 2015 in order
to have a strong balance sheet and improvement in
key performance indicators. Separate asset growth has
been planned in 2015 giving more emphasis in Small
and Medium Enterprise (SME) and retail businesses.
Since the Bank has established expertise in corporate
sector, we are foreseeing growth in business with
our existing clients. SME would have higher growth
target in order to increase client base and reduce
concentration risk. Retail asset viz mortgage loan,
personal loan and vehicle financing would get
preference and have separate team for marketing and
sale. In order to diversify our asset growth, the new
businesses in corporate sector would be sought for
where concentration is minimal. On the liability side
mobilization of low cost and no cost deposits would
get preference. The cash management of corporate
clients and other private and public enterprises is
being strengthened with adequate manpower and
processes. Various road shows would be taken for
increasing the customer base of low cost deposit.

Information Technology
The banks core banking software Temenos T24, which
is an excellent technology platform fine-tuned to
achieve efficiency in its operations. In order to provide
prompt service to the valued customers efforts were
given on automation, developing procedure and
reducing manual operations. Information technology
of PBL enables sophisticated product development,
better market infrastructure, implementation of reliable
techniques for control of risks and helps the financial
intermediaries to reach geographically distant and
diversified markets. Technological development of
the Bank tremendously increased its customer service
as well as established trust worthiness among the
stakeholder. The security controls are properly applied
to reduce the risks associated with connectivity to
external/internal networks. The implementation of
connectivity with external/internal networks is properly
authorized, authenticated, monitored, encrypted
and managed by IT staffs that are properly trained in
networking technologies. The Bank has taken up the
up gradation project of Temenos which would further
strengthen our processes and give opportunities for
further growth with proper control in place.

Branding & Public Relations


The Prime Bank brand name is now well established
and is synonym with innovation, multiple product

choice, technology driven and customer friendly bank.


The banks phenomenal performance has reflected
not only in its financial results but also with honors
and awards on local and global fronts. It has been
awarded for its published annual report and corporate
governance both by international and local accounting
bodies. The bank retained its image by receiving ICAB
Best Corporate Award. Furthermore, the bank proved
its strict adherence to regulations and disclosure
by winning The Best Presented Annual Reports for
Corporate Governance Disclosure SAFA (South Asian
Federation of Accountants). We have developed annual
comprehensive strategic marketing plan for corporate
branding and product groups which will further
strengthen our brand image among all stakeholders.

Human Resources
Prime Bank always gives the highest focus on the right
placement of human resources. The bank believes in
certain core values as practiced by all employees to meet
the mission and the broader vision of the organization.
We strongly believe human resources are the greatest
assets and recognize them as building blocks of the
banks performance. Recognizing Service Excellence
as the prime differentiator in a market of homogeneous
products and services, we continued to invest in people
to enhance and upgrade their skill sets through various
training programs at home and abroad. To ensure longterm sustainability, PBL is relentlessly pursuing its vision
to transform the human resources into human capital.
Diversely talented, motivated and engaged employees
have always been our key assets.
It is the teamwork that remains the ultimate competitive
advantage, both because it is so powerful and so rare.
If we could get all of us rowing in the same direction
we can dominate the industry against any competition.
We always boosted of our Team spirit and this should
be sustained. The Bank has been maintaining a highly
favorable employer image by creating a performancedriven rewarding work culture; where employees
receive plenty of opportunities to realize their diverse
potentials fully as well as benefit the organization by
demonstrating value creating behaviors. Our Efforts
are focused on the delivery of quality services in all
areas of activities with the aim to add increased value
to shareholders investment and offer highest possible
convenience and benefits to our customers.

sustainable profit growth for the long-term benefits


of our stakeholders, building sustainable customer
relationships and demonstrating that our business
contributes to the environment, social and economic
well-being of the world at large. These activities involved
not only of financial assistance but of also highlighting
our role as highly aware corporate entity contributing
towards community as a whole. The Prime Bank
foundation has taken exemplary strides, which have
proved our mission of making a difference.
There is no denying the fact that the banking activities
directly and indirectly add to carbon foot print.
Considering the direct and indirect impact of carbon
emission and our strong ethical business principles,
we continue to make endeavor to lessen our carbon
footprint by being responsive in different facets of our
Banking activities. Prime Bank issued a general guideline
to facilitate the green banking objectives of the bank.
The office guide is a primary document to be used
by all employee concern and must be exercised with
maximum effort to accelerate green banking.
In addition, PBL has established a separate cell called
Green Financing Cell for financing under refinance
scheme of Bangladesh Bank to set up of Effluent
Treatment Plant (ETP), Bio-gas Plant, Solar Energy (i.e.
Solar panel, Solar home System, Solar mini Grid, Solar
irrigation pumping system, Solar PV Assembly plant),
Water Electricity Plant, PET bottle reprocessing plant,
Hybrid Hoffman Kiln (HHK) etc. The Green Banking Cell
(GBC) have been formed with the task of developing
policies, products, planning, reporting to management
and Bangladesh Bank and overseeing the overall green
financing activities of the bank.

Conclusion
In summary, 2015 will be a challenging year yet our
firm commitment towards excellence with outstanding
operational efficiency will make the bank stronger,
set examples for others to follow and create positive
differences. Sustainable business growth, dynamic
and talented human capital driven by values, better
risk management, and involvement of mid-level
management in decision-making process will surely
command some key strength for Prime Bank. We believe
that, as long as we adhere to the right development
strategy, take pro-active actions and forge ahead
determinedly, the year will be full of hopes and harvests.

Corporate Social Responsibility


As per corporate responsibility, Prime Bank was focused
on following specific key areas namely, nation building,
and enhancement of market place, promotion of the
work place, support to the community and protection
of environment. The bank has been delivering

Ahmed Kamal Khan Chowdhury


Managing Director & CEO

37

Annual Report 2014

Directors
Report
The Board of Directors of Prime Bank Limited has the
pleasure of presenting the 20th Annual Report and
Audited Financial Statements for the year 2014 together
with the Report of the Auditors to the shareholders.
A brief overview of the world market trend with
the performance of Bangladesh Economy has also
been provided in this Report. A review of this report
would reveal continuous growth of the bank in a stiff
competitive environment.

Global Economy
Global growth in 2014 was lower than initially expected,
continuing a pattern of disappointing outturns over the
past several years. Growth picked up only marginally in
2014, to 2.6 percent, from 2.5 percent in 2013. Beneath
these headline numbers, increasingly divergent trends
are at work in major economies.
While activity in the United States and the United
Kingdom has gathered momentum as labor markets
heal and monetary policy remains extremely
accommodative, the recovery has been sputtering in
the Euro Area and Japan as legacies of the financial
crisis linger, intertwined with structural bottlenecks.
China, meanwhile, is undergoing a carefully managed
slowdown. Disappointing growth in other developing
countries in 2014 reflected weak external demand, but
also domestic policy tightening, political uncertainties
and supply-side constraints.
Several major forces are driving the global outlook: soft
commodity prices; persistently low interest rates but
increasingly divergent monetary policies across major
economies; and weak world trade. In particular, the sharp
decline in oil prices since mid-2014 will support global
activity and help offset some of the headwinds to growth
in oil-importing developing economies. However, it will
dampen growth prospects for oil-exporting countries,
with significant regional repercussions.
Overall, global growth is expected to rise moderately,
to 3.0 percent in 2015, and average about 3.3 percent
through 2017. High-income countries are likely to see
growth of 2.2 percent in 2015-17, up from 1.8 percent in
2014, on the back of gradually recovering labor markets,
ebbing fiscal consolidation, and still-low financing costs.

38

In developing countries, as the domestic headwinds


that held back growth in 2014 ease and the recovery
in high-income countries slowly strengthens, growth
is projected to gradually accelerate, rising from 4.4
percent in 2014 to 4.8 percent in 2015 and 5.4 percent
by 2017. Lower oil prices will contribute to diverging
prospects for oil-exporting and importing countries,
particularly in 2015.

Bangladesh Economy
The prospects of the Bangladesh economy over the near
and medium terms are reasonably good. The strong
domestic demand base, gradually improving investment
climate, decreasing uncertainty and reduced inflation
are expected to lead to better economic performance.
GDP growth is expected to pick up between 6.2 to 6.5
percent in FY15 keeping inflation at a reasonable level
provided that macroeconomic policies must continue to
support sustained expansion in agriculture and industry
together with large investment in infrastructure while
striving to enhance government revenue collection. The
risks of high inflation include global food price volatility,
any shocks to domestic crop production and the knockon impact of upward adjustments in public sector
wages. Fiscal monetary coordination will continue and
the track record of containing Government borrowing
well within budgetary limits is expected to continue. As
such there is no risk of crowding out of private sector
credit flow.
Bangladesh Bank will continue to focus on containing
inflation to its target level of 6.5 percent while providing
sufficient space in its monetary program for lending
to activities which support broad-based investment
and inclusive growth objectives. Bangladesh Bank
is considering to adopt some macro prudential
tools such as counter cyclical capital buffer and
dynamic provisioning to address pro-cyclicality
which would give protection to the banks against a
possible downturn that could result from build up of
systemic risks. Besides, Bangladesh Bank will continue
strengthening financial supervision within the approach
of Integrated Supervision while avoiding regulatory
forbearance. Efforts have been continued to maintain
the countrys external sector stability. Further build up
in foreign exchange reserves in FY15 will continue at

a more moderate pace than FY14. BB will continue to


support a market based exchange rate regime while
seeking to avoid excessive exchange rate volatility.
Although restrictions in major host countries leading
to a reduction in migrant workers outflows resulted in
decline of remittance inflows during FY14, it is expected
that remittances will increase in FY15. Government is
trying to send more people with the help of recruiting
countries. Bangladesh Bank projects a 12 and 15 percent
growth of export earnings and import bills respectively
during FY15. Bangladeshs aspiration to become a middle
income country by 2021 is likely to be possible if there is
good governance in financial and fiscal fronts, political
stability and development of infrastructural facilities.

Performance of PBL
The bank maintained satisfactory growth of asset and
liabilities in spite of all challenges during the year 2014.
Trade finance and other ancillary businesses recorded
considerable growth in spite of all odds and economic
turmoil. The bank further expanded its branch network
and alternate delivery channels. New IT based products
and services were introduced.

Vision, Mission, Corporate Philosophy, Strategic


Priorities and Corporate Conduct
PBLs vision, mission, corporate philosophy, strategic
priorities and corporate conduct are given in the
beginning of the report. In achieving banks vision,
mission and strategic priorities, the highest level of
ethical standards are maintained.

Non Resident customers, PBL opened its first Offshore


Banking unit in 2007 at DEPZ, Savar, a new dimension
in its customer friendly business activities. The bank
opened two more Offshore Banking Units at CEPZ,
Chittagong and Adamjee EPZ, Narayangonj.
It was registered as a Merchant Banker with the
Bangladesh Securities and Exchange Commission,
Bangladesh in 2001 for starting its Investment Banking
and Advisory services. As per directives of Bangladesh
Bank, PBL converted its Merchant Banking and
Investment Division (MBID) into a subsidiary in the name
and style Prime Bank Investment Ltd. in 2010. With
the view of business diversification in mind, the bank
also established another subsidiary company in the
name and style Prime Bank Securities Ltd. to provide
brokerage services in the stock market.
PBL has also expanded its services cross border with a
view to providing banking services globally. It opened
its first fully owned subsidiary- Prime Exchange Co.
Pte Ltd. in Singapore, which started its operation from
July 2006 to offer remittance service to Bangladeshi
Nationals living in Singapore. This is the first ever
fully owned Exchange Company of a Private Sector
Bank of Bangladesh established in Singapore with the
approval of the Bangladesh Bank and the Monetary
Authority of Singapore.

Brief History of PBL

With permission from Bangladesh Bank and registration


of Financial Services Authority, UK, another fully owned
subsidiary of PBL, Prime Exchange (UK) Limited, started its
operation from August 2010 in the UK along with its three
branches in London, Birmingham and Manchester. The
company is engaged in remittance business.

PBL started its journey in the year 1995 with the firm
commitment of excellence in customer service with
a difference. Its vision remained to be the best private
commercial bank in Bangladesh in terms of efficiency,
capital adequacy, asset quality, profitability along with
strong liquidity.

PBL Finance (Hong Kong) Limited, a fully owned subsidiary


of PBL started its operation in September 2011. The main
functions of the subsidiary are to advise, negotiate,
confirm and provide discounting facilities against LCs
originating from PBL and other banks in Bangladesh. The
company also handles remittance business.

PBL formally launched its business in April 1995 with one


branch at Motijheel Commercial Area, Dhaka. It started
its Islamic banking operations in December of the same
year. It was listed with both the bourses of Bangladesh viz.
Chittagong Stock Exchange and Dhaka Stock Exchange in
1999 and 2000 through initial public offering.

At present, the bank has been working with 140


branches including 18 SME branches. The introduction
and expansion of ATM network, Internet Banking, SMS
Banking, Phone Banking, Mobile Banking, Biometric
Smart Card and KIOSK ushered a new era and PBL is
now well poised towards sustainable development.

PBL became a primary dealer for buying and selling


securities under the license issued by Bangladesh
Bank in 2003.

Principal Activities

With the aim to offer innovative banking service to the

The principal activities of the bank are banking and


related businesses. The banking businesses include
deposits taking, cash withdrawal, extending credit to

39

Annual Report 2014


corporate organizations, organizing syndication deals,
retail and SME financing, trade financing, project
financing, lease and hire purchase financing, credit
cards, remittance services etc. The mode of banking
includes conventional and Islamic banking. The services
are provided through both traditional and modern IT
based products. The bank performs investment banking
and advisory services through Prime Bank Investment
Limited and brokerage services through Prime Bank
Securities Limited. Banks subsidiaries at Singapore
and UK are engaged in providing remittances faculties
to expatriate Bangladeshis. PBL Finance (Hong Kong)
Limited advises, negotiates, confirms and provides
discounting facilities against LCs originating from
PBL and other banks in Bangladesh. The company
also handles remittance business. 3 (three) Off-shore
Banking Units offers banking services involving foreign
currency denominated assets and liabilities.

Review of Operations, Products and Services


of PBL
Review of operations along with products and services
of the bank has been given in Management Discussion
and Analysis, and other chapters in this report.

Offshore Banking
PBL has been offering Offshore Banking facilities
through 3 (three) Offshore Banking Units (OBU)
located in Dhaka Export Processing Zone (DEPZ),
Chittagong Export Processing Zone (CEPZ) and
Adamjee Export Processing Zone (AEPZ). The total
loans and advances of three OBUs reached to USD
110.74 million equivalent to Tk. 8,632 million as on
December 31, 2014 compared to USD 77.81 million
equivalent to Tk. 6,050 million as on December 31,
2013 recording a growth of 43 percent. During the
year 2014, OBUs made operating profit of USD 1.71
million equivalents to Tk. 132.84 million as against
USD 1.43 million equivalents to Tk. 132.34 million in
2013 with a positive growth of 18 percent.

Prime Bank Investment Limited


PBL was registered as Merchant Banker with the
Bangladesh Securities and Exchange Commission,
Bangladesh in 2001 for starting its Investment Banking
and Advisory services. As per directives of the
Bangladesh Bank, PBL converted its Merchant Banking
and Investment Division (MBID) into a subsidiary in the
name and style Prime Bank Investment Ltd. in 2010.
During the year 2014, the company made operating
profit of Tk. 18.79 million as against Tk. 168.52 million
in 2013.

40

Prime Bank Securities Limited


Prime Bank Securities Ltd. was established to provide
brokerage services in the stock market. During the year
2014, the company made operating loss of Tk. 28.23
million as against profit of Tk. 26.18 million in 2013.

Prime Exchange Co. Pte. Ltd., Singapore


The company operates with two branches in Desker
Road and Jurong East complying with the regulations
of both Bangladesh Bank and Monetary Authority of
Singapore (MAS). Growth in business of the company
was possible due to marketing efforts, personalized
service, efficient service platform under RemitFast
software and enhanced distribution network. The
company significantly expanded business in 2014. Total
volume of remittance was SGD 102.60 million in 2014
compared to SGD 89.80 million in 2013, showing growth
of 14.27 percent. The company made profit before tax of
SGD 276,036in 2014 compared to SGD 99,795 in 2013.

PBL Exchange (UK) Limited


The company has been operating with three branches
in London, Birmingham and Manchester. The business
volume has marked growth despite stiff competition.
The volume of remittance was GBP 22.38 million in 2014
which was 5.89 percent lower than GBP 23.78 million
in 2013. The company incurred operating loss of GBP
15,303 in 2014 compared to operating loss of GBP 33,697
in 2013. The subsidiary has taken some pragmatic steps
for further acceleration of business growth.

PBL Finance (Hong Kong) Limited


Total assets of the company reached to HKD 231.08
million as on December 31, 2014 compared to HKD
243.83 million on December 31, 2013. The company
made a net profit after tax of HKD 5.50 million in
2014 compared to HKD 5.04 million in 2013. The main
functions of the subsidiary are to advise, negotiate,
confirm and provide discounting facilities against LCs
originating from PBL and other Bangladeshi Banks. The
company also handles remittance business.

Risk Management
PBL has always been in the forefront of implementing
different risk management tools and techniques. The
Risk of any banking institution may be defined as the
possibility of incurring losses, financial or otherwise.
Banking business is in fact a business of risk taking. So
it is vital to manage all these risks efficiently. In todays
challenging financial and economic environment
effective risk management is must for sustainable

growth in shareholders value. In banking arena, key risks


include credit, market, operational, liquidity, reputation
risk and other risks like strategic risk, concentration
risk, compliance risk etc. The risk management
strategy is based on a clear understanding of various
risks, disciplined risk assessment and measurement
procedures and continuous monitoring.

Capital Management
Capital management of the bank is based on the
objective to maintain an adequate capital base to support
the projected business and regulatory requirement. This
is done by drawing an annual planned business growth
vis--vis capital requirement. PBL recognizes the impact
of shareholders returns on the level of equity and seeks
to maintain a prudent balance between Tier-I and Tier-II
capital. As per directives of Bangladesh Bank, the banks
are required to maintain capital at 10.00 percent of riskweighted assets under Basel-II. Tier-I capital should be
minimum 5 percent of total capital.
The banks capital fund is divided into two parts- Tier-I and
Tier-II capital. Tier-I includes the equity (paid-up capital,
share premium, statutory reserve and retained earnings)
and Tier-II includes general provision on unclassified
loans and advances, revaluation reserves, unsecured
subordinated debt and exchange equalization account.
Total consolidated capital fund of the bank increased by
Tk. 611.73 million and stood at Tk. 27,424 million during
2014. Tier-I capital grew by Tk. 903.68 million and stood
at Tk. 22,611 million during the year under review. Total
consolidated capital fund is equivalent to 12.68 percent
of total risk weighted assets. More details regarding
capital management are given in the Market DisciplineDisclosures on Risk Based Capital (Basel-II) chapter of
this Annual Report.

Human Resources
PBL is working with a vision of converting human
resources into human capital through appropriate
knowledge, skills, abilities and personal attribution. A
healthy environment has been created where employees
enjoy working with pride. Believing that the human
resources are main elements behind the success and
future sustainability of the bank, the bank is developing
and motivating the workforce with contemporary
HR policies and attractive benefits. The bank is not
only offering a job but also learning, challenging and
rewarding career.

Corporate Sustainability
In respect of corporate sustainability, PBL has focused
on following specific key areas namely, nation building,
enhancement of market place, promotion of the work

place, support to the community and protection of


environment. PBL established Prime Bank Foundation
and contributes equal to 4 percent of net profit before tax
(Tk. 131.20 million in 2014) as donation to this foundation
for undertaking projects in health and education sector.
Details of activities of the foundation are given in Prime
Bank Foundation chapter in this report). Apart from the
CSR activities taken by Prime Bank Foundation, the bank
conducted various CSR activities during the year 2014,
details of which are given in Corporate Sustainability
and Green Banking chapters of this Annual Report.

Corporate Governance
The bank adheres strictly to the regulatory guidelines
on corporate governance. Disclosures on corporate
governance are provided in the Corporate Governance
chapter of this Annual Report.

Financial Analysis
Total Assets
Consolidated assets of the bank stood at Tk. 256,349.33
million in 2014 as against Tk. 245,507.03 million in 2013.
Total assets of PBL stood at Tk. 254,912.20 million in
2014 from Tk. 243,868.80 million in 2013 registering a
growth of 4.53 percent. The increase in assets of PBL
was mainly driven by growth of customer deposits.
The growth of deposits was used for funding growth in
credit and holding of securities for SLR purpose and as
a primary dealer. The economy witnessed a satisfactory
growth scenario in credit and deposits mobilization.

Growth of Balance Sheet Items


Particulars

Assets

Outstanding Taka in Million


2014

2013

Growth of
PBL
%

254,912

243,869

4.53

Deposits

204,838

201,907

1.45

Loans &
Advances

147,367

153,589

(4.05)

Cash and Balance with Bangladesh Bank & its


Agent
Consolidated position of the bank is Tk. 17,560 million in
2014 as against Tk. 17,665 million in 2013. PBLs position
decreased from Tk. 17,535 million in 2014 to Tk. 17,643
million in 2013 depicting a negative growth of 0.61
percent. The growth in deposits increased the Cash
Reserve Requirement of the Bank which is maintained
with Bangladesh Bank and its agent

41

Annual Report 2014

Balance with other banks and financial


institutions

Liabilities

Consolidated position of the bank is Tk. 1,604 million in


2014 as against Tk. 1,080 million in 2013. PBLs position
increased from Tk. 1,513 million in 2014 to Tk. 870
million in 2013.

Investment
PBLs investment increased during the year by Tk.
15,702 million and stood at Tk. 72,642 million as at 31
December 2014. The bank purchased government
treasury bills to cover the increased SLR requirement.
In addition, as a primary dealer PBL had to buy
government treasury bills which were devolved by
Bangladesh Bank.

Loans and Advances / Investments


Consolidated loans and advances/investments
(credit under Islamic Shariah) of the bank stood at
Tk. 152,719 million in 2014. Loans and advances of
PBL was Tk. 147,367 million during 2014. Investment
of Islamic banking branches was Tk. 10,902 million
and with negative growth of 13.56 percent during
2014. Outstanding loans and advances of off-shore
banking units was Tk. 8,632 million showing a growth
of 42.68 percent. Yield on loans and advances of PBL
decreased to 12.09 percent from the level of 13.85
percent of previous year due to increase of lending
rates. Concentration of loans and advances was well
managed and details of credit are given at notes to
accounts no 7(a).4. Ratio of non performing loan of PBL
was 7.61 percent which was much below the industry
average of 9.69 percent.

Deposits Mix of PBL


Types of Deposits

Borrowings from other banks, financial


institutions and agents
The borrowing of PBL stood at Tk. 7,669 million
which represents PBLs borrowing against PBL Bond,
borrowings from other banks and institutions, repo
of treasury bills and refinance against SME loan from
Bangladesh Bank. The borrowed amount was mainly
used for purchasing Treasury Bills/Bonds which were
devolved on the bank in excess of SLR requirement.

Deposits
The deposits of PBL grew by 1.45 percent in 2014.
Customer deposits of the bank grew by 1.45 percent.
The growth was supported by branch network and high
standard service provided to customers along with
liability campaign carried out by retail liability team for
mobilization of no cost and low cost deposits. Fixed
deposits remained the main component of deposits
contributing 42.90 percent of the total deposits. Interest
cost of deposit increased to 7.36 percent as against 8.80
percent of the previous year as a result of increase in
rates of high cost term deposits fuelled by the liquidity
position in the market. Scheme deposits decreased by
1.90 percent over the previous year. The clientele group
of the Bank was individuals, corporation, NGO, NBFI,
government bodies etc.

Outstanding
Taka in million

Growth over
%

Mix (%)

2014

2013

2014

2013

28,490

27,407

3.95%

13.91

13.57

2,943

2,081

41.42%

1.44

1.03

Savings

25,106

21,126

18.84%

12.26

10.46

Special Notice Deposits

14,013

15,097

-7.18%

6.84

7.48

Current & Contingent


Bills Payable

FDR
Scheme Deposits
Total Deposits

87,881

90,251

-2.63%

42.90

44.70

46,405

45,945

1.00%

22.65

22.76

204,838

201,907

1.45%

100.00

100.00

Shareholders Equity
Consolidated shareholders equity increased by 5.24
percent during the year. PBLs shareholders equity increased
by 6.21 percent during 2014. Paid-up capital of PBL stood

42

Consolidated total liabilities (excluding equity) of the


bank stood at Tk. 231,768 million in 2014 as against Tk.
222,149 million in 2013. The total liabilities (excluding
equity) of PBL stood at Tk. 230,451 million in 2014 from
Tk. 220,839 million in 2013 registering a growth of 4.35
percent. The increase in liability was mainly due to
growth in deposits and borrowings.

at Tk. 10,293 million during 2014. The statutory reserve


increased by Tk. 656 million during the year and stood at
Tk. 8,185 million. Distributable profit stood at Tk. 1,791 million
during the year. The strong growth in shareholders equity
will help the bank to expand its business.

Analysis of Income Statement of PBL


Interest Income
PBLs interest income decreased by 16.20 percent during
2014. Interest earned from loan and profit earned on
investment remained the principal component of interest
income. Yield on loans and advances was 12.09 percent
in 2014 as against 13.85 percent in the previous year.

Interest Expense
On the other hand, PBLs interest expense decreased
by 11.91 percent during 2014. Interest cost on deposits
was the main component of interest expenses whereas
interest cost on borrowings also had a significant
impact in 2014. Interest cost of deposits decreased to
7.36 percent in 2014 from 8.80 percent.
BDT in million

Sl No

Particulars

2014

2013

% Change

Interest income

18,446

22,011

-16%

Interest expense

(15,574)

(17,678)

-12%

Net interest income

2,872

4,332

-34%

Investment income

6,194

5,582

11%

Non-interest income

2,840

2,968

-4%

Total operating income

11,906

12,883

-8%

Total operating expenses

5,750

5,409

6%

6,157

7,474

-18%

160

654

-76%

2,674

3,330

-20%

Profit before tax and provision

General provision on loans

10

Provision for classified loans

11

General provision on off-balance sheet items

10

-100%

12

Provision for diminution in value of investments

25

-100%

13

Other provisions

52

10

409%

3,280

3,445

-4.80%

887

1,616

-45%

2,393

1,829

31%

14

Net profit before tax

15

Provision for tax including deferred tax

16

Net profit after tax

Net Interest Income


PBLs net interest income decreased by 33.70 percent
during 2014. Net interest income was the main
contributor to operating income, accounting for 24
percent followed by investment income and noninterest income.

Investment Income
PBLs investment income consists of interest / discount
earned on treasury bills / bonds, gain on government
security trading, dividend received on shares and
capital gain from sale of securities of listed companies.
Investment income increased by Tk. 612 million during
the year registering a growth of 11 percent over the
previous year, accounted for 52 percent of the operating
income. Since PBL is a primary dealer, securities were
devolved by the Bangladesh Bank in excess of SLR
requirement. As such interest/discount income became
the main contributor to investment income.

Non-Interest Income
Non-interest income of PBL decreased by 0.75 percent

during the year. Commission and exchange based


income of the bank decreased by 5.68 percent during
the year due to fall in import business and lower spread
between buying and selling rates of foreign currencies.

Total Operating Expense


Total operating expenses of PBL increased by 6.30
percent during the year mainly due to increase in
personnel and other operating expenses. To match
with the growth of SME and retail business and branch
expansion a number of manpower was recruited along
with sales force. PBL also made donation amounting
to Tk. 131.20 million to Prime Bank Foundation to
carry on various CSR activities. PBL also focused on
developing brand image and increased promotional
and advertisement expenses. This strategy added
value to the business. The banks cost income ratio was
48.29 percent in 2014 which slightly increased from
41.98 percent in 2013 due to increased investment in
branch expansion and development of IT infrastructure.
Considering the factors stated above, the ratio indicates
the satisfactory operating efficiency of the bank as per
the industry standard.

43

Annual Report 2014


The productivity of the employee continued to grow
which is evident from the following ratio:
BDT in million
Particulars

2014

2013

Income per employee

4.15

4.75

Expense per employee

2.01

1.99

Profit before provision per


employee

2.17

2.76

Profit before tax per


employee

1.14

1.27

Assets per employee

88.91

89.99

Provision for Classified Loans


The provision against classified loans increased
during the year due to change in loan classification
and provisioning policy by the Bangladesh Bank. Total
provision against classified loan was Tk. 2,674 million
during 2014 as against Tk. 3,330 million of previous year.
Provision adequacy ratio was 107 percent.
Particular

2014

2013

NPL ratio

7.61

5.09

Industry average
of NPL ratio

9.69

12

100.38%

100.19%

Provision adequacy

General Provision
Adequate provision has been made against unclassified
loans and advances and off-balance sheet exposures as
per regulatory guideline. Provision against unclassified
loans of off-Shore banking units was made Tk. 160 million
during the year. This is to be noted that general provision
is regarded as Tier-II capital of the bank and provides
safeguard against future default as well as supports
business growth by strengthening the capital base.

Other Provisions
Upon assessing the recovery prospects, the bank made
full provision against protested bills and claims amounting
to Tk. 6.5 million, delinquent asset for Tk. 76 million and
impairment loss on investment equity for Tk. 45 million
originated during the course of banking operations.

Net Profit before Tax


After making above provisions, net profit before tax of
PBL stood at Tk. 3,280 million registering a negative

44

growth of 4.80 percent due to higher provision


requirement due mainly change in loan provisioning
policy by the Bangladesh Bank

Provision for Income Tax


Provision against current year income tax of PBL
was Tk. 1,180 million compared to Tk. 1,616 million of
preceding year.

Net Profit after Tax


Net profit after tax stood at Tk. 2,393 million registering a
positive growth of 30.80 percent during 2014. Earnings
per share increased to Tk. 2.32 as at December 31, 2014
from Tk. 1.78 in the previous year. Average ROA and ROE
stood at 0.96 percent and 10.08 percent respectively.

Statutory Reserve
As per Bank Company Act 1991, 20 percent of profit
before tax is required to be transferred to statutory
reserve. As such an amount of Tk. 656 million has been
transferred to statutory reserve.

Dividends
Thus fund available for distribution is Tk. 1,791 million (Tk.
1,737 million from current year profit plus Tk. 54 million
from retained earnings of previous year). In order to
maintain a satisfactory capital adequacy ratio of the
bank, the Board decided to recommend 15 percent cash
dividend for the year 2014. Satisfactory capital fund will
enable the bank to increase business activities.

Remuneration of Directors
The Bank does not pay any remuneration to its Directors.
As per the BRPD circular no. 09 dated 19/09/1996 that
the Chairman may be provided car, telephone, Office
chamber and private secretary. In addition to above,
Directors are entitled to fees and other benefits for
attending the Board, Executive Committee, Audit
Committee and Shariah supervisory committee meeting.
Managing Director is paid salaries and allowances as per
approval of the Board and Bangladesh Bank.

Adequate Accounting Records


The directors responsibilities also include maintaining
adequate accounting records and an effective system
of risk management as well as preparation of the
supplementary schedules included in these Financial
Statements. The directors have made an assessment of
the Banks ability to continue as a going concern and
have no reason to believe that the business will not be a
going concern in the year ahead.

Accounting Policy and Implementation of


BAS/BFRS
Board of Directors are responsible for the preparation
and fair presentation of the Bank Annual Financial
Statements, comprising the statements of financial
position at 31 December 2014, and the statements of
comprehensive income, changes in equity and cash flow
for the year then ended, and the notes to the Financial
Statements, which include a summary of significant
accounting policies and other explanatory notes, and
the Directors report, in accordance with Bangladesh
Financial Reporting Standards (BFRS) and in the manner
required by the Companies Act, 1994.
The directors responsibilities include: designing,
implementing and maintaining internal control relevant
to the preparation and fair presentation of these Financial
Statements that are free from material misstatement,
whether due to fraud and error; selecting and applying
appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.

Internal Control System


Board of directors have the responsibility for approving
reviewing the overall business strategies and significant
policies of the bank; understanding the major risks run
by the bank, setting acceptable levels for these risks
and ensuring that senior management takes steps
necessary to identify, measure, monitor and control
these risks; Senior management have the responsibility
for implementing strategies and policies approved
by the board; developing processes that identify,
measure, monitor and control risks incurred by the
bank; maintaining an organizational structure that
clearly assigns responsibility, authority and reporting
relationships; ensuring that delegated responsibilities
are effectively carried out; setting appropriate internal
control policies; and monitoring the adequacy and
effectiveness of the internal control system. An effective
internal control system also requires that an appropriate
control structure is set up, with control activities defined
at every business level. These include: top level reviews;
appropriate activity controls for different departments
or divisions; physical controls; checking for compliance
with exposure limits and follow-up on non-compliance;
a system of approvals and authorizations; and a system
of verification and reconciliation.

Chartered Accountants of Bangladesh and applicable


provisions of the Companies Act, 1994. Management
accepts responsibility for the integrity and objectively
of these financial statements, as well as for various
estimates and judgments used therein. The estimates
and judgments relating to the financial statements
have been made on a prudent and reasonable basis, in
order that the financial statements reflect the financial
operations of the Bank in a true and fair manner.

Going Concern
Going concern is one the fundamental assumptions in
accounting on the basis of which financial statements
are prepared. Financial statements are prepared
assuming that a business entity will continue to operate
in the foreseeable future without the need or intention
on the part of management to liquidate the entity or to
significantly curtail its operational activities. Therefore, it
is assumed that the entity will realize its assets and settle
its obligations in the normal course of the business. It
is the responsibility of the management of a company
to determine whether the going concern assumption is
appropriate in the preparation of financial statements.
If the going concern assumption is considered by the
management to be invalid, the financial statements
of the entity would need to be prepared on break up
basis. This means that assets will be recognized at
amount which is expected to be realized from its sale
(net of selling costs) rather than from its continuing
use in the ordinary course of the business. Assets are
valued for their individual worth rather than their value
as a combined unit. Liabilities shall be recognized at
amounts that are likely to be settled.
No indication of possible problems of going concern:
Deteriorating liquidity position of the bank not
backed by sufficient financing arrangements.

High financial risk arising from increased gearing


level rendering the bank vulnerable to delays in
payment of interest and loan principle.

Significant trading losses being incurred for several


years.

Profitability of the bank is essential for its survival in


the long term.

Aggressive growth strategy not backed by sufficient


finance which ultimately leads to over trading.

Increasing level of short term borrowing and


overdraft not supported by increase in business.

Standards of Reporting

Inability of the bank to maintain liquidity ratios as


defined in the loan covenants.

The financial statements have been prepared in


accordance with Bangladesh Financial Reporting
Standards (BFRS) as adopted by The Institute of

Serious litigations faced by the bank which does


not have the financial strength to pay the possible
settlement.

Inability of the bank to develop a new range of


commercially successful products

45

Annual Report 2014

Control Environment

Annual General Meeting

Control activities are the policies and procedures which


help ensure that management directives are carried
out, and the necessary actions are taken to minimize
the risks of failure to meet stated objectives. Policies
and procedures are effectively established within the
Bank and are continuously reviewed for compliance,
adequacy and improvement opportunities.

Annual General Meeting will be held on 30th March


2015 at KIB Complex, Krishe Khemar Sarak at 11.00 a.m.
The Directors Report and financial statements were
approved at 430th Board Meeting held on 26 February,
2015 for presentation to the shareholders.

The Board of Directors sets the tone for an effective


control environment through regular reviews of the
processes for identifying, evaluating, and managing
significant risks. The Standard Operating Procedures
(SOP) are signed off by each Head of Department
to provide assurance that these standards are
communicated, understood and complied with. An
effective Control environment is set by top management
and cascades across all business functions. Every year
the top team conducts a self-assessment of key controls
that affect the business and develops up action plans to
make the internal control environment more robust

We have been systematically implementing our


Strategic Priorities and Action Plan since 2012.
Continuous centralization of business process, changes
to our corporate culture, leadership and structures, and
a stronger performance orientation are the pillars of our
program. Our clear objective is to become a profitable
and sustainable bank. We want to be best in class in
terms of growth, earning power and capital efficiency.
We still have a long way to go, but I am convinced that
we will make good progress in 2015, further improve our
operating earning power and free cash flow, and reduce
our net financial debt.

Supplier Payment Policy

We, the board members attach great priority to


achieving the earning power that will make it possible to
distribute a dependable dividend to our shareholders.
All our employees are working hard to ensure we can
pay attractive dividends every year.

PBL developed and implemented a set of payment


polices for all suppliers. We explain the payment
method and system and review the process with the
vendor before issuing a purchase order. Bills are paid
according to the payment terms and VAT and other
withholding taxes are deducted from bills as per law. As
of date there is no legal case filed by the Bank or filed
against the Bank by any supplier.

Shareholders Value
PBL remains fully committed to delivery of higher
shareholders value. The high profitability track record
underpins the value the shareholders derived from
investing in the shares of PBL. The earnings per share
decreased and stood at Tk. 2.32 and return on equity
stood at Tk. 10.08 during 2014. Market capitalization stood
at Tk. 20,175 million as at December 2014 holding the 20th
position among the listed companies and 4th position
among the listed banks in the Dhaka Stock Exchange.

Meeting of the Board

Note of Appreciation

The progress we made in the past year confirms that


with our strategies are on the right track to a successful
future. We have more than 2,850 employees around the
country working with great commitment and expertise
to achieve this bank a successful one.
My special thanks to the Regulators, especially
Bangladesh
Bank
for
their
guidance
and
recommendations without which the Bank might not
have attained a steady growth. I would also like to
give thanks to our customers, depositors, auditors,
employees for their support and cooperation.
Many thanks and best regards for your trust and
confidence on us.

On behalf of of the Board of Directors

During the year 2014, 17 Board Meetings were held.

Appointment of Auditors
M/S ACNABIN and Syful Shamsul Alam & Co. Chartered
Accountants were appointed for the year 2014 and will
be completing their terms in the AGM. However, they
are eligible for reappointment for next one year.

46

Chairman

Report on the Activities of


Audit Committee
Among the three statutory Committees allowed
as per Banking Company Act to assist the Board in
running the affairs of Banking business, the Audit
Committee happens to be most pivotal and for which
Independent guidelines with regard to its constitution
and functioning has been laid down by the regulators
such as Bangladesh Bank & BSEC. Both the Regulators,
however, focus on the common and prime objective of
fulfilling oversight responsibilities and relevant check &
balance functions on behalf of the Board.
Pursuant to the laid down guidelines, the Audit
Committee has been discharging its responsibilities by
reviewing the financial reporting process, the system of
internal control and management of financial risks, the
audit process, and the banks process for monitoring
compliance with laws and regulations and its own code
of business conduct.
The Committee also reports its activities to the Board of
Directors on a periodical basis and passes independent
opinion on the financial statements based on the
findings of Audit & Inspections Teams which included
both internal & external ones.

Formation & Members of the Committee


The Board of Prime Bank has been very meticulous in
the formation of the Current Audit Committee which
constitutes of 05 (five) members and majority members
belonging to the Independent Category despite the
requirement of lesser number as per BSEC guidelines.
As directed, Members of the Committee are excluded
from being a member of the Executive Committee and
the Company Secretary discharges the function of the
Secretary to the Committee.
Current Audit Committee was formed with the following
members as per decision of the 418th Board Meeting
held on 12/05/2014 in compliance with the BRPD Circular
No. 11 dated October 27, 2013 issued by Bangladesh Bank
and Bangladesh Securities and Exchange Commission
(BSEC)
notification
SEC/CMRRCD/2006-158/134/
admin/44 dated August 07, 2012:

Name

Designation in
the committee

Prof. Ainun Nishat

Chairman

Mr. M. A. Khaleque

Member

Director

Member

Director

Member

Independent
Director

Member

Independent
Director

Mr. Khandker
Mohammad
Khaled
Prof. Dr.
Mohammad Aslam
Bhuiyan
Mr. Manzur
Murshed

Status in the
Board
Independent
Director

All the members are financially literate and have


accounting or related financial management experience.

Activities of the Committee


In line with the new organogram designed the previous
year, the Committee successfully carried out its
activities as per Audit Plan-2014 to attain the objectives
of oversight and other relevant responsibilities, with
the assistance of the Internal Control & Compliance
teams that worked independently of Management and
in compliance with the directives of Bangladesh Bank
& BSEC.
In all, 10 (ten) meetings were held during the year where
all the investigation reports in the form of agenda were
presented for perusal and decision. The Committee
made in-depth study of those memorandums and
communicated its decision for required actions leading
to removal of objection and regularization as appropriate.
The committee also followed up the issues by seeking
latest compliance reports to ensure its decisions were
duly attended and numbers of lapses are finally reduced
to zero. The Committee also drew attention of the
concerned where necessary and also forwarded reports
to the regular Board Meetings about issues of concern for
further guidance.
In discharging its due responsibilities, the Committee
endeavored to bring about qualitative improvement in
the approach of auditing with the prime objective of
establishing a corporate & compliance culture in the
operation of banking. The concentration, as such, was,

47

Annual Report 2014


all-through on the following fundamentals which also
happen to be the base of Auditing functions:

Internal Control
Financial Reporting
Internal Audit
External Audit
Compliance

The Committee also undertook the following:


i) Reviewed & approved the Audit Plan-2014 of
Internal Audit & Inspection Department including IT
Audit.
ii)

Reviewed Management Letter issued by Bangladesh


Bank & other External Auditors and Management
response thereto as part of compliance activities.

iii) Reviewed expressed interest of 17 Audit Firms and


upon scrutinizing, recommended for appointment.
iv) On the Risk Management issues, the committee
directed updating all existing questionnaire/check
list in light of the BCA-2013 to ensure mitigation of
the risks inherent with the banking business.
v) The committee reviewed statements on ICAAP
(Internal Capital Adequacy Assessment Process)
under SRP (Supervisory Review Process) for the year
2012 & 2013 as per guidelines of Bangladesh Bank
and advised maintaining required preparedness for
the periodical dialogue/reviews on the subject with
the Bangladesh Bank.
vi) Conducting inspections of the wholly owned
subsidiaries abroad.
vii) Brought Shariah Audit & inspection Report under
the scrutiny of the committee to maintain uniformity
in the oversight responsibilities as per BCA.

In addition, the Committee made the following


recommendations:
i) Recommended for opening Islamic Desk at all
branches of the bank to respond to customers
popular demand of Shariah based Banking services
across the country.
ii)

Recommended for IT Test Area & Lab facilities to build


up technical expertise through practical exercises.

iii) Directed Management to arrange special training


program to acquaint all the employees about the
range & use of T-24 System for controlling lapses in
banking system T24.
iv) Advised formation of Task force for resolving non
compliance issues upon segregation of the audit
objections nature & merit-wise and setting time
schedule for completion accordingly.
The Committee obtained all the satisfactory information &
explanations to the best of the members knowledge and
necessary for the purposes of auditing. The committee
opines that all the transactions of the Bank which had
come to notice were found complied with the directives
of the regulators. The Committee also expresses its
satisfaction on the external auditors objective, expertise
and resources in performing their due role.
Before concluding, I would like to extend sincerest
thanks to all the members of the Audit Committee for
their time and support to carry forward the challenges
of the committee. I would also like to thank the members
of the Board of Directors for allowing the Committee to
discharge its due function as a self-regulating assistive
committee of the Board.

Prof. Ainun Nishat


Chairman

48

Report of Prime Bank Shariah


Supervisory Committee
Bismillahir Rahmanir Rahim.
All praises are for Allah Subhanahu-wa-taala. He is the
One and Second to none.
Salat and Salam are on Hazrat Muhammad (peace be
upon him) who is the best Prophet and the last messenger
of Allah.
In the year 2014, three meetings of Prime Bank Shariah
Supervisory Committee were held where different
operational issues including those referred to by
the Management of the Bank were perused by the
Committee and necessary guidelines and counseling
were provided thereon. Respected members of the
Committee also addressed IftarMahfils arranged by the
Islamic Banking Division of the Bank and held formal
and informal discussions on Shariah issues that inspired
all concerned for compliance with Shariah principles.
Apart from this, the Muraqibs audited all Islamic
banking branches during the year 2014 and submitted
reports thereon. Based on the reports, some branches
were advised to improve their standard of Shariah
compliance in certain areas.
After reviewing Shariah audit reports, the Prime Bank
Shariah Supervisory Committee opined that awareness
on Shariah compliance has been increased during
the year under report, among the officials related to
investment and also among the investment clients as
compared to the previous year. It has also been observed
from the reports of the Muraquibs that desk level
violations in investment deals have been substantially
decreased. Most of the Shariah violations occur due to
non-availability of Islamic banking software.

Abu Zafar Md. Sheikhul Islam


Member Secretary

Based on the Committee observations, the


Management of the Bank considered installing Islamic
banking software as a special project and has given top
priority to install the software at the earliest. It has also
been observed that Shariah audit conducted by the
Muraqibs resulted in increased commitment on Shariah
compliance among the branch officials.
Besides providing observations and guidelines, the
Shariah Supervisory Committee also recommended the
Management for doing the needful for advancement
of Islamic banking operations at Prime Bank. It was
suggested that training on Shariah principles should
be enhanced and the manpower of Islamic banking
branches of all tiers should be brought under the
process.
The Committee recommended to engage manpower
having sufficient knowledge and to impart training
on Islamic Shariah at all Islamic banking branches
to ensure proper observation of Islamic mode of
finance and banking in investment operation and
the Committee also felt that officials should be more
cautious about Shariah compliance while financing,
especially in buying and selling of goods. Furthermore,
strict supervision of Islamic banking activities based on
Manual/SOP prepared for the purpose was stressed by
the Shariah Supervisory Committee.
May Allah give us Taufique to attain His satisfaction
through implementation of Shariah in every sphere of
life.
Ameen.

Prof. Maolana Mohammad Salahuddin


Chairman

49

Annual Report 2014

CEO/CFO Declaration
To The Board
30th March, 2015

Board of Directors
Prime Bank Limited
Adamjee Court Annex Building-2
119-120 Motijheel Commercial Area
Dhaka-1000
SUB: CEO/CFO DECLARATION TO THE BOARD
The following is provided to the Board of Directors of Prime Bank Limited in our capacity as the persons responsible
for performing the functions of Managing Director & CEO and Chief Financial Officer of the Bank.
In accordance with the notification of Bangladesh Securities and Exchange Commission No.SEC/
CMRRCD/2006-158/134/ Admin/44 dated 07, August, 2012 we declare that for the financial year ended 31 December,
2014:
i)

We have reviewed the financial statements for the year and that to the best of our
Knowledge and belief:

a) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading;
b) these statements together present a true and fair view of the companys affairs and are in compliance with
existing accounting standards and applicable laws;
ii) There are, to the best of knowledge and belief, no transactions entered into by the Bank during the year which
are fraudulent, illegal or violation of the Banks code of conduct.

Managing Director & CEO

50

Chief Financial Officer (Acting)

C orporate G overnance report

51

Annual Report 2014

Corporate
Governance Report
The Board of Directors is fully committed to
maintaining the highest standards in corporate
governance, professionalism and integrity in driving
Prime Bank to create and deliver long-term sustainable
shareholder value.
In line with the Banks aspirations, the Board has
continued to ensure that the highest standards in
corporate governance are upheld, with a view to
continuously enhancing stakeholder value, increasing
investor confidence, establishing customer trust and
building a competitive organization, whilst at the
same time not losing sight of its stakeholders by
establishing and overseeing requisite governance
policies and processes.

Board of Directors
Policy on appointment of Directors
Prime Bank Limited does not have its own policy on
appointment of Directors. PBL always complies with
the prescription of the regulatory authorities regarding
appointment of directors. Bangladesh Bank circulars,
BSEC notification, Bank Company Act and Company
Act are strictly followed regarding this matter. In order
to be a member of the Board, a Director other than a
nominated and alternate Director must maintain at least
two percent of the outstanding shares of the company.
The Independent Directors are excused from such
requirements.
As per the Companies Act, 1994, non-executive Directors
are subject to retirement. At least one-third of the nonexecutive Directors shall retire by rotation in every AGM.
As per Bangladesh Banks guidelines, a Director may be
assigned for a period of three years and the term may be
prolonged for another three years period. The Managing
Director is elected for a minimum period of three years
subject to the approval of Bangladesh Bank. The office
of the Managing Director is not subject to retirement by
rotation. The term of an Independent Director is three
years and may be lengthened by another tern of three
years.
Composition of the Board of Directors Nonexecutive Directors and Independent Directors
All directors of the Board are non-executive directors

52

including three independent directors appointed by the


Board and approved by the shareholders in the AGM.
Bangladesh Securities Exchange Commission (BSEC)
has also approved their appointment.
Independent Director
As per SEC Circular No. SEC/CMRRCD/2006-158/134/
Admin/44, dated August 07, 2012, the elected directors
of the Board of PBL nominates three independent
directors in the Board of Directors so that the Board
contains core skills considered appropriate in the
framework of the company.
Independent Directors independence
As per the Bank Companies Act (Amended) 2013 at least
3 (three)of the total Directors should be Independent
Directors. In order for a Director to be eligible as
an Independent Director, the Board constructively
establishes that the Director has no substantial
relationship with PBL either as a partner, shareholder
or officer of an organization that has a relationship
with PBL that would prevent that nominee from
becoming an Independent Director. For the purpose
of such determination, the Directors consider that the
Independent Director does not hold any share of the
Company; who is not associated with the Companys
Promoters or Directors or Shareholders who maintains
one percent or more than one percent shares of the
total paid up shares of the Company; on the basis
of family relationship; who does not have any other
relationship, whether monetary or otherwise,with the
company or its subsidiary/associate companies; who is
not a member, Director or officer of any Stock exchange
and who is not a shareholder,Director or officer of any
stock exchange or an intermediary of the capital market.
The Independent Director is engaged for a period of
three years which may be extended by one term only.
A person cannot be appointed as Independent Director
who has already been appointed as an Independent
Director of three listed companies
Chairman and CEO
The positions of the Chairman of the Board of Directors
and CEO are filled by different individuals and this has
been in practice from the inception of PBL. This also
complies with Section 1.4 of the BSECs notification
on Corporate Governance Guidelines. All directors are

financially literate and quite a few of them are from


Financial Management background, which shows that
PBL has an enriched Board of Directors.

3. Mr. M. Farhad Hussain, FCA


A brief on the qualifications and experiences of the
respective Independent Directors are furnished below:

Selection and Appointment of New Directors


In context to the selection and appointment of new
directors, the existing Board of Directors has the
following obligations and duties:

Dr. G. M. Khurshid Alam

1.

M.A.

Economics, Boston University, Boston,

M.A.

Economics, Dhaka University,

B.A.

(Honors) Economics, Dhaka University

Frequently asses the size and structure of the Board


and the mix of knowledge, skills, experience and
perceptions that may be necessary to allow the
Board to perform its functions.

2. Recognize any capabilities not sufficiently


represented and approve the procedure necessary
to be certain that an applicant designated by the
shareholders with those capabilities is nominated
The directors are selected by the shareholders in the
Annual General Meeting. Casual posts, if any, are filled
up by the Board in accordance with the conditions in
the Companies Act and Articles of the Company.
Retirement and Re-election of Directors
As per Companies Act, Bank Companies Act and Articles
of Association of the Company, each year one-third
of the Directors retire from the office and depending
on eligibility, may offer themselves for re-election by
shareholders at the Annual General Meeting. As per
routine procedure following directors will retire at the
20th AGM:
1.
2.
3.
4.
5.
6.

Mr. Nafis Sikder


Mr. Imran Khan
East Coast Shipping Lines Limited
Prof. Ainun Nishat
- Independent Director
Prof. Dr. Md. Aslam Bhuiyan - Independent Director
Mr. Manzur Murshed
- Independent Director

Educational Qualifications:
Ph.D. Economics, Boston University, Boston,

Experience:
Senior Private Sector Specialist, The World Bank.

Private Sector Development and Finance Sector


(PSD&F) Unit, The World Bank

Consultant, Annual Review of the DFID/EU

Consultant, USAID

Present Attachment:
Director (Operations) of Policy Research Institute (PRI)
since 1st January 2014.

Dr. Shamsuddin Ahmad


Educational Qualifications:
Ph.D. (Economic Development) , University of Hawaii,
USA
M.A.

M.B.A. Finance, IBA, Dhaka University,


Experience:
Senior Financial Sector Specialist, South Asia
Finance and Private Sector Development Unit,
The World Bank, Washington DC.

Among the above six Directors, the following three are


eligible for re-election:
1. Mr. Nafis Sikder
2. Mr. Imran Khan
3. East Coast Shipping Lines Limited

Educational Qualifications:
Accountancy Foundation Course, Institute of
Chartered Accountants of England and Wales

1.

2. Dr. Shamsuddin Ahmed

Consultant, Hawaii State Tax System

M. Farhad Hussain FCA

While the rest three, as per BSEC Notification on


Corporate Governance are not eligible for reappointment as they have completed 02 (two) terms
consecutively. As such, the Board of Directors in its
430th Meeting on 26.02.2015 appointed the following
three distinguished personalities as Independent
Directors of the Bank for a term of 03 (three) years
subject to approval of the regulators and the consent of
the shareholders in the 20th AGM:
Dr. G.M. Khurshid Alam

Economics, University of, Hawaii, USA

GEC A Levels

Professional Qualification: FCA


Experience:
World Bank Consultant

RIRA, Consultant

Katalyst, Consultant

Corporate Director, Bengal Group of Companies

Audit Manager, Lawrence & Co, Birmingham, UK

Audit Senior, Calthorpes Chartered Accountants, UK

53

Annual Report 2014


Present Attachment:
Managing Partner, Hussain Farhad & Co.,
Chartered Accountants

The Board duly complies with the guidelines issued


by Bangladesh Bank, BSEC, Bank Company Act
and Company Act regarding the responsibility
and accountability of the Board, its Chairman and
Managing Director.

Council Member, ICAB

Director, Dhaka WASA

Independent Director: Matin Spinning Mills Ltd

Independent Director: Alhaj Textile Mills Ltd

Director: Bay Asset management Ltd.

Role and Responsibilities of the Board


The Prime Bank Board is responsible for the periodic
review and approval of the overall strategies, business
and significant policies of the Bank. The Board also
sets the Banks core values, adopts proper standards
to ensure that the Bank operates with integrity, and
complies with the relevant rules and regulations.
The Boards responsibilities are, but are not limited to:
Reviewing and approving the strategies and
business plans for the Bank

54

Approving the Banks annual budget and


carrying out periodic review of the achievements
by the various operating divisions against their
respective business targets
Prescribing the minimum standards and
establishing policies on the management of
credit risks and other key areas of the Banks
operations

Ensuring that the operating infrastructure,


systems of control, systems for risk identification
and management, financial and operational
controls, are in place and properly implemented

Reviewing the adequacy and integrity of the


Banks internal control systems

Overseeing the conduct and performance of


the Banks businesses

Succession planning, including ensuring all


candidates appointed to senior management
positions are of sufficient calibre and
programmes are in place to provide for the
orderly succession of senior management.

Reviewing succession planning and talent


management plans for the Bank and approving
the appointment and compensation of senior
management staff

Approving changes
organization structure

Approving policies relating to corporate


branding, public relations, investor relations
and shareholder communication programmes

Reviewing the Banks strategies on promotion


of sustainability focusing on environmental
social and governance aspects

in

the

corporate

Code of Conduct for the Board of Directors


The Board of Directors follows a Code of Conduct which
was adopted to provide guidance to directors to carry
out their duties in an honest, responsible and businesslike
manner and within the scope of their authority, as set forth
in the laws of the country as well as in the Memorandum
and Articles of Association of the Company.
The Code of Conduct states:
1.

The Members shall act honestly, in good faith


and in the best interests of the shareholders
and the company.

2. The members shall not make improper use of


information acquired as a director.
3. The members shall not take improper
advantage of the position as a director.
4. The members will be obligated to be independent
in judgment and actions and take all reasonable
steps to be satisfied as to the soundness of
decision taken by the board of directors.
5. Confidential information acquired by the
members in the course of exercise of directorial
duties shall remain the property of the company
and it will be improper to disclose or allow it to
be disclosed, unless that disclosure has been
authorized by the company, or the person from
whom the information has been received.
6. Members shall make every effort to attend all
Board and Committee Meetings during their
tenure. They will not absent themselves without
good reasons or confirming leave of absence.
7.

To maximize effectiveness of the Board/


Committee Meetings, contribution of individual
director shall be monitored and appraised on
an annual basis.

8. Board members having interest of any nature


in the agenda of the meeting, shall declare
beforehand the nature of their interest and
withdraw from the room, unless they have a
dispensation to speak.
9. Training opportunities/orientation/workshops
will be arranged for the members (especially
for the newly inducted members) to make them
acquainted with the international best practices,
their fiduciary obligations, Code of Conduct etc.
10. Members shall always maintain Fit and Proper

Test Criteria, clean CIB status and other


obligations declared by the Primary and other
Regulators.

the Bangladesh Bank through the Board along


with the statement of the CEO.

11. Members shall be judicious about their


entitlement of benefit/privileges as per
Banking Companies Act -1991 and all circulars
issued by Bangladesh Bank and shall be willing
to produce supporting documents, if required.

Besides this, the Chairman may/shall assume any other


responsibility if the Board assigns within the purview of
the Rules, Regulations, Acts and Articles of the Bank.
The Chairmans responsibility is defined by the Board as
directed by BSECs notification on CGG.

12. Members shall comply with Article 23.1 of


the Banks Memorandum and Articles of
Association of the Company while making
Sale-Buy of Companys share and shall refrain
from making such transaction without formal
declaration.

Non-executive Directors independence


All the Directors except the MD are non-executive
Directors in the Board. None of the Directors takes part
in the day to day affairs of the Company. They attend
only in the Board/Committee meetings to discuss the
agenda reserved for the Board/ Committees.

Every Director will assure annually signing a confirmation


that they have gone through, have complied with and
will continue to comply with the set of codes approved
by the Board of Directors.

Policy on training of Board of Directors


Prime Bank is fully committed to maintain highest
standards of Corporate Governance & professionalism
in driving Banks progress on the principles of
transparency and openness. For this purpose, training
at home and abroad especially on the Corporate
Governance is encouraged by the Board. As such,
whenever opportunities arise, bank utilizes the same
to train and orient its members. Recently few Directors
along with the Chairman attended a workshop titled
Revisiting Corporate Governance Regulations for
Banks in Bangladesh organized by Bangladesh Bank in
association with IFC. There are also records of Directors
taking part in Training Courses abroad on Corporate
Governance. A Code of Conduct has also been adopted
by the Board to be followed by its Members and annual
compliance of the Code is ensured. Besides, all relevant
regulations promulgated/circulated time to time by the
concerned authorities are placed to the Board Meeting
on regular basis to keep the members updated.

Directors Remuneration
Directors are not eligible to any remuneration other
than attendance fee for the board and its Committee
Meeting. As per BRPD Circular No. 03, dated January 18,
2010, directors are eligible to the remuneration of BDT
5,000 for each Meeting.
Chairman of the Board
The Chairman of the Board is elected to the office of the
Chairman by the directors. The Board considers that the
Chairman is independent.
Role and Responsibilities of the Chairman
The role and responsibilities of the Chairman are:

As the Chairman of the Board of Directors


(or Chairman of any Committee formed by
the Board of Directors) does not personally
possess the jurisdiction to apply policy making
or executive authority, he shall not participate
in or interfere into the administration or
operational and routine affairs of the bank
The Chairman may conduct on-site inspection
of any branch or financing activities under
the purview of the oversight responsibilities
of the Board. He may call for any information
relating to banks operation or ask for
investigation into any such affairs; he may
submit such information or investigation report
to the meeting of the Board or the Executive
Committee and if deemed necessary, with the
approval of the Board, he shall take necessary
action thereon in accordance with the set rules
through the CEO. However, any complaint
against the CEO shall have to be apprised by

Appraisal of the Boards performance


Prime Bank Limited doesnt have a scheme for annual
appraisal of the boards performance till date, but the
company is abiding by the Code of Conduct which was
formulated by the Board. The Board members have
always taken decisions that have benefited the bank as
a whole and they have always performed their duties
outstandingly. Also, the Board members have always
been appraised at the AGM and shareholders have
always been very supportive of the Boards decisions.
Evaluation of the CEO by the Board
There is a three year (2014-2017) Strategic Priorities
& Action Plan (KPI) for the evaluation of the CEO/
Management on an annual basis and it is revised from
time to time accordingly by the Board.
The CEO is also evaluated on an annual basis and is
also given KPIs for the years ahead. The Board has the

55

Annual Report 2014


capability to evaluate the CEO whenever it wishes so. All
CEOs are evaluated after their term, and on the basis
of their evaluation is appointed for another term if the
Board approves of it.
Knowledge and Expertise in Finance and Accounting
The Board of Directors of Prime Bank Limited comprises
of members who boast a wide diversity of knowledge
and experience in finance, economy, management,
business administration, marketing and law. This is to
ensure that together, they can devise the appropriate
policy for the growth of the bank while having expertise
skills, ability to perceive matters in a bigger perspective
and adequate independence to review the management
in a sensible manner. One of the directors has exquisite
knowledge on finance and has also completed his
article ship in the Chartered Accountancy profession
(CACC). Details about Prime Banks directors can be
found on page 20.
Role and Responsibilities of the CEO
The responsibilities and authorities of the Managing
Director are as follows:
a. In terms of the financial, business and
administrative authorities vested upon him by
the board, the CEO shall discharge his own
responsibilities. He shall remain accountable
for achievement of financial and other
business targets by means of business plans,
efficient implementation thereof and prudent
administrative and financial management.
b. The CEO shall ensure compliance of the Bank
Companies Act, 1991 and/or other relevant
laws and regulations in discharge of routine
functions of the bank.
c. The CEO shall include information on violation
of any law, rules, regulation including Bank
Company Act, 1991 while presenting memos
before the Board or the committee formed by
the board.
d. CEO will provide all sorts of information to
Bangladesh Bank about the violation of Banking
Companies Act, 1991 and/ or any violation of
Laws, rules and regulations.
e. The recruitment and promotion of all staff of
the bank except those in the two tiers below
him shall rest on the CEO. He shall act in such
cases in accordance with the approved service
rules on the basis of the human resources
policy and sanctioned strength of employees
as approved by the board. The board or the
chairman of any committee of the board or any
director shall not get involved or interfere into
such affairs.

56

f.

The authority relating to transfer and


disciplinary measures against the staff, except
those in the two tier below the CEO, shall rest
on him, which he shall apply in accordance
with the approved service rules. Besides, under
the purview of the human resources policy
as approved by the board, he shall nominate
officers for training

Besides, the Managing Director shall assume any other


responsibility if the Board assigns within the purview of
the Rules, Regulations, Acts and Articles of the Bank.
Board Meetings
The Board meets as required to discuss business
strategy, financial performance, matters pertaining to
compliance and governance as well as reports on matters
deliberated by the respective committees. The Board
reviews, amongst others, the financial performance
of the Bank and subsidiaries, risk management and
compliance reports and approve the quarterly results
of the Bank at its meeting. The meetings of the Board
are scheduled in advance for the Directors to plan their
schedules. In addition, Special Board meetings are held
when necessary, to deliberate on major transactions
and ad-hoc matters that require the Boards urgent
attention and decisions. A Board meeting is held at the
beginning of the year to discuss the Banks Business
plan and Budget.
Meeting papers on the proposals and reports are
delivered to the Directors prior to the meetings,
giving them sufficient time to evaluate the proposals
and if necessary, request additional information. This
enables the Board to function and discharge their
responsibilities effectively. The minimum information
required for the Board to make an informed and
effective decision includes background, objective, key
issues, rationale, financial and non-financial impact
of the proposal. Directors who are unable to attend
a meeting due to unavoidable circumstances are
encouraged to provide feedback to the Chairman on
matters to be deliberated for their views to be given
due consideration at the meetings.
Role of the Company Secretary
Company Secretary is responsible for advising the
Board on issues relating to corporate compliance with
the relevant laws, rules, procedures and regulations
affecting the Board and the Bank, as well as best
practices of governance. He is also responsible for
advising the Directors of their obligations and duties
to disclose their interest in securities, disclosure of any
conflict of interest in a transaction involving the Bank,
prohibition on dealing in securities and restrictions on
disclosure of price-sensitive information.

The responsibilities of the Company Secretary


comprises of:
i.

Ensuring the compliance of the Bank in relation


to financial and legal practices, as well as issues
of corporate governance. He acts as a point of
communication between the management,
board of directors, company shareholders,
reporting in a timely and accurate manner on
company procedures and developments

ii. Ensure the Bank complies with its governing


document, policies, company law and any
other relevant legislation i.e. regulations with
Bangladesh Bank, Bangladesh Securities and
Exchange Commission (BSEC) and Registrar of
Joint Stock Companies etc. Support and advise
the Chair by ensuring the smooth functioning
of the Board. Work in partnership with the Chief
Executive and other Trustees to ensure the
activities & operations of the Bank.
iii. Support the Chairman in the smooth
functioning of the Board. Receive agenda
items from other Directors/staff and ensure
appropriate agenda items are tabled at
Board meetings. This is done in consultation
with the Chief Executive and the Chair who
is responsible for preparing Board meeting
agendas.
iv. In line with Bangladesh Bank guidelines the
company secretary has to act as the Secretary to
the Audit Committee of the Board of Directors.
In this area of risk mitigation, the Company
Secretary has a pivotal role to play in support
of the members of the Audit Committee, Board
Audit Cell, Audit & Inspection Division and
Internal Control & Compliance Division.
v. Act as a custodian of Banks governing
documents and policies. Ensure the Bank
pursues its objects as defined in its governing
document. He should act as a custodian of the
interests of the Bank. So it is his prime duty to
protect and safeguard such interests of the
Bank at all levels: statutory, administrative, and
arbitrational and in other policy matters. He
should also ensure that Board meeting minutes
are signed by the Chair once they have been
confirmed and copies filed and kept at the Bank.
vi. Ensure the appointment of Banks board
members, that those appointed are not
disqualified in law and are eligible to be
members under the provisions of the
governing documents and policies, and that
the appointment procedure laid down in the
governing document and policies is followed.

vii. Make sure that the Directors have information


to enable them to comply with the decisions
and fulfil their responsibilities. This includes
organizing the induction of new Directors also.
viii. Ensure that Board meetings are held in
compliance with Banks governing documents
and arrangements for the meetings are made.
ix. Confirms that Annual General Meetings (AGMs)
and Extraordinary General Meetings (EGMs)
are run effectively and in accordance with the
provisions of Banks governing document. This
includes checking that a quorum is present.
Also make sure that agendas and minutes of
AGMs and EGMs are circulated timely.
x.

File the annual list of members and summary of


share capital together with the authenticated
Balance Sheet and the Profit and Loss
account. Issue Dividend Warrants, bonus share
certificates and make arrangement for disposal
of fractional shares, if any.

xi. Maintain strict confidentiality of information,


manage situations like conflict of interest,
identify problems and implement or
recommend solutions.
xii. Maintain and liaise with various corporate
bodies viz. BAB, ABB, Chambers/other bodies,
regulators.

Vision, Mission and Strategy approved by the


Board
Vision/Mission approved by Directors
The Board of Directors has approved the vision and
mission statements of Prime Bank, and adheres and
strictly follows what has been approved. They strongly
believe in the vision and mission set for PBL and try
to apply them in every business context possible. The
Vision and Mission statements can be found on 10 & 11.
Business objectives and areas of business focus
PBLs Board has set business objectives and areas for
business focus since its inception. As the countrys
economy grew, the Board has changes its objectives and
focus areas accordingly. PBL has always tried to change
its objectives when the situation has changed, and
focused its business on sectors that have been thriving
whenever the opportunity has come up. The latest
business objectives and areas of business focus can
be found in the Statement Regarding Forward Looking
Approach section of the annual report on page 15.
Strategies to achieve the business objectives
PBL always sets up a Strategic Action Plan in the

57

Annual Report 2014


beginning of the year to align its business objectives
for the year with its strategies. The Board always
sets strategies accordingly to give direction to the
management of the Bank on how to steer the bank
forward for the upcoming year. Strategies set to achieve
the business objectives can be found in the Strategic
Priority section of the annual report on page 13.

Audit Committee
Chairman is an independent Non-Executive Director
The Chairman of the Audit Committee is a BSEC
approved independent non-executive director,
who is not involved in the day to day operations
of the bank. He is an experienced individual and
competently qualified to qualify to be the Chairman
of the Audit Committee.
Terms of Reference (TOR) and empowerment to
investigate employees
The Audit Committee established a terms of reference
(TOR) so that it could function effectively and
smoothly. The TOR was created to define the roles and
responsibilities of the Audit Committee. The committee
is also empowered to investigate/question employees
and retain external counsel when required.
Composition of the Audit Committee
As per BSEC notification no. SEC/CMRRC/2006-158/129/
Admin/44 dated 7th August 2012 on Corporate
Governance; the current Audit Committee is consisted
of 5 members. The Audit Committee is constituted of 2
Directors and 3 Independent Directors. All members of
the Audit Committee are non-executive directors.
All members suitably qualified
All members of the Audit Committee are very well
qualified and have years of experience in the banking
sector. They are also very competent regarding
education and come from a variety of educational
backgrounds, which brings diversity in the committee.
PBL does have one director in the Audit Committee that
has extensive knowledge in the finance and accounting
field, and has been very active in all the meetings of the
committee as well.
Head of Internal Audits access in the Audit
Committee
The Head of Internal Audit always has access to the
audit committee and can raise his concerns whenever
required.
Terms of Reference
To steer the Audit Committee forward, a terms of
reference (TOR) has been established. According to the

58

TOR for the Audit Committee, some of the roles and


responsibilities are as follows:
1.0 Purpose
To monitor and review the formal arrangements
established by the Board in respect of:
a. The financial reporting and narrative reporting
of the Bank
b. The effectiveness of the internal controls and
the risk management framework
c. Whistle blowing
d. Internal audit process
e.

External auditors appointment/reappointment.

The Committee will act independently to ensure that


the interests of shareholders are properly protected in
relation to financial reporting and internal control, always
within the principle of all directors having a duty to act
in the interests of the Bank and all directors remaining
equally responsible for the Companys affairs.
2.0 Authority
The Audit Committee is a committee of the Board of the
Company. The Committee is authorized by the Board to:
a. Investigate any activity within its terms of
reference and have such direct access to the
resources of the Bank as it may reasonably
require
b. Seek any information that it requires from any
employee, and all employees are directed
to co-operate with any request made by the
Committee
c. Engage outside legal or other independent
professional advisers and obtain appropriate
funding for the payment of relevant fees and
expenses.
Where the Committee is not satisfied with any aspect
of the proposed financial reporting by the Company it
shall report its views to the Board of the Company. In
the event of any disagreement between the Committee;
members and the rest of the Board, such matters will be
resolved at Board level.
3.0 Responsibilities
Financial Affairs of the Group

To monitor the integrity of the financial


statements of the Bank (and any discussion or
analysis thereof including annual and interim
reports), and any formal announcements relating
to the Banks actual and forecast financial
performance, reviewing significant financial
reporting judgments contained in them.

To review any unusual items or matters brought


to its attention requiring the exercise of
managerial judgment affecting the preparation
of the statements and announcements

should assess whether the narrative is consistent


with the accounting information.
Standards of Internal Control

To provide a forum for the discussion and


resolution of areas of disagreement in relation
to the statements and announcements, e.g.
between management and the External Auditor

Accounting, Financial Reporting and Regulatory


Compliance

To review the arrangements of the Banks


systems of internal controls in relation to
financial management, compliance with
laws and regulations and safeguarding of
assets, and the procedures for monitoring the
effectiveness of such controls

To monitor any significant deficiencies and


material weaknesses in internal controls,
disclosure controls and procedures, as reported
by Internal Audit and the External Auditor,
and the implementation by management of
appropriate remedial action

To review arrangements for the receipt,


retention and treatment of complaints
including those regarding accounting, internal
accounting controls or auditing matters. To
review procedures by which employees may, in
confidence and with anonymity, raise concerns
including those of questionable financial
reporting, accounting or auditing matters.

To monitor and review in broad terms the


scope, nature of the work and effectiveness
of Internal Audit and to receive and review
its reports, findings and recommendations
covering key operating risks.

Review the arrangements made by the


management for building a suitable
Management Information System (MIS)
including computerization system and its
application

Review the existing risk management


procedures for ensuring an effective internal
check and control system

Evaluate whether management is setting


the appropriate compliance culture by
communicating the importance of internal
control and the management of risk and
ensuring that all employees have understanding
of their roles and responsibilities

Review the corrective measures taken by the


management as regards the reports relating to
fraud-forgery, deficiencies in internal control
or other similar issues detected by internal
and external auditors and inspectors of the
regulatory authority and inform the board on
a regular basis

To review, and challenge where necessary, the


actions, estimates and judgments of management
(and any changes in them), in relation to the interim
and annual financial statements before submission
to the Board, paying particular attention to:
(1) Significant accounting policies
practices, and any changes in them

and

(2) Disclosures and estimates requiring a


major element of judgment
(3) The extent to which the financial
statements are affected by any unusual
transactions in the year, the methods used
to account for any significant or unusual
transactions where different approaches
are possible, and how such transactions
are disclosed
(4)
The clarity and completeness of
disclosures, and the context within which
financial statements are made
(5) Compliance with accounting standards
(6) Compliance with legal and regulatory
requirements
(7) The going concern assumption
(8) The representation letter to the auditors;
and
(9)
All material information presented
with the financial statements including
the business review, and corporate
governance statements relating to the
audit and risk management.

To review the controls and procedures established


by management for compliance with regulatory
and financial reporting requirements and with the
requirements of external regulators

To review the content of the annual report and


accounts and advise the Board on whether, it is fair,
balanced and understandable and provides the
information necessary for shareholders to assess
the companys performance, business model and
strategy. The review undertaken by the Committee

The Groups Relationship with its External Auditors

Make recommendations to the Board, to be put to

59

Annual Report 2014


shareholders for approval at the Annual General
Meeting, on the appointment, reappointment
and removal of the external auditor. The Audit
Committee shall oversee the process for selecting
the external auditor

how the committee has assessed the effectiveness


of the external audit process and the approach
taken to the appointment or reappointment of the
external auditor, including length of term

Oversee the relationship with the external auditor,


including:
a) Approving the terms of engagement (and the
engagement letter) of the external auditor,
including the remuneration to be paid

Other Responsibilities

Place compliance report before the board on


quarterly basis regarding regularization of the
errors & omissions, fraud and forgeries and other
irregularities as detected by the internal and external
auditors and inspectors of regulatory authorities

Perform other oversight functions as requested


by the board and evaluate the committees own
performance on a regular basis

b) Assessing the external auditors effectiveness,


independence and objectivity, ensuring that
key partners are rotated at appropriate intervals
c) Agreeing the policy for, and where required
by that policy, approving the provision of nonaudit services by the external auditor and the
related remuneration
d) Agreeing with the Board a policy on the
employment of former employees of the Banks
auditor, and monitoring the implementation of
this policy

Review and approve the annual audit plan, and


ensure that it is consistent with the scope of the
audit engagement, and coordinated with the
activities of the Internal Audit function

Discuss with the external auditor, before the audit


commences, the nature and scope of the audit and
review the auditors quality control procedures and
steps taken by the auditor to respond to changes in
regulatory and other requirements

Review the findings of the audit with the


external auditor, considering the external
auditors management letter and managements
responsiveness to the auditors findings and
recommendations

Review reports prepared by the external auditor


as the Audit Committee shall require, considering
managements response to any major external
audit recommendations

Review annually and report to the Board on


the qualification, expertise and resources, and
independence of the external auditors and
the effectiveness of the audit process, with a
recommendation on whether to propose to the
shareholders that the external auditor be re-appointed.
The assessment should cover all aspects of the
audit service provided by the audit firm, and include
obtaining a reporting on the audit firms own internal
quality control procedures and consideration of the
audit firms annual transparency report where available

60

Ensure that the audit committee section of the


annual report should include an explanation of

Review the audit representation letters before


signature, giving particular consideration to any
non-standard issues within the representations

Audit committees review on internal controls


The Internal Audit Division of the bank reviews the
internal control systems of the bank and ensures that
internal controls are considered properly managed and
satisfactorily supervised. The Internal Audit Division
reviews internal controls throughout all divisions/
branches of the bank and then reports to the Audit
Committee on their findings. The Audit Committee
then reviews the report submitted by the Internal
Audit Division, and provides feedback on the lapses
found. The Audit Committee also guides the Internal
Audit Division on how to properly monitor internal
control and ensure that internal controls are being
correctly administered throughout the bank. The Audit
Committee is committed that internal controls are well
conceived, properly administered and satisfactorily
monitored by the bank in 2014.
Audit committees role in compliance with laws and
regulations
PBL being a part of the banking industry in Bangladesh
is obliged to act in accordance with applicable laws and
regulations. There are several regulatory authorities,
primarily Bangladesh Bank, who are associated with
the companys operation and performance. The Audit
Committee supervises and guarantees the Board,
that the company obeys all the applicable laws, rules
and regulations of various regulatory authorities. The
Audit Committee takes all measures to ensure that
PBL complies with all laws and regulations and that all
statutory dues are being settled timely.
Audit committees contribution in the external audit
function
The Audit Committee analyses the audited financial
statements with management and the external auditors
to ensure that the Companys financial statements are

objectively presented in compliance with the relevant


Bangladesh Financial Reporting Standards, International
Financial Reporting Standards and Bangladesh
Accounting Standards in all substantial aspects, based
on its review and consultations with management and
the external auditors. External Auditors are requested
to attend the Audit Committee meeting where Financial
Statements of PBL is revised for circulation to the Public.
The Committee also implements an annual assessment
of the efficiency of the Companys Internal Audit function
and certifies that Internal Audit has sufficient resources
to accomplish its duties. The audit committee has quite
a few roles regarding the external audit functions:
1. Ensure effective coordination of external audit
function
Frequent and open interaction between the audit
committee and the auditor is necessary for the
audit committee to acquire the information it needs
to accomplish its responsibilities to administer the
companys financial reporting processes. The quality
of communications also provides opportunities to
assess the auditors performance. The auditors should
correspond with the audit committee as noteworthy
issues develop. Such communications will emphasis
on the key accounting or auditing issues that, in the
auditors finding, give rise to a greater risk of material
misstatement of the financial statements, as well as any
questions or concerns of the audit committee. Through
proper communication, the audit committee ensures
the effective coordination of the external audit function.
2. Ensure independence of external audit function
The auditor must be independent of Prime Bank Limited.
Audit committee is familiar with the statutory and
regulatory independence requirements for auditors.
The technical competency of the auditor alone is not
appropriate to ensure a high-quality audit. The auditor also
must exercise a high level of objectivity and professional
skepticism. The audit committees interactions with the
auditor during the audit provide numerous opportunities
to evaluate whether the auditor demonstrated integrity,
objectivity and professional skepticism.
3. Review the external auditors findings in order to
be satisfied that appropriate action is being taken
There are many reviews that happen throughout the
entire process during the audit committee meetings
held. The audit committee extensively reviews all
findings of the external auditors and ensures that
management is informed and is taking action for
resolving any discrepancies. Before the financial
statements are signed, the audit committee reviews all
the findings and ensures that they are satisfied with the
actions that management has taken.

4. Review and approve non-audit work assigned


to the external auditor and ensure that such work
does not compromise the independence of the
external auditor
External auditors should not carry out work that does
not relate directly to the discharge of audit functions,
if it would impair the auditors independence, or
might give rise to a reasonable perception that their
independence could be impaired. The audit committee
must ensure that external auditors do not undertake any
work that might compromise their independence. If any
work is being done by the external auditors, the audit
committee must approve before the work commences.
In short, the audit committee is responsible that the
independence of the external auditors is not comprised
under any circumstance.
5. Recommend external auditor for appointment/
reappointment
The audit committee does an extensive review on
the audit work done by the auditors after the audited
financial statements have been signed. The audit
committee evaluates the auditors on a very detailed
level, and ensures that there were no threats to
independence or any other issues with the auditors.
The Audit Committee decides whether to recommend
appointing new auditors or reappointing the same
auditors after every AGM.
Audit committees involvement in selection of
appropriate accounting policies
The Audit Committee shall support the Board of
Directors in certifying that the financial statements
reflect a true and fair view of the company and
is maintaining a good supervising system within
the Bank. The Board delegates the duty to the
Audit Committee to decide on the appropriate
accounting policies that are in line with applicable
accounting standards as applicable and adopted
by the ICAB, IFRS, IAS and Bangladesh Securities
and Exchange Commission. After choosing the
appropriate accounting policies, the Audit Committee
recommends the Board concerning implementation
of the selected accounting guidelines. The Board
subsequently accepts the selected accounting
policies for implementation.
Audit committees involvement in the review of
annual and interim financial reports
As per the Corporate Governance guideline of BSEC,
the Audit Committee is expected to assess alongside
with management, the interim and half yearly and
annual financial statements before proposing to the
Board for consent. PBLs Audit Committee appraises the
interim and annual financial releases whether audited or

61

Annual Report 2014


unaudited and places it before the Board for approval.
The audit committee always ensures that the financial
statements reflect a true and fair view of the company
and analyses the financials for any discrepancies.
Reliability of management information used for
computation in financials
The Audit committee ensures that the management
information used for computation in the financials is true
and fair. In order to ensure reliability of the information,
the audit committee always has an extensive meeting
with management regarding issues of the financial
statements. The Audit committee queries management
on issues that they find material to the financial
statements and makes sure that management has a
proper response to their queries. Through meetings
with management the Audit committee will be able to
understand the reliability of the information used for
computation in the financials.

Internal Control
A system of effective internal controls is a critical
component of bank management and a foundation
for the safe and sound operation of the organization. A
system of strong internal controls can help to ensure that
the goals and objectives of a banking organization will
be met, that the bank will achieve long-term profitability
targets, and maintain reliable financial and managerial
reporting. Such a system can also help to ensure that
the bank will comply with laws and regulations as well
as policies, plans, internal rules and procedures, and
decrease the risk of unexpected losses or damage to
the banks reputation.
Internal control is a process affected by the board of
directors,senior management and all levels of personnel.
It is not solely a procedure or policy that is performed
at a certain point in time, but rather it is continually
operating at all levels within the bank. The board of
directors and senior management are responsible for
establishing the appropriate culture to facilitate an
effective internal control process and for monitoring
its effectiveness on an ongoing basis; however, each
individual within an organization must participate in
the process. The main objectives of the internal control
process can be categorized as follows:
1. Efficiency
and
effectiveness
(performance objectives);

of

activities

2. Reliability, completeness and timeliness of financial


and management information (information
objectives); and
3. Compliance with applicable laws and regulations
(compliance objectives).
Performance objectives for internal controls pertain to

62

the effectiveness and efficiency of the Bank in using


its assets and other resources and protecting the bank
from loss.
Information objectives address the preparation of
timely, reliable, relevant reports needed for decisionmaking within the banking organization. They also
address the need for reliable annual accounts, other
financial statements and other financial-related
disclosures and reports to shareholders, supervisors,
and other external parties.
Compliance objectives ensure that all banking business
complies with applicable laws and regulations,
supervisory requirements, and the organizations
policies and procedures. This objective must be met in
order to protect the Banks reputation.
Directors responsibility to establish appropriate
system of internal control
The Board of Directors has always been extremely active
in establishing appropriate systems of internal control.
The Board of Directors has no sympathy for any type
of fraud in the Bank, and always promotes a sound
and strong internal control system inside the Bank. The
Board of Directors has always appreciated the internal
controls that have been set up by management and
have also given advice on any matters when required.
The Board has always been very responsible and active
in establishing an appropriate system of internal control.
Key features of Internal Control System and the
manner in which the system is monitored
Key features of Internal Control System are as follows:
1.

Management oversight and the control culture

2. Risk recognition and assessment


3. Control activities and segregation of duties
4. Information and communication
5. Monitoring activities and correcting deficiencies
Management oversight and the control culture
The board of directors provides governance, guidance
and oversight to senior management. It is responsible
for approving and reviewing the overall business
strategies and significant policies of the organization.
The board of directors has the ultimate responsibility
for ensuring that an adequate and effective system of
internal controls is established and maintained.
Senior management is responsible for carrying out
the directives of the board of directors, including the
implementation of strategies and policies and the
establishment of an effective system of internal control.
An essential element of an effective system of internal
control is a strong control culture. It is the responsibility

of the board of directors and senior management to


emphasize the importance of internal control through
their actions and words. This includes the ethical values
that management displays in their business dealings,
both inside and outside the organization.
Risk recognition and assessment
An effective internal control system requires that the
material risks that could adversely affect the achievement
of the banks goals are being recognized and continually
assessed. This assessment should cover all risks facing
the bank (which are credit risk, country and transfer risk,
market risk, interest rate risk, liquidity risk, operational
risk, legal risk and reputational risk). Internal controls
may need to be revised to appropriately address any
new or previously uncontrolled risks.
Control activities and segregation of duties
Control activities should be an integral part of the daily
activities of a bank. An effective internal control system
requires that an appropriate control structure is set up,
with control activities defined at every business level.
These should include: top level reviews; appropriate
activity controls for different departments or divisions;
physical controls; checking for compliance with
exposure limits and follow-up on non compliance;a
system of approvals and authorizations and, a system of
verification and reconciliation.
Information and communication
An effective internal control system requires there
are adequate and comprehensive internal financial,
operational and compliance data, as well as external
market information about events and conditions that
are relevant to decision making. Information should be
reliable, timely, accessible, and provided in a consistent
format.
Monitoring activities and correcting deficiencies
The overall effectiveness of the banks internal controls
should be monitored on an ongoing basis. Monitoring of
key risks should be part of the daily activities of the bank
as well as periodic evaluations by the business lines and
internal audit.
The board of directors of Prime Bank performs the
following activities to monitor the Internal Control
System:
1.

Periodic discussions with management


concerning the effectiveness of the internal
control system.

2. Timely review of evaluations of internal controls


made by management, internal auditors, and
external auditors.
3. Periodic efforts to ensure that management has

promptly followed up on recommendations


and concerns expressed by auditors and
supervisory authorities on internal control
weaknesses.
4. Periodic review of the appropriateness of the
banks strategy and risk limits.
Through the establishment of the Audit Committee, the
Board of Directors monitors the effectiveness of internal
control system. The Audit Committee evaluates whether
management is setting the appropriate compliance
culture by communicating the importance of internal
control among the employees. They also review the
corrective measures taken by the management relating
to operational lapses.
Senior management of Prime Bank develops processes
that identify, measure,monitor and control risks incurred
by the bank; maintains an organizational structure that
clearly assigns responsibility, authority and reporting
relationships;ensures that delegated responsibilities are
being carried out effectively; sets appropriate internal
control policies; and monitors the adequacy and
effectiveness of the internal control system. They ensure
proper control through techniques such as top level
reviews, activity controls, physical controls, compliance
with exposure limit, approvals & authorizations and
verification & reconciliation of transactions of the Bank.
Directors have reviewed the adequacy of the system
of internal controls
In almost every Audit Committee meeting the issue of
adequacy of the system of internal controls is a factor
that is taken into consideration. The Audit Committee
is responsible to the Board of Directors to ensure that
the system of internal controls is adequate to protect
against any type of fraud. The committee has reviewed
the corrective measures taken by management relating
to fraud-forgery and deficiencies in internal control.
The Audit Committee places all the compliance report
before the Board of Directors and regulators on a timely
basis and has performed all other oversight functions in
relation to Internal Control System of the Bank. In this
way, the Directors review the adequacy of the system of
internal controls.
Identification of risks PBL is exposed to internally and
externally
Banking industry is unique in many ways and one of
the features that set it apart from other business is
the diversity and complexity of the risks it is exposed
to. Deregulated regimes along with globalization of
business have opened new frontiers that warrant
risk management an even greater priority. The failure

63

Annual Report 2014


to adequately manage these risks exposes banks
not only to business losses but also may result in
circumstances that they cannot remain in business.
Prime Bank has identified six core risk areas of banking
which are as follows:
1.

Credit Risk

2. Asset and Liability/Balance Sheet Risk


3. Foreign Exchange Risk
4. Internal Control and Compliance risk
5. Money laundering Risk
6. Information and Communication Technology
Security Risk
Banking companies in Bangladesh, while conducting
day-to-day operations, may face some other risks both
internally and externally:

Credit risk also includes concentration risk,


country risk, transfer risk, and settlement risk

Market risk (including interest rate risk in the


banking book, foreign exchange risk and equity
market risk)

Liquidity Risk

Operational Risk

Strategic Risk

Reputation Risk

Strategies adopted to manage and mitigate the risks


Prime Bank adopted the following strategies to manage
and mitigate the risk:

64

Preparing management information on issues


such as IT security, physical security, business
continuity, and compliance.

More information regarding Risk management


techniques used by management to identify and
mitigate risk can be found in the Risk Management
chapter on page 140.

Ethics and Compliance


Prime Bank is always committed to establish the highest
level of business compliance and ethical standard.
The Bank has an Employee Code of Ethics and
Business Conduct a framework of ethical behavior
for all the employees of the organization.
The leaders/managers are required to exemplify the
highest standards of conduct and ethical behavior. The
leaders/managers are expected to:

Lead according to Prime Bank standards of


ethical conduct, in both words and actions.

Create and maintain an environment where


employees feel comfortable asking questions
or reporting concerns.

Be diligent in enforcing the Banks ethical


standards and taking appropriate action if
violations occur.

Contact the Human Resources Division when


in need of assistance.

The Employee Code of Ethics and Business


Compliance also specify the grounds of punishment
to refrain employees from any unwanted behavior. For
instances, an employee shall be liable to disciplinary
actions, if he/she:

Setting targets for capital ratios and capital


composition

Managing the balance sheet

Managing the funding structure

Determining general principles for measuring,


managing, and reporting the banks risks

Is convicted of any offence involving moral


turpitude; or

Developing risk policies for business units

Determining the overall investment strategy

Is corrupt or may reasonably be considered to


be corrupt; or

Identifying, monitoring, and managing the


banks current and potential operational risk
exposures

Assumes a style of living beyond his/her


ostensible means; or

Is engaged or is reasonably suspected of


being engaged in subversive activities, or is
reasonably suspected of being associated
with others engaged in subversive activities,
and whose retention in service is therefore
considered prejudicial to national security; or

Is in possession of pecuniary resources or


property disproportionate to his/her known
sources of income etc.

Handling critical risks (risks that require followup and further reporting)

Following up on reviews by and reports from


Bangladesh Bank and informing the Board of
issues affecting the banks operational risks

Following up on reports prepared by Internal


Audit and informing the Board through Audit
Committee of unusual circumstances

The code of employee ethical behavior gives focus on


the followings:

Protecting Privacy of Customers


Confidential Company Information,

and

Preventing Money Laundering and/or Fraud,

Avoiding Drug/ Substance/ Alcohol Abuse in


the Workplace

Protecting Banks assets

Avoiding any conflict of interest etc.

Each of the above stated issue is properly explained as


separate section in the Employee Code of Ethics and
Business Compliance.
Integrity
The Employee Code of Ethics and Business Conduct
starts with the phrase Uncompromising integrity.
Employees of Prime Bank are judged not only in terms
of competencies, but also with their integrity. The
reputation and continued success of Prime Bank largely
depend on a shared commitment to the core value of
integrity. Respecting this value is the responsibility of
each and every member of the organization.
Conflict of interest
The Code of Ethics and Business Conduct aware
employees to avoid situations where their personal
interests conflict, or may appear to conflict, with those
of the Bank. Employees are advised to take particular
care when they are responsible for dealing with
customers, suppliers, agents on behalf of the Bank.
Any failure to disclose a conflict of interest leads to a
disciplinary action.
Compliance with the laws and regulations
Prime Bank maintains its reputation as a law-abiding
organization and a good corporate citizen. It complies
with all the prevailing laws and regulations of the country.
Employees are trained and guided to conduct business
in compliant manner. The policy and procedures
regarding Prime Banks business process are prepared
in adherence to the laws and regulations.
Communication of the statement of ethics & business
practices
All employees are properly inducted to comply with
Code of Ethics and conform to the relevant laws and
regulations. HR Division makes sure that during joining
employees read, understand the Code of Ethics and
Business Conduct and acknowledge the same by
signing. HR continuously raises awareness on regular
interval among employees to ensure that business
decisions and actions undertaken by employees are
completely in compliance with the prevalent rules and

regulations. The leaders/managers of the Bank are


mandatorily required to communicate and help their
employees to understand how ethics apply to their
positions and everyday behavior.
The Board of Directors of Prime Bank has approved the
Employee Code of Ethics and Business Compliance
with a commitment to set the high ethical standards
so that customers expectations and interests are
protected in a compliant manner.
The Boards commitment to establishing high level of
ethics and compliance within the organization
The Board of Director has always been committed
to establishing a high level of ethics and compliance
among all employees of the organization. They have
always encouraged management to ensure that
everyone maintains a high ethical standard within the
Bank. The Board guides management on principles
that should be adopted and followed by everyone in
the Bank.
Whistleblowing
Whistle blowing about bad practices early can help to
ensure that problems are identified before it is too late.
This helps to prevent disasters ranging from customer
mistreatment to huge financial loss. Prime Banks
whistleblowing procedures encourage employees
to disclose concerns using appropriate channels
before these concerns become a serious problem
which might jeopardize Banks reputation through
negative publicity, regulatory investigation, fines and/
or compensation.
Whistleblowing is increasingly recognized as an
important tool in the prevention and detection of
corruption and other malpractice. The clandestine
nature of corrupt behavior means that it may never
come to light unless cases are reported by people who
discover them in the course of their work.
Employees are encouraged to report any wrong-doing
within the Bank. The Head of Internal Control and
Compliance and Human Resources Divisions are the
primary channel to report any incident. The Reporting
channels offer the employees the opportunity to report
while maintain their identity as confidential. However,
from experience Prime Bank understands that an
effective whistleblowing policy demands for a shift in
the culture.
The Bank has a division named Internal Control and
Compliance Division which dedicatedly works to
ensure effective controls mechanism in the entire
business entity.

65

Annual Report 2014

Remuneration Committee
Composition and Charter
Prime Bank ltd. has a Management Committee which
comprises Managing Director, Deputy Managing
Directors and other Heads of Division to review, discuss
and decide on important business issues. In addition
to the regular roles and responsibilities, the Committee
assist in formulation of remuneration related policies
and practices in alignment of the Banks short and longterm business objectives.
The roles and responsibilities of the committee are the
followings:

Review the effectiveness of remuneration


policy to ensure that whether the Boards set
objectives and expectations are being met;

Ensure that an effective remuneration policy,


procedure and practice are in place, aligned
with the Banks strategy, and is applied
consistently for all employee levels.

Ensure that the structure and mix of fixed


and variable pay and other elements are in
alignment with the overall business objectives;

Guide and give suggestion to HR team during


preparation and review of any policy or process
related to compensation and benefits;

Ensure that all benefits, including retirement


benefits and other financial arrangements, are
justified, appropriately valued and promoting the
performance based reward & recognition etc.

Disclosure of key policies with regard to remuneration


of directors, senior management and employees
All employees including the Senior Management
employees are paid competitive remuneration package.
The structure and level of remuneration are reviewed
time to time based on Banks performance and
affordability. The remuneration also stresses on ensuring
internal and external pay equity.
Meetings and work performed
The committee holds meeting on a regular interval
throughout the year. So, if any remuneration related
issue needs committees attention, it is placed as
agenda for necessary review. However, if required, the
meeting is held on need basis to review and discuss any
remuneration related issue exclusively. In 2014, a total of
06 meetings were held by the Management Committee.
Disclosure of Remuneration of Directors, Chairman,
Chief Executive and Senior Executives
The Directors of the Board are paid only honorarium for

66

attending Board or Committee meetings. On the other


hand, the Managing Director is paid salary and other
allowances (the details are shown in page number 353).
The total cost related to employee compensation is
shown in the page number 352.

Human Capital
Employees are the key driving force of Prime Banks
continuous success
A group of motivated and engaged employees with
diverse talents are the key asset of Prime Bank. Prime
Bank is highly reputed in the market as an employer
of choice. The Bank has positioned itself with a
performance-driven rewarding work culture; where
employees are treated with respect and receive widened
opportunities to realize their diverse potentials fully as
well as benefit the organization by demonstrating value
creating behaviors.
To ensure long term sustainability, Prime Bank has a
special focus on skill and merit based recruitment and
selection process, highly competitive remuneration
package, adequate training and development programs,
career growth with succession planning, highperformance culture and pleasant working atmosphere
where employees are able to escalate their grievance
and receive counseling.
Recruitment and selection process with bestfit ethos followed by clearly defined policy and
procedures
The recruitment and selection of Prime Bank follows the
best fit approach. As per Banks requirement Human
Resources Division ensures that the potential candidates
are properly assessed, selected and placed on-time as
per required competencies (KSA Knowledge, Skill &
Attributes) and experience. Prime Bank has a recruitment
policy that clearly states the criteria and procedures
to recruit fresh and lateral entrants. The Bank has a
Management Trainee Program which is aimed to recruit
outstanding fresh graduates and develop them as the
future leaders of Prime Bank Ltd.
Ensuring
adequate
learning
&
development
opportunities through effectively designed training
programs and on-the-job experience PBL continuously
thrives to transform Human Resources to Human
Capital through appropriate learning and development
initiatives in every aspects of work area. HR Division
regularly undertakes effectively designed training
programs targeting the right group of employees
through proper training need assessment. The Bank has
a separate HR Training & Development Centre.

Well-crafted compensation & benefits package to have


a positive impact on employees overall well-being
PBL has a flexible compensation and benefits
system that helps to ensure pay equity, is linked with
performance that is understood by employees, and
keeps in touch with employee desires and whats
coveted in the market, while maintaining a balance
with the business affordability.
All employees are paid competitive remuneration
package. The structure and level of remuneration are
reviewed time to time based on Banks performance
and affordability.
Ensuring horizontal and vertical career growth
PBL always plans for employees so that they can advance
their career goals. This includes advancement into more
responsible positions. The company supports career
opportunities internally so that talented employees are
placed in upgraded positions and thereby enables them
to deliver their greatest value to the organization. In
addition to vertical career growth, employees may also
grow horizontally. Whenever possible Human Resources
Division mobilizes employees across different functions
and branches; thus assisting them to progress with
varied skills and experience.
Succession planning for the talents in different layers
of the organizational hierarchy
Besides encouraging individual employee growth
and development, PBL also gives effort o identify and
retain the human resources who can potentially be the
successors of mission critical roles. PBL acknowledges
that Succession Planning & Management is vital to
the continued success of the Bank. PBL continuously
assesses organizational, divisional and team capability
gaps to identify, develop and retain the successors in a
timely manner to meet the demands of the future.
Comprehensive performance management program
to reward employees and drive further development
PBL has a comprehensive performance management
program that evaluates employees yearly performance
against business targets at the year-end. This
performance appraisal system is considered as
crucial for the Bank as this is a very important tool
to identify and distinguish the performers and nonperformers. Prime Bank believes that a well-executed
performance appraisal system can help to reward the
deserving employees, as well as help to ensure further
development program for the rest.
Reward & recognition program to meet employees
intrinsic psychological need for appreciation
PBL has a well-designed Reward & Recognition program

that gives special attention to employees actions,


efforts, behavior and performance. It meets the intrinsic
psychological need for appreciation of employees
efforts and supports business strategy by reinforcing
certain behaviors (e.g., extraordinary accomplishments)
that contribute to Banks success.
Grievances and counseling
Since employees behavior affects work discipline, HR
Division always encourages employees to report if they
have any work related grievance. In PBL there is formal
procedure to address the employee grievance. Time to
time HR Division also counsels employees as part of its
job as peoples advocate.
Ensuring a decent workplace where employees can
participate in work with respect
Prime Bank believes that the business can grow
favourably if the organization enables employees by
creating and maintaining a decent workplace. In PBL,
there is a decent work environment where employees
can work with dignity, have the freedom to express
opinions, can participate in the decision making process
that affect their lives, and receive equal treatment and
opportunity. PBL ensures security in the workplace
and social protection for employees families, better
prospects for their personal development and social
integration.

Communication to Shareholders & Stakeholders


Companys policy/strategy to facilitate effective
communication with shareholders and other
stakeholders
Prime Bank ensures that all shareholders are
notified at least 2 weeks before the AGM so that all
shareholders may attend on the day. Also all other
types of accounts (Quarterly and Half yearly) or
information are updated on the website and notified
to all stakeholders on a duly basis. The Bank tries
to maintain liaison with all major shareholders as
much as possible and ensures that all stakeholders
are informed about the banks activities on a routine
basis. PBL also engages with all types of stakeholders
as much as possible to ensure that information is
effectively communicated. More details about the
PBLs policy on engaging stakeholders can be found
in the Sustainability Report on page 187.
Companys policy on ensuring participation of
shareholders in the Annual General Meeting and
providing reasonable opportunity for the shareholder
participation in the AGM
PBL tries its utmost to ensure that all shareholders can
participate in the AGM. Annual Reports are sent out

67

Annual Report 2014


as early as 2 weeks or before the AGM to ensure all
shareholders are notified about the event date, place
and time. Also, PBL always ensures that AGM is held at
a convenient place where all shareholders may attend.
Notices to shareholders are made by publication in
the daily newspapers and through the digital media
as well. To ensure compliance with regulatory bodies,
PBL ensures that it publishes in two widely circulated
newspapers in English and Bangla and sent to the stock
exchanges and BSEC.
PBL ensures effective communication with the
shareholders and encourages shareholder participation
at the AGM. PBL connects with the investors through
AGM, EGM, the Annual Report and Companys website.
All of the Banks publications to the market may be
retrieved through the Companys website. Shareholders
are offered the chance to interrogate the Board
regarding the operation of the Bank. They are also
presented the ability to query the Companys auditors
concerning topics linked to the audit of the Companys
financial statements at the AGM.

Environmental and Social Obligation


Description of the companys policies and practices
relating to social and environmental responsibility
of PBL
A natural and fresh environment, efficient use of
reserves and appreciation for peoples well-being and
safety are what PBL has always believed in. In harmony
with this, PBL is constantly working towards decreasing
consumption of energy (especially electricity, water
and gas) at its branches, removal of use of hazardous
substances from its practices and reducing waste
generation. The importance is on diminishing paper
transactions to the extent that the Credit Committee
has already been made paperless, and PBL is moving
forward and thinking about implementing it more

68

through the branches. One of the key objectives for


financing manufacturing companies is to ensure that
they try to lessen their carbon footprint.
Bangladesh Bank has taken steps to inspire green
banking in Bangladesh through the issuance of
guidelines on green banking and Environmental Risk
Management (ERM). It is always inspiring banks in
lessening paper communications and fitting solar
power system in branches and giving refinance to the
solar energy, bio-gas and effluent treatment plant (ETP)
sectors at eased interest rates.
PBL has always been committed to the environment
and also been active in social activities throughout the
year 2014, and will remain to do so in the future.
Specific activities undertaken by the PBL regarding
environmental and social responsibilities
PBL has always been active regarding its activities
for the environment. One of its achievements was
to make the Credit Committee paperless in 2014. It is
also in the process of issuing a green manual for how
to make all branches and divisions more environmental
friendly. Also, solar panels have been set up in quite a
few branches as well, and the initiative has been taken
to install more sonar panels in branches in the future.
Environmental activities during the year can be found
more in details in the Green Banking Report on page 80
and the Sustainability Report on page 187.
PBL has always been an active member of society and
has tried to enhance peoples lives and its employees
as well. Prime Bank Foundation was solely initiated
for the purpose of Corporate Social Responsibility.
PBLs social activities can be found on the Prime Bank
Foundation chapter on page 223 and its commitment to
its employees can be found in the Sustainability Report
on page 187.

Board
Meeting : 2014
Sl
No.

Name of Directors

Mr. Azam J Chowdhury


(Representative of East Coast
Shipping Lines Ltd.)

Designation

Presence of the Directors in


the Meetings
Remuneration drawn
(Tk.5,000.00/Meeting)
No. of
Present Absent
Meetings

Chairman

11

10

01

Tk.50,000.00

Mr. M. A. Khaleque

Vice Chairman

17

10

07

Tk.50,000.00

Mr. Khandker
Mohammad Khaled

Vice Chairman

17

07

10

Tk.35,000.00

Mr. Md. Nader Khan

Director

17

08

09

Tk.40,000.00

Quazi Sirazul Islam

Director

17

12

05

Tk.60,000.00

Director

17

12

05

Tk.60,000.00

Director

17

15

02

Tk.75,000.00

Director

17

13

04

Tk.65,000.00

Director

17

01

16

Tk.5,000.00

Director

17

05

12

Tk.25,000.00

6
7
8
9
10

Mr. Md.Shirajul Islam


Mollah
Mr. Mafiz Ahmed
Bhuiyan
Mr. Md. Shahadat Hossain
Mr. Mizanur Rahman
Bhuiyan
Mrs. Marina Yasmin
Chowdhury

11

Mrs. Nazma Haque

Director

17

16

01

Tk.80,000.00

12

Mrs. Salma Huq

Director

17

10

07

Tk.50,000.00

13

Mrs. Muslima Shirin

Director

17

14

03

Tk.70,000.00

14

Mrs. Nasim Anwar


Hossain

Director

17

16

01

Tk.80,000.00

15

Mr. Imran Khan

Director

17

05

12

Tk.25,000.00

16

Mr. Nafis Sikder

Director

17

07

10

Tk.35,000.00

17

Prof. Ainun Nishat

17

12

05

Tk.60,000.00

18

Mr. Manzur Murshed

17

13

04

Tk.65,000.00

17

17

Tk.85,000.00

06

02

04

Tk.10,000.00

19

20

Prof. Dr. Mohammed


Aslam Bhuiyan
Mr. Tanjil Chowdhury
(Representative of East
Coast Shipping Lines Ltd.
upto27.04.2014)

Independent
Director
Independent
Director
Independent
Director
Director

69

Annual Report 2014

Executive Committee
Meeting : 2014
Sl
No.

Name of Directors

Designation

Presence of the Directors in


the Meetings
Remuneration drawn
(Tk.5,000.00/Meeting)
No. of
Present Absent
Meetings

Quazi Sirazul Islam

Chairman

15

14

01

Tk.70,000.00

Mr. Imran Khan

Vice
Chairman

23

12

11

Tk.60,000.00

Mr. Md. Shirajul Islam Mollah

Member

15

08

07

Tk.40,000.00

Mr. Mafiz Ahmed Bhuiyan

Member

20

15

05

Tk.75,000.00

Mr. Md. Shahadat Hossain

Member

23

19

04

Tk.95,000.00

Mrs. Salma Huq

Member

23

17

06

Tk.85,000.00

Mrs. Nasim Anwar Hossain

Member

15

11

04

Tk.55,000.00

Director

07

07

Tk.35,000.00

Director

03

03

--

Director

08

08

Tk.40,000.00

Director

08

08

--

Mr. Tanjil Chowdhury


(Representative of East Coast
Shipping Lines Ltd.upto
27.04.2014)
Mrs. Marina Yasmin Chowdhury
(Upto 16.07.2014)
Mrs. Muslima Shirin
(Upto 31.05.2014)
Mr. Nafis Sikder
(Upto 31.05.2014)

9
10
11

Audit Committee
Meeting : 2014
Sl
No.

70

Name of Directors

Designation

Presence of the Directors in


the Meetings
Remuneration drawn
(Tk.5,000.00/Meeting)
No. of
Present Absent
Meetings

Prof. Ainun Nishat

Chairman

10

10

Tk.50,000.00

Mr. M. A. Khaleque

Member

10

Tk.30,000.00

Mr. Khandker Mohammad Khaled

Member

10

Tk.25,000.00

Mr. Manzur Murshed

Member

10

10

Tk.50,000.00

Prof. Dr. Mohammed Aslam


Bhuiyan

Member

10

10

Tk.50,000.00

Risk Management Committee


Meeting: 2014
Sl
No.

Presence of the Directors in


the Meetings
Remuneration drawn
(Tk.5,000.00/Meeting)
No. of
Present Absent
Meetings

Name of Directors

Designation

Mrs. Nasim Anwar Hossain

Chairperson

04

04

Tk.20,000.00

Mr. Khandker Mohammad Khaled

Director

04

01

03

Tk.5,000.00

Mr. Mafiz Ahmed Bhuiyan

Director

04

03

01

Tk.15,000.00

Mrs. Salma Huq

Director

04

01

03

Tk.5,000.00

Mrs. Muslima Shirin

Director

04

01

03

Tk.5,000.00

The pattern of Shareholding along


with name wise details of:
i)

Parent/Subsidiary/Associated Company and other related: Nil

ii) Shareholding of CEO, CFO, Company Secretary & Head of Internal Audit:
SL
No.

% of Shares as at
31.12.2014

Name of Executives

1.

Chief Executive Officer and his spouse and minor children

2.

Chief Financial Officer and his spouse and minor children

3.

Company Secretary and his spouse and minor children

4.

Head of Internal Audit and his spouse and minor children

iii) Shareholding of Directors:


SL No.

Name of the Directors

Mr. Azam J Chowdhury


(Representative of East Coast Shipping Lines
Ltd.)

2
3
4
5
6
7

Mr. Khandker Mohammad Khaled


Mr. M. A. Khaleque
Quazi Sirazul Islam
Mr. Md. Nader Khan
Mr. Md. Shirajul Islam Mollah
Mr. Mafiz Ahmed Bhuiyan

Status

% of shares as at 31.12.2014

Chairman

2.00
(Shareholding of East Cost
Shipping Lines Ltd.)

Vice Chairman
Vice Chairman
Director
Director
Director
Director

2.78
2.12
2.00
3.69
2.01
2.00

71

Annual Report 2014

Mr. Md. Shahadat Hossain

Director

2.70

Mr. Mizanur Rahman Bhuiyan


(Representative of Uniglory Cycle
Industries Ltd.)

Director

2.02
(Shareholding of Uniglory
Cycle Industries Ltd.)

10
11
12
13
14
15
16

Mrs. Marina Yasmin Chowdhury


Mrs. Nazma Haque
Mrs. Nasim Anwar Hossain
Mrs. Salma Huq
Mrs. Muslima Shirin
Mr. Nafis Sikder
Mr. Imran Khan

Director
Director
Director
Director
Director
Director
Director

2.03
2.01
2.27
3.13
2.00
2.51
2.00

17

Prof. Ainun Nishat

Independent Director

18

Mr. Manzur Murshed

Independent Director

0.003

19

Prof. Dr. Mohammed Aslam Bhuiyan

Independent Director

20

Mr. Ahmed Kamal Khan Chowdhury

Managing Director

iv) Shareholding of Senior Executive (Top five salaried executives other than CEO, CFO, CS, HIA):
SL
No.

Name of Executives

% of Shares as at
31.12.2014

1.

Mr. Md. Tabarak Hossain Bhuiyan, DMD

2.

Mr. Habibur Rahman, DMD

3.

A.S.M Khairuzzaman, SEVP

4.

Kazi Mahmood Karim, SEVP

5.

Md. Iqbal Hossain, SEVP

v) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details) - Nil.

72

73

Annual Report 2014

Report on Compliance of BSECs Notification on


Corporate Governance
(Notification No SEC/CMRRCD/2006-158134/Admin/44 dated 07 August, 2012)
Condition
No.
Board of Directors

1.1

Boards size shall not be less than 5 and more than 20

1.2

Independent Director
Independent director: At least 1/5th of the total
number of directors

1.2 (ii)
1.2 (ii) a)

1.2 (ii) b)

1.2 (ii) c)
1.2 (ii) d)

1.2 (ii) e)

1.2 (ii) f)
1.2 (ii) g)

1.2 (ii) h)

1.2 (ii) i)
1.2 (iii)
1.2 (iv)

Compliance Status
Remarks
(Put in the appropriate column) (if any)
Complied

1.0

1.2 (i)

74

Title

For the purpose of this clause independent director


means a director.
Independent director does not hold any share or
holds less than one percent (1%) shares of total paid
up capital.
Independent Director is not a sponsor of the
company and is not connected with the companys
Sponsor Or Director Or Shareholder who holds 1% or
more shares of the company (certain family members
are also required to comply with this requirement).
Independent director does not have any other
relationship, whether pecuniary or otherwise, with
the company or its subsidiary/associated companies.
Independent directors are not the members,
directors or officers of any stock exchange.
Independent director is not the shareholder, director
or officers of any member of Stock Exchange or an
Intermediary of the capital market.
Independent director is/was not the partners or
executives during preceding 3 (three) years of
concerned companys statutory audit firm.
Independent directors is not the independent
director in more than 3 (three) listed companies.
Independent director is not convicted by a court of
competent jurisdiction as a defaulter in payment of
any loan to a bank or a non-bank financial institution
(NBFI).
Independent director has not been convicted for a
criminal offence involving moral turpitude.
The independent director shall be appointed by the
Board of Directors and approved by the Shareholders
in the AGM.
The post of independent directors cannot remain
vacant for more than 90 days.

Not complied

Condition
No.

1.2 (v)

1.2 (vi)
1.3
1.3 (i)

1.3 (ii)
1.3 (iii)
1.4
1.5

Title

Compliance Status
Remarks
(Put in the appropriate column) (if any)
Complied

The Board shall lay down a Code of Conduct of all


Board Members and Annual Compliance of the
Code to be recorded.
The tenure of office of an Independent Directors
shall be for a period of 3 (three) years which may be
extended for 1 (one) term only.

Qualification of Independent Director (ID)


Independent director shall be knowledgeable
individual with integrity who is able to ensure
required compliance.
The independent director must have at least
12 (twelve) years of corporate management/
professional experiences along with other requisites.
In special cases above qualification may be relaxed
by the Commission
Separate Chairman and CEO and their clearly
defined roles and responsibilities.

N/A

Directors Report to Shareholders

1.5 (i)

Industry outlook and possible future developments


in the industry

1.5 (ii)

Segment-wise or product-wise performance.

1.5 (iii)

Risks and concerns

1.5 (iv)

Discussion on cost of goods sold, gross profit margin


and net profit margin

1.5 (v)

Discussion on continuity of any Extra-Ordinary gain


or loss

N/A

1.5 (vi)
1.5 (vii)
1.5 (viii)

1.5 (ix)

1.5 (x)

1.5 (xi)

1.5 (xii)

Not complied

Basis for related party transaction- a statement of all


related party transactions should be disclosed in the
annual report
Utilization of proceeds from public issues, right
issues and/ or through any others instruments.
An explanation if the nancial results deteriorate
after the company goes for IPO, RPO, Rights Offer,
Direct Listing etc.
If signicant variance occurs between Quarterly
Financial performance and Annual Financial
Statements the management shall explain about the
variance on their Annual Report.
Remuneration to directors including independent
directors.
The nancial statements prepared by the
management of the company present fairly its state
of affairs, the results of its operation, cash ows and
changes in equity.
Proper books of account of the company have been
maintained.

N/A

N/A

75

Annual Report 2014

Condition
No.

1.5 (xiii)

1.5 (xiv)

1.5 (xv)
1.5 (xvi)
1.5 (xvii)
1.5 (xviii)
1.5 (xix)
1.5 (xx)
1.5 (xxi)
1.5 (xxi) a)

1.5 (xxi) b)

1.5 (xxi) c)
1.5 (xxi) d)
1.5 (xxii)
1.5 (xxii) a)

Complied

1.5 (xxii) b)

Nature of his/her expertise in specific functional areas.

1.5 (xxii) c)

Names of companies in which the person also holds


the directorship and the membership of committees
of the board.

2.1
2.2
3

Not complied

Appropriate accounting policies have been


consistently applied in preparation of the nancial

statements and that the accounting estimates are


based on reasonable and prudent judgment.
International
Accounting
Standards
(IAS)/
Bangladesh
Accounting
Standards
(BAS)/
International Financial Reporting Standards (IFRS)/

Bangladesh Financial Reporting Standards (BFRS),


as --applicable in Bangladesh, have been followed
in preparation of the nancial statements and any
departure there-from has been adequately disclosed.
The system of internal control is sound in design and

has been effectively implemented and monitored.


There are no signicant doubts upon the company's

ability to continue as a going concern.


Signicant deviations from the last years operating
results of the company shall be highlighted and the

reasons thereof should be explained.


Key operating and nancial data of at least preceding

5 (ve) years shall be summarized.


If the company has not declared dividend (cash or
N/A
stock) for the year, the reasons thereof shall be given.
The number of Board meetings held during the year

and attendance by each director shall be disclosed.


The pattern of shareholding shall be reported to disclose the aggregate number of shares (along
with name wise details where stated below) held by:
Parent/Subsidiary/Associated Companies and other

related parties (name wise details);


Directors, Chief Executive Ofcer, Company
Secretary, Chief Financial Ofcer, Head of Internal

Audit and their spouses and minor children (name


wise details);
Executives (top five salaried employees of the

company other than stated in 1.5(xxi)b);


Shareholders holding ten percent (10%) or more

voting interest in the company (name wise details).


In case of appointment/re-appointment of a Director the Company shall disclose the following
information to the Shareholders:
a brief resume of the Director;

2.0

76

Title

Compliance Status
Remarks
(Put in the appropriate column) (if any)

Chief Financial Officer, Head of Internal Audit & Company Secretary


Appointment of CFO, Head of Internal Audit and
Company Secretary and their clearly defined roles,
responsibilities and duties.
Attendance of CFO and the Company Secretary at
Board of Directors meeting
Audit Committee:

Condition
No.
3 (i)

3 (ii)

3 (iii)
3.1
3.1 (i)
3.1 (ii)

3.1 (iii)

3.1 (iv)
3.1 (v)
3.1 (vi)
3.2
3.2 (i)
3.2 (ii)
3.3

Title

Compliance Status
Remarks
(Put in the appropriate column) (if any)
Complied

Audit Committee shall be the sub-committee of the


Board of Directors.
The Audit Committee shall assist the Board of
Directors in ensuring that the financial statements
reect true and fair view of the state of affairs of the
Company and in ensuring a good monitoring system
within the business.
The Audit Committee shall be responsible to the
Board of Directors. The duties of the Audit Committee
shall be clearly set forth in writing.

Constitution of the Audit Committee


The Audit Committee shall be composed of at least
3 members.
Constitution of Audit Committee with Board
Members including one Independent Director.
All members of the Audit Committee should be
nancially literate and at least 1 (one) member shall
have accounting or related nancial management
experience.
Filling of Casual Vacancy in Committee
The Company Secretary shall act as the secretary of
the Committee.
The quorum of the Audit Committee meeting shall
not constitute without at least 1 independent director.

N/A

Chairman of the Audit Committee


Chairman of the Audit Committee shall be an
Independent Director.
Chairman of the audit committee shall remain
present in the Annual General Meeting (AGM).

Role of Audit Committee

3.3 (i)

Oversee the nancial reporting process.

3.3 (ii)

Monitor choice of accounting policies and principles.

3.3 (iii)

Monitor Internal Control Risk management process.

3.3 (iv)

Oversee hiring and performance of external auditors.

3.3 (v)

3.3 (vi)
3.3 (vii)
3.3 (viii)
3.3 (ix)

Not complied

Review along with the management, the annual


nancial statements before submission to the board
for approval.
Review along with the management, the quarterly
and half yearly Financial Statements before
submission to the Board for approval.
Review the adequacy of internal audit function.
Review statement of signicant related party
transactions submitted by the management.
Review Management Letters/ Letter of Internal
Control weakness issued by statutory auditors.

77

Annual Report 2014

Condition
No.

Title

3.3 (x)

When money is raised through Initial Public Offering


(IPO)/ Repeat Public Offering (RPO)/Rights Issue
the company shall disclose to the Audit Committee
about the uses/ applications of funds by major
category (capital expenditure, sales and marketing
expenses, working capital, etc.), on a quarterly basis,
as a part of their quarterly declaration of financial
results.
Reporting of the Audit Committee

3.4.1

Reporting to the Board of Directors

3.4.1 (ii)
3.4.1 (ii) a)
3.4.1 (ii) b)
3.4.1 (ii) c)
3.4.1 (ii) d)
3.4.2
3.5
4
4 (i)
4 (ii)
4 (iii)

The Audit Committee shall report on its activities to


the Board of Directors.
The Audit Committee shall immediately report to the
Board of Directors on the following ndings, if any:
Report on conflicts of Interests.
Suspected or presumed fraud or irregularity or
material defect in the internal control system;
Suspected infringement of laws, including securities
related laws, rules and regulations;
Any other matter which shall be disclosed to the
Board of Directors immediately.
Reporting of anything having material financial
impact to the Commission.
Reporting to the Shareholders and General Investors.

N/A

NIL

NIL
NIL

External/Statutory Auditors should not be engaged in:


Appraisal or valuation services or fairness opinions.
Financial information systems design and
implementation.
Book-keeping or other services related to the
accounting records or nancial statements.

4 (iv)

Broker-dealer services.

4 (v)

Actuarial services.

4 (vi)

Internal audit services.

4 (vii)

4 (viii)

4 (ix)
5
5 (i)

78

Complied

3.4.

3.4.1 (i)

Compliance Status
Remarks
(Put in the appropriate column) (if any)

Any other service that the Audit Committee


determines.
No partner or employees of the external audit firms
shall possess any share of the company they audit at
least during the tenure of their audit assignment of
that Company.
Audit/certification services on compliance of
corporate governance as required under clause (i) of
condition No. 7
Subsidiary Company
Provisions relating to the composition of the Board
of Directors of the holding company shall be made
applicable to the composition of the Board of
Directors of the subsidiary company.

Not complied

Condition
No.

5 (ii)

5 (iii)

5 (iv)

5 (v)
6
6 (i)
6 (i) a)

6 (i) b)

6 (ii)
7

7 (i)

7 (ii)

Title

Compliance Status
Remarks
(Put in the appropriate column) (if any)
Complied

Not complied

At least 1 (one) independent director on the Board of


Directors of the holding company shall be a director

on the Board of Directors of the subsidiary company.


The minutes of the Board meeting of the subsidiary
company shall be placed for review at the following

Board meeting of the holding company.


The Minutes of the respective Board meeting of the
holding company shall state that they have reviewed

the affairs of the Subsidiary Company also.


The Audit Committee of the holding company shall
also review the Financial Statements, in particular

the investments made by the Subsidiary Company.


Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):
They have reviewed financial Statements for the year

and that to the best of their knowledge and belief:


These financial statements do not contain any
materially untrue statement or omit any material fact

or contain statements that might be misleading.


These financial statements together present a true
and fair view of the companys affairs and are in

compliance with existing accounting standards and


applicable laws.
There are, to the best of knowledge and belief, no
transactions entered into by the company during the

year which are fraudulent, illegal or violation of the


companys code of conduct.
Reporting and Compliance of Corporate Governance:
The company shall obtain a Certificate from a
Professional Accountant/Secretary (CA/CMA/CS)
regarding compliance of conditions of Corporate

Governance Guidelines of the Commission and shall


send the same to the shareholders along with the
Annual Report on a yearly basis.
The directors of the company shall state, in
accordance with the Annexure attached, in the

directors' report whether the company has complied


with these conditions.

79

Annual Report 2014

Green Banking
Report

Why Green Banking is necessary?


Human activities and natural events are responsible for
increasing average global temperatures and primarily by
increases in greenhouse gases, such as Carbon Dioxide
(CO2). A warming planet thus leads to a change in climate
which can affect weather in various ways. Global warming
and climate change refer to an increase in average global
temperatures. In this context in 1992, United Nations
Framework Convention on Climate Change (UNFCCC)
commits State Parties to reduce greenhouse gases
emissions, which is widely known as The Kyoto Protocol,
an international treaty. The Kyoto Protocol was adopted in
Kyoto, Japan, on 11 December 1997 and entered into force
on 16 February 2005. The Kyoto Protocol implemented
the objective of the UNFCCC to fight global warming
by reducing greenhouse gas concentrations in the
atmosphere to a level that would prevent dangerous
anthropogenic interference with the climate system.
Negotiations were held in Paris in 2014 to agree on a
post-Kyoto legal framework that would obligate all major
polluters to pay for CO2 emissions.
If we consider the impact of global warming, the
following things will come to the point. With rapid
climate change, one-fourth of Earths species could be
headed for extinction by 2050.
Climate change is already beginning to transform
life on Earth. Around the globe, seasons are shifting,
temperatures are climbing and sea levels are rising. And

80

meanwhile, our planet must still supply us and all living


things with air, water, food and safe places to live. If we
dont act rightly, the climate change will rapidly alter the
lands and waters and then we have to leave our children
and grandchildren in a very challenging situation.
Here some of the most dangerous consequences of
climate change, which will have impact on our life, or on
the places we care about.
1. Higher Temperature,
2. Changing Landscape,
3. Wildlife at risk,
4. Rising seas,
5. Increased risk of draught, fire and floods,
6. Stronger storms and increased storm damage,
7.

More heat related illness and diseases,

8. Economic losses.
1- The five hottest years on record have all occurred
since 1997.
Heat-trapping gases emitted by power plants,
automobiles, deforestation and other sources are
warming up the planet. In fact, the five hottest years on
record have all occurred since 1997 and the 10 hottest
since 1990, including the warmest years on record
2005 and 2010. High temperatures are to blame for
an increase in heat-related deaths and illness, rising
seas, increased storm intensity etc. During the 20th
century, the Earths average temperature rose one
degree Fahrenheit to its highest level in the past four

centuries believed to be the fastest rise in a thousand


years. Scientists project that if emissions of heattrapping carbon emissions arent reduced, average
surface temperatures could increase by 3 to 10 degrees
Fahrenheit by the end of the century.
2- Changing temperatures are causing vegetation
shifts and conservation challenges.
Rising temperatures and changing patterns of rain and
snow are forcing trees and plants around the world to
move toward polar region and up mountain slopes.
These vegetation shifts will undermine much of the
work the conservation community has accomplished to
date, with the potential to permanently change the face
of Conservancy preserves, local land trusts, and even
our national parks. In the tundra, thawing permafrost will
allow shrubs and trees to take root. In the Great Plains of
the United States, grasslands will likely become forests.
And New Englands fiery fall foliage will eventually fade
as maple and beech forests shift north toward cooler
temperatures. As plant communities try to adjust to
the changing climate by moving toward cooler areas,
the animals that depend on them will be forced to
move. Development and other barriers may block the
migration of both plants and animals.
3- Climate change could influence one-fourth of the
Earths species to be headed for extinction by 2050.
Rising temperatures are changing weather and
vegetation patterns across the globe, forcing animal
species to migrate to new, cooler areas in order to
survive. The rapid nature of climate change is likely to
exceed the ability of many species to migrate or adjust.
Experts predict that one-fourth of Earths species will
be headed for extinction by 2050 if the warming trend
continues at its current rate.
4- Sea level rise from climate change could displace
tens of millions of people.
As the Earth heats up, sea levels rise because warmer
water takes up more room than colder water, a process
known as thermal expansion. Melting glaciers compound
the problem by dumping even more fresh water into the
oceans. Rising seas threaten to inundate low-lying areas
and islands, threaten dense coastal populations, erode
shorelines, damage property and destroy ecosystems
such as mangroves and wetlands that protect coasts
against storms. Sea levels have risen between four and
eight inches in the past 100 years. Current projections
suggest that sea levels could continue to rise between 4
inches and 36 inches over the next 100 years.
5- Climate change is making floods, fires and
droughts more frequent and severe.
Climate change is intensifying the circulation of water

on, above and below the surface of the Earth causing


drought and floods to be more frequent, severe and
widespread. Higher temperatures increase the amount
of moisture that evaporates from land and water, leading
to drought in many areas. Lands affected by drought
are more vulnerable to flooding once rain falls. As
temperatures rise globally, droughts will become more
frequent and more severe, with potentially devastating
consequences for agriculture, water supply and human
health. This phenomenon has already been observed
in some parts of Asia and Africa, where droughts have
become longer and more intense. Hot temperatures and
dry conditions also increase the likelihood of forest fires.
6- Climate change will cause storms, hurricanes and
tropical storms to become more intense.
Climate change will cause hurricanes and tropical storms
to become more intense lasting longer, unleashing
stronger winds, and causing more damage to coastal
ecosystems and communities. Scientists point to higher
ocean temperatures as the main culprit, since hurricanes
and tropical storms get their energy from warm water.
As sea surface temperatures rise, developing storms will
contain more energy. At the same time, other factors
such as rising sea levels, disappearing wetlands, and
increased coastal development threaten to intensify the
damage caused by hurricanes and tropical storms.
7- Climate change brings health risks to the worlds
most vulnerable communities.
As temperatures rise, so do the risks of heat-related
illness and even death for the most vulnerable human
populations. Scientists have linked the deadly heat
waves to climate change and warn of more to come.
In addition to heat-related illness, climate change may
increase the spread of infectious diseases, mainly
because warmer temperatures allow disease-carrying
insects, animals and microbes to survive in areas where
they were once thwarted by cold weather.
8- Climate change is already affecting economies
around the world.
Declining crop yields could put hundreds of thousands
of people at risk for starvation. Climate change is
affecting businesses and economies at home and
around the world. If action is not taken to curb global
carbon emissions, climate change could cost between
5 and 20 percent of the annual global gross domestic
product. In comparison, it would take 1 percent of GDP
to lessen the most damaging effects of climate change.
Bangladesh Bank initiatives
We all are aware of the fact that the change in climate
has direct impact on biodiversity, agriculture, forestry, dry
land, water resources and human health. To safeguard

81

Annual Report 2014


the planet and its ecosystem from the adverse effect
of environmental degradation caused by rising carbon
emission, encroachment of rivers, improper disposal of
industrial, medical & household waste, deforestation,
loss of open space etc. Bangladesh Bank in line with
global norms has already introduced Green Banking
and sustainable practices for all scheduled banks of
Bangladesh and circulated a indicative policy guidelines
for Green Banking, vide BRPD Circular No. 02 dated
27, February 2011. Bangladesh Bank has declared the
following preferential treatments for the compliant banks:

Points to be awarded on management


component while computing CAMELS rating
resulted ultimately in overall rating of the Bank;

Top 10 (ten) Banks name will be declared in the


Bangladesh Bank website.

Consideration will be given while according


permission for opening new Branch of the
Bank.

The policy guidelines segregated the Green Banking


activities into 03 (three) phases for implementation.
Deadline of phase I was December 31, 2011; Phase II
was December 31, 2014 and Phase III is June 30, 2015.
Prime Bank Limited has completed all the assigned
tasks under phase I and completed all the activities
of phase II except formulation of Bank Specific
Environmental Risk Management Plan and Guidelines.
PBL already approached Bangladesh Bank for
introducing an environment friendly innovative green
product and publishing independent Green Annual
Report following internationally accepted format like
Global Reporting Initiatives (GRI) under phase III of
Green Banking activities.
Bangladesh Bank also, vide GBCSRD Circular No. 04
dated September 04, 2014 instructed all scheduled
banks to allocate 5% of its total funded disbursed loan for
Direct Green Finance under 47 (forty seven) refinancing
scheme product of Bangladesh Bank.
Prime Banks Commitment
As one of the leading commercial bank of the country,
PBL is committed to ensure proactive and prudent
management for the environmental degradation arising
from our business activities. We are also committed
to comply with the environmental regulation for
maintaining ecological balance and retaining the globe
safe habitable for all living beings and their future
generation. In compliance with Bangladesh Bank
guidelines, PBL has already formed Green Banking Cell
headed by the Chief Risk Officer (CRO). The Green
Banking Cell (GBC) has been formed with the task of
developing policies, planning and overseeing the overall
green banking activities of the bank.

82

As per GBCSRD Circular No. 08 dated December 24,


2013 the Risk Management Committee (RMC) of the
Board shall review the Banks green or environmental
policies, strategies and program for governing the overall
green banking activities of the Bank. Moreover, Prime
Bank Limited has formed dedicated Green Finance Cell
(GFC) for looking after all green financing issues only.
Beside this, formation of an independent Green Banking
Division is also under active consideration.
Besides, one of the strategic focuses of Prime Bank
Limited is going green, which includes but not
limited to efficient energy consumption, paperless
office, financing renewable energy etc. Prime Banks
achievements in green initiatives are detailed out in
green banking section.
Green Banking Policy
In light with Banking Regulations & Policy
Department, Bangladesh Bank vide their Circular
No.02 dated February 27, 2011; Prime Bank Limited
has outlined a comprehensive Green Banking Policy
for implementing Green Banking activities. During
the year 2014, a revised Green Banking Policy was
approved by the RMC of the Board.
Green Office Guide
The Bank has developed Green Office Guide and
circulated it to all employees for creating awareness
on green banking activities & providing instructions on
efficient use of energy, water, saving paper, etc. However
it is mentionable that, PBL is in process of introducing an
advanced Green Office Guide.
Incorporation of Environmental Risk in CRM
Prime Bank has incorporated the Environmental Risk
Policy in its Credit Risk Management Policy as part of
the due diligence review. The incorporation of the
environmental scanning to assess credit risk of the
borrowers has improved CRM principles significantly.
Prime Bank is allowing facilities to the client on the
condition of supporting environmental matters and
obtaining permission from the related environmental
regulatory agencies. Regular monitoring is being done
by the respective Credit officials for existing Customers.
Moreover, during the year 2014, the Bank has developed
Sector Specific Environmental Policies for Agriculture
Financing, Textile, Cement, Ship Breaking, Construction
& Housing, Chemicals (Fertilizer, Pesticides and
Pharmaceuticals), Sugar and Distillers.
Major In house Green Banking Initiatives taken by
Prime Bank Ltd
Several initiatives have been taken by the Bank with a
view to practice Green Management in the offices.

Efficient use of resources, reduction of waste, saving


energy and money shall definitely improve our working
environment. Some major In-house Environmental
Management initiatives are as below:
Solid waste management: 3R approach (Reduce,
Reuse and Recycle) has been advised for lowering solid
waste. However, careful management and disposal of
solid waste has been advised.
Energy & water management: The Bank advised the
officials to adopt energy and water efficient practices.
The officers have been advised to put emphasis to
ensure efficient use of gas, fuel, electricity and water
with a view to reduce carbon emission. Energy efficient
equipments like energy saving bulbs, products with
ecofriendly features are being used in the office.
Paper Consumption Management: Use of scrap or
one side used papers for note pad has become usual
practice in the workplace. One side used papers are also
used for printing draft copies of the office assignments.
In addition to that, the Bank has taken following initiatives
during 2014:
Arranging paperless Credit Review Committee
meeting (both SME & Corporate) by soft copy
presentation.
Most of the interbank correspondence is done by
email instead of letter.
Requisition for printing & stationery, office
stationery, printing of MICR cheque and pool car
are done by online requisition software.
The bank has successfully introduced a software
named E-DOC for Credit Administration Division,
which allows electronic archiving of documents
against loans along with reminder system for better
monitoring and control.
Trade Service Department has been centralized,
which ultimately reduces paper consumption.
Human Resource Division has successfully
launched online performance appraisal system.
During the year 2014, a software named Agenda
and Compliance Management Software was
introduced, which eliminated the process of
presenting paper based memo during the meeting
of the Executive Committee of the Board.
Currently nine (9) branches are well equipped
to arrange video conference which ultimately
reduces official travels and establishment of video
conference facilities between major distant offices
are under process.
Total number of branches were increased from 134
to 140, but our expenditure for stationery, printing
& advertisement was decreased by BDT 1.65 crore
which is 7.26% lower compared to previous year,.

Stationery, printing & advertisement expenditure


(amount in crore)
23
22.5
22
21.5
21
20.5
20

2013

2014

Number of branches
141

140

140
139
138
137
136
135
134

134

133
132
131
2013

2014

Renewable Energy Usage: Up to year 2014, The Bank


has already installed solar panels at 21 branches as
well as at 12 ATM booths and SME unit offices as part
of its commitment to the usage of renewable energy
resources.
Green Travel: PBL always encourage the officials to
consider Green approaches for any business travel
which reduce carbon emission. Moreover, use of public
transport and car pooling system has been advised by
Human Resource Division during 2014.
Online Banking and Internet Banking facilities
All the 140 branches of the Bank are providing online
banking facilities through its core banking system namely
Temenos T24. Fund Transfer to Other banks Accounts
through BEFTN has been made available through Online
Banking for the Consumer Banking Customers. As a
result, customers can execute fund transfer through
paperless and automated Online Banking over internet
to any other account in Bangladesh.
Prime Bank Limited has also offered a safe and
convenient Internet Banking, which is to accessible
24/7. By using real-time internet banking our customers
can avail the services like Balance enquiry, View account
statement, View loans & deposit of their own, Mobile &
Utility Bill Payment.

83

Annual Report 2014


Automated Teller Machine (ATM)
In addition to the Banks own 160 ATMs, the Bank has
joined National Payment Switch Bangladesh (NPSB)
network during the year 2014, which enabled the Debit
Cardholders of the Bank to enjoy cash withdrawal facility
from other ATMs under NPSB Network. Prime Bank has
used the BACH and BEFTN mechanism for convenient
payment activities which to a great extent supports the
concept of green banking.
SMS Banking facilities
Prime Bank also offers SMS Banking services to ensure
instant access to customers account information at
any time. Any mobile phone user having account of
Prime Bank can get the service through their mobile
phone upon subscribing. By using SMS banking our
customers can avail the services like Balance Enquiry,
Mini Statement, Exchange Rate, and PIN Change.
Biometric Smart Card based alternate banking
service
Prime Bank Limited in collaboration with Dipon Consultancy
Services introduced a Biometric Smart Card based alternate
banking service in the brand name Prime Cash for the unbanked rural and urban people to address their banking
and payment needs. Most importantly, it will provide
a fast, safe and simple mechanism for the un-banked
men/women across Bangladesh in all municipalities and
upazilas. The services that can be obtained through Prime
Cash are: Account Opening, Deposit, Withdrawal, Local
Money Transfer, Inward Foreign Remittance, DPS, Prime
Bank ATM Facility, Mobile Recharge, Salary Disbursement,
Balance Inquiry, and Mini Statement.
Cash Back Service
Cash Back Service allows the debit cardholders of the
Bank to meet instant requirement of cash through POS
terminals of selected merchant points while shopping.
Cash Back service meets instant requirement of cash
which ultimately increase customer satisfaction.
Capacity Building
Human Resource Training & Development Center of PBL
arranged 12 Green Banking training Programs for 403
employees during 2014 to familiarize with the Green
Banking aspects. In addition to that, officials of the Bank
attended various training programs/workshop/seminars
on Green Banking issues arranged by Bangladesh Bank
Training Academy.
Customer Awareness Program
The Bank arranged a customer awareness program in
Jessore on March 19, 2014 to create awareness among
120 participants to protect the environment from
different pollution and hazards.

84

Green Marketing
Prime Bank Limited is using their web portal for
advertising new products as well as the features of
existing products to capture the market and also it will
penetrate to get new customers. Moreover, customer
can contact the respective desk to get more information
in this regard. PBL, also convey the various offers of
different Credit Cards through SMS.
Green Financing
The Green Finance Cell of PBL was formed exclusively to
look after the Bangladesh Bank enlisted green financing
products. PBL financed various projects which are
environment friendly. During 2014, the bank has extended
finance of BDT 6,757.46 million in 24 projects having ETP. The
bank has further strengthened its green banking initiatives
by financing environment-friendly Hoffman Kiln and Zigzag
based automated brick fields, which contribute towards a
greener climate. PBL has also disbursed 32.00 million to set
up 4 (four) Hybrid Hoffman Kiln (HHK) projects.

Green Finance
Amount in million

8000

6757.46

7000
6000
5000
4000
3000
2000
1000

448.77

0
2013

2014

Disclosure and Reporting of Green Banking Activities


PBL has been regularly reporting its Green Banking
Activities to Bangladesh Bank on quarterly basis since
2011. In view of highlighting our Green Banking activities
and creating awareness amongst the stakeholders, a
separate section has been incorporated in our Annual
Report and Banks official website for disclosing our
Green Banking activities.
Management Approach towards Green Banking
The Banks continuous effort to uphold Green Banking
serves as the fundamental base for reduction of
carbon footprint impact. The Bank has been vigorously
supporting sustainable Green Finance. The Bank adopts
processes to assess the environmental and social risks
and opportunities arising from its clients business
activities and manages the Banks exposure to reduce
its own carbon foot print on the environment as per
Environmental Conservation Rules (ECR) 1997 and
Environmental Risk Management (ERM) Guidelines of
Bangladesh Bank.
Way Forward
PBL is committed to build a sustainable business
that brings benefit to the society, environment and
the economy of Bangladesh. Some future planning
regarding Green Banking are Increase Green Finance for installing solar energy
plant, bio-gas plant and other renewable energy
plants, bio-fertilizer plants, Effluent Treatment Plant
(ETP), Hybrid Hoffman Kiln projects for the production

of brick etc. at lower interest and utmost care.


Proposed necessary budget allocation for Direct
Green Financing as per GBCSRD Circular No. 04
dated September 04, 2014 and committed to
finance in Direct Green Finance products in coming
days.
Finance in the economic activities at flood,
cyclone and drought prone areas without charging
additional risk premium.
Now a days, Alternative Delivery Channel (ATM,
Debit / Credit Card, Internet Banking, BACPS, BEFTN,
SMS Banking, Bio-Metric Smart Card, Cash Back
service) are ensuring modern banking facilities and
PBL will introduce more creative services through
Alternative Delivery Channel.
The Banks remote branches will join meeting
through Video Conference rather than physical visit.
Already solar panels have been installed in some of
our branches, ATM booths & SME Unit Offices and
we are expecting to expand the volume.
Continuously monitor the inventory details such as
consumption of water, paper, electricity, gas, fuel
etc. to reduce the consumption of the same and
ultimately protecting the environment.
Arranging Training/Workshop related to Green
Banking for both our employees & our customers and
committed to continue the same in coming days.
Planned to arrange more seminars to create
customer awareness regarding Green Banking as
well as to avail Green Products.

85

Annual Report 2014

management team

86

Senior
Management

Habibur Rahman
Deputy Managing Director

Ahmed Kamal Khan Chowdhury


Managing Director & CEO

Md. Golam Rabbani


Rahel Ahmed
Deputy Managing Director Deputy Managing Director

87

Annual Report 2014


Managing director
Ahmed Kamal Khan
Chowdhury
Deputy Managing Director
Habibur Rahman
Md. Tabarak Hossain Bhuiyan
Md. Golam Rabbani
Rahel Ahmed
Senior Executive Vice
President
Md. Ezaz Hossain
Md. Iqbal Hossain
Kazi Mahmood Karim
Md. Anwarul Islam
Mohammed Ehsan Habib
Hasan Mohiuddin Bhuiyan
A. S. M. Khairuzzaman
A. O. M. Rashed
Executive Vice President
Shahidur Rahman Khan
Farhad Uddin
Sk. Matiur Rahman
Muhammad Anowarul Islam
Md. Mashiur Rahman
Abu Zafar Md. Sheikhul Islam
Md. Shahadat Hossain
Md. Shahjahan Majumder
Md. Shahin Alam
Abu Ashraf Siddique
Md. Iftekhar Uddin
Ferdousi Sultana
Nuhal Ahmed Choudhury
Mohammad Jashim Uddin
Jaoharul Haq Shahedi
Md. Omar Kabir
Mohd. Muin Uddin Latif Hasan
Raquibur Rahman
Syed Tofail Ali
Khondoker Fazle Haider
Abdus Salam Khan
S. H. Mukhter Ahmad
Senior Vice President
Sarqume Mohd. Kabir
Kazi Tozammel Huq
A K M Kamal Uddin
Mohd. Afzal Hossain
Md. Mahiuddin Ahmed
Syed Sahadat Hossain
Imtiaz Ahamed Bhuiyan
Mozammel Hoque
Md. Anwarul Islam
Md. Amzad Hossain
Syed Md. Nazmul Huque
Md. Shahidul Alam
Mir Md. Hassanul Zahed
Mohd. Jamil Hossain
Md. Tarique Parvez Jewel
Md. Moniruzzaman
Anwarul Hoque
Md. Salah Uddin
Md. Amir Hossain Majumder
Wasequddin Ahmed
Chowdhury
Farhad Ahmad Khan

88

Muhammad Muzahid Hossain


Kazi Zillur Rahman
Taher Jamil
Syed Shafqat Rabbi
Md. Shaiful Hossain
Md. Abdul Matin
Md. Safiul Amin
Md. Milon Miah
A B M Habibur Rahman
Mohammed Abul Kalam
Kamruzzaman Khairul Kabir
Syeda Nazma Parvin
Md. Abul Kasem
Syed Fakhre Faisal
Md. Shahidul Hoque
Md. Ramiz Uddin Miah
Md. Giash Uddin
Mohammed Zakaria
Md. Shamsuddin
Md. Habibur Rahman
Nurul Momen Khan
Vice President
Mohammad Aminul Islam
Md. Moniruzzaman
Md. Hafizur Rahman Mallick
Md. Toufiqur Rahman Ayeni
Sharif Uddin Choudhury
Md. Omar Faruque
Md. Golam Haider
Md. Shah Alam Howlader
Ashraf Uddin Ahmed
Dewan Arfanul Alam
Md. Ibrar
Masudur Rahman
M A Mubin
Shamsher Jamal
Mohammad Yaqub
Mostafa Hasan
A N M Baki Billah
Morshed Ahammed
Md. Rezaul Haque
Amirul Alam Chowdhury
Md. Reza Hossain
Md. Abdul Quddus
Md. Amanullah
Md. Abul Kalam Azad
A S M Azizul Karim
Harunur Rashid Chowdhury
Md. Firdous Alam
Mohammad Nazim Uddin
Bidyut Kumar Das
Md. Nur-A-Kaosar
Md. Hasanuzzaman
M. M. Emranul Hoque
Mehedi Hasan
Chowdhury Fakhruddin
Mahmud Siddique
Mohammad Masud Shahjahan
Mohammad Aminur Rahman
Faisal Nurul Amin
Md. Kabirul Hasan
Md. Shahidul Islam
Mollah Farid Ahmed
Kazi Azharul Islam
Md. Jafar Hasan
Md. Showkat Kamal Sarker
A K M Enamul Haque

Md. Abdul Bari Mollah


Abu Taher Md. Zakaria
Dorothy Sultana
Ali Mohammad Nurul Huda
Md. Mozahid Kabir
Md. Khaled Anwar
Md. Mamunur Rashid
Zahed Iqbal
Md. Mahbub Alam
Saif-Ul-Alam Md. Al-Amin
Senior Assistant Vice
President
Md. Ahsan Habib
Ajmal Hoque Chowdhury
Md. Kamrul Islam
Md. Yusuf Ali
Sharmin Akther
Giash Uddin Ahmed
Md. Ziaul Latif
Abdul Mannan Khan
Farid Ahmed
Syed Tazul Islam
S M Khurshed Alam
Kazi Moinul Haque
Md. Aminur Rahman Akanda
Sirajul Hoque
Debashis Chakraborty
Mohammed Abu Shayem
Md. Arman Uddin Bhuiyan
Md. Taj Uddin Ahmed
Md. Syadur Rahman
Md. Iqbal
Hasan-Ul-Huq
Tofail Ahmed
Md. Ruhul Quisth
Farid Ahmed
Mohammad Khurshid Alam
Sayed Delwar Hossain
Md. Abdur Raafi
A. K. M. Shahnur
Sharmin Ahmed
Md. Saidur Rahman Dipu
Md. Nazrul Islam
K. M. Sakhawat Hossain
Md. Rashaduzzaman
Nahida Sultana
Sabina Rahman Khan
Md. Alamgir
Md. Ariful Hoque
Md. Rabiul Islam
Md. Rezwan Uddin Swhel
Md. Nazrul Islam
Florence Sutopa Majumder
Kamrun Nahar
Md. Mainul Kabir
A K M Abdul Alim Ibne Khabir
Ekram Ullah Chowdhury
Mohammad Jahangir Bhuiyan
Nazrul Islam
Nehal Hossain
Md. Moinul Hasan
Mohammad Ashrafuzzaman
S M Parvez Kabir
Md. Nuruzzaman
A T M Ahsan
Syed Mahammed Ali Suhel
Md. Emdad Hossain

Assistant Vice Presedent


Iqbal Haider
Afzalun Nahar
Md. Rabiul Ahasan
Mohd. Baqui Billah
Md. Nasir Uddin
Siddique Ahmed
Md. Mobasshirul Islam
Amal Chandra Basak
Md. Mizanur Rahman
Mohammad Shawkat Ali
Mohammad Nazmul Hossain
Mohammad Kamal Uddin
A H M Be-darul Alam Goni
S M Shahidul Islam
Shah Mohd. Zakir Hossain
Md. Touhiduzzaman
Quazi Anwarul Azim
Md. Hashmot Ali Mollah
Shah Mohammad Mohsin
Mohammad Anisur Rahman
A K M Khairul Basher
Masood Mizan
Rupan Kanti Paul
Nazneen Akhter
Shamima Pervin
M Faroque Hossain
Suhrawardy
Mohammad Raihan Shaheed
Mohammad Sazzad Hossain
Shahid Uddin Ahmed
Munshi Abdus Salim
Giash Uddin Ahmed
S M Shahidul Islam
Masud Uddin Ahmed
Sultan Mahbubul Haque
Muhammad Mahmud Hasan
B. M. Shahrier Majumder
Kazi Muhammad Rezaul Karim
Md. Fazle Rabby
Md. Ariful Islam
Md. Abu Sayeed
Mohammad Mamunur Rahman
Sifat Ahmed Chaudhuri
Md. Hasan Jamal
Mohammad Badrul Anam
Shubir Kumar Barua
Salah Uddin
Md. Rubait Tauhid Siddique
IftIkhar Ahmed Chowdhury
Md. Walidul Islam
Md. Saidur Rahman
Md. Rezaul Karim
Md. Adil Uddin
Mohammad Rafiqul Islam
Md. Mobinul Haque
Mohammad Sazzad Hossain
Khan Md. Abu Muhit
Md. Saiful Hasan
Md. Faridul Islam
A K M Humyun Kabir
Ashis Bhattacharjee
Mohammad Shakhawat Hossain
Mohammad Mamunur Rashid
Mahmood Khan

Management
Committee

Asset Liability
Committee

89

Annual Report 2014

Management
Teams

Agriculture Banking

Alternative Delivery Channel


(ADC)

Anti-Money Laundering

90

Audit & Inspection Division

Board Secretariat

Card Division

Cash Management Department

91

Annual Report 2014

Centralized Clearing Cell

Corporate & Public Affairs


Relationship Division (C&PARD)

Corporate Banking Division

Credit Administration Division


(CAD)

92

Credit Risk Management (CRM)

Facility Management Division


(FMD)

Financial Administration
Division (FAD)

Human Resources Division


(HRD)

93

Annual Report 2014

Information Security Division


(ISD)

Internal Control & Compliance


Division (ICCD)

International Division (ID)

Islamic Banking Division

94

IT Infrastructure & Planning


Division

IT Operations Division

Legal Division

Marketing Division

95

Annual Report 2014

Monarch

Operations Division

Recovery Division

Research & Development (R&D)

96

Retail Banking Division (RBD)

Retail CRM Dept

Risk Management Division


(RMD)

SME Banking

97

Annual Report 2014

Structured Finance Department

T-24 Upgradation Project

Trade Services Division (TSD)

Treasury Division

98

SME Branches
Network

Islamic Banking
Division

Card Division

M-Commerce

ADC
Department

Retail Banking
Division

SME Credit

SME Banking
Division

Head of Small Medium


Retail

Chief Officer Emerging


Market & DMD

Treasury
Front office

H.O. Corporate
Banking Team

Branch Managers
Corporate Banking

Head of Wholesale
Banking Division

Chief Business Officer


(CBO) & DMD

Units

Corporate
Liability
Marketing

Lease Finance
Unit

Export Finance
Unit

Department

General Credit
Unit-2

General Credit
Unit-1

Treasury
Mid-Office

Risk Management
Division

Credit Admin
Division

Board
Secretariat

Operations Division

Recovery Division

Legal Division

IT Operations
Department

Agriculture Support

International Division

Chief Financial Officer


(CFO)

Proprietary
Investment
Department

IT Audit
Department

Compliance
& Monitoring
Department

Internal Audit
& Inspection
Department

Chief Officer Finance


& Global Business
& DMD

(Financial Admin Division)

Chief Operating Officer


(COO) & DMD

MDs
Secretariat

Facility Management
Division (Previously
L&SSD)

Trade Finance
Centralization
Department

Retail BankingCRM Department

Credit Risk
Management
(CRM) Division

Chief Risk Officer


(CRO) & DMD

Managing Director

Chairman of the Board


of Directors

Anti Money
Laundering Cell

Capital Market
Division

Internal Control &


Compliance Division

Marketing Division

Research
& Development

Project Management
Office

Human Resources
Division

IT Infrastructure &
Planning Department

Brand
Communication
Department

Public Relations
Department

Strategic Planning
& Business
Promotion Dept

Chief Internal Control


& Compliance Officer
(CICCO) & DMD

Corporate Organogram of
Prime Bank Limited

99

Annual Report 2014

Group Corporate
Structure
Prime Bank Investment
Ltd. (99.99%)
Bangladeshi
Companies
Prime Bank Securities
Ltd. (95%)

Prime Bank Limited

Prime Bank Exchange


Co. Pte. Ltd. SIngapore
(100%)

Overseas Companies

Prime Exchange (UK)


Ltd. (100%)

Prime Finance (Hong


Kong) Ltd. (100%)

100

Management
Discussion & Analysis
The countrys scheduled banks in the year 2014 showed
a diverse performance as some banks posted well
operating profits while other banks lost their success
due to the political instability in the country. The banking
sector faced hardship during the year with the political
situation, which led to low pick up of investments and
in the long term led to low credit growth through the
year. Domestic credit growth only grew by 11.6 percent
till June 2014, and has not been significantly high by the
end of the year. Both credit to the public and private
sector have been sluggish throughout the year, which
did not help the banking industry. Lower credit growth
with increasing NPL has made it a difficult year for all
banks in Bangladesh. Export receipts advanced up
by 17.65 percent in December 2014 over November,
recording a 1.56 percent growth in July-December 2014
compared to the same period in 2013. Import payments
based on shipment data increased by 16.64 percent
during July-November 2014 over the equivalent period
in 2013. Import L/C opening data ascended by 14.77
percent during July-November 2014,which suggests
imports may be high in the upcoming year. Treasury
operations were successfully managed in the last year
which achieved profits similar to last year.

banking software Temenos-T24, a world class


technology platform

Expansion of ATM service and KIOSK

Internet Banking, SMS Banking and Phone


Banking

Credit Cards Launching of JCB Credit (Classic


& Gold)

Consumer finance - Launching of Shukonna


for women only

Small & Medium Enterprise (SME) finance

Syndicated financing

Merchant Banking activities through Prime Bank


Investment Limited (fully-owned subsidiary)

Brokerage activities thought Prime Bank


Securities Limited (fully-owned subsidiary)

Strong framework for Corporate governance


and CSR activities

Initiated a paperless Credit Committee

Organized an event for Green Banking only for


the first time in Bangladesh

Strong Management team and skilled HR

Wide customer base all over the country

Growth of foreign exchange business despite


slow economic situation

Continuous expansion of branches throughout


the year

Diversified product base

What we did well

Excellent Brand Image

Network of 122 branches and 18 SME


branches at strategic financial centers all over
Bangladesh

Deep market penetration and continuous


growth in corporate, commercial and trade
finance sectors

Good market share and healthy financial


performance

Islamic banking products and


including Islamic Credit Cards

Off-shore banking units in major EPZs

Exchange House (fully-owned subsidiaries) at


Singapore and UK for remittance business

PBL Finance (Hong Kong) Ltd., a fully owned


subsidiary for financing and remittance
business

Real-time

online

banking

services

through

core

Corporate
Banking
Division
In line with the countries movement towards developing
the country from its present rank, Prime Bank Limited
branded itself as the countrys leading corporate base
by providing a wide range of financial services, products
and offering specialist advice to corporate clients to meet
assorted demands of shifting market scenario as well as
emerging markets. PBL has enhanced its footprints into
Edible Oil Refinery, Vessel financing, Packaging, Food,

101

Annual Report 2014


Power, Construction, Glassware, Healthcare, Renewable
Energy, Plastic Polymer, Telecommunications, AgriBusiness (Poultry, Food Processing), etc. in addition to
traditional industries like RMG, Steel, Pharmaceuticals,
Textiles, Ship Breaking & Trading sector.
Corporate Exposure

rs
he
Ot

Professional and
Miscellaneous
Services 4%

14
%

Housing Servi

ces 10%

5%

s1

ction
Constru

9%

ice

v
er

eS

ad

Tr

Industry 43%

Transport, Storage &


Communication 4%

Power, Gas, Water &


Sanitary Services 1%

Exposure under Industrial Loan

RM
tile
Tex

1%

)2

ills

gb

din

18%

clu

(in
Others 8%

Pharmaceutical 3%

al
er
in

ng

m
ic
all 2%
t
e 1
m s
n- uct
No rod
p

Ship breaking 3%

turing 11%
Food manufac

Ship Building 2%

Ot
ind her m
us
trie anu
s 7 fact
%
uri

Rubber
products 2%

Basic metal products 13%

Corporate Banking Division provides services to its


corporate clients through six wings namely (i) Headline
Banking Business Group (ii) General Credit Unit (iii)
Export Finance Unit (iv) Structured Finance Department
(v) Lease Finance Unit and (vi) Corporate Liability
Marketing and Cash Management Unit.
Brief description of other units under Corporate Banking
Division is as under:

Headline Business Banking Group


Headline Business Banking Group usually deals with
the top-ranking customers of Prime Bank Limited.
Now-a-days it is very challenging to maintain a smooth
business relationship with large corporate customers as
there is huge competition in the market. With the fast

102

changing business environment, the demand of service


from the customers end is increasing exponentially
day by day. PBL believes in keeping pace with the fast
changing business era. With an aim to maintain the
best possible relationship and to provide most custommade services to its top-ranking customers, PBL has
formed a new Business Unit named Headline Business
Banking Group (HBBG) under Corporate Banking
Division. HBBG is unlikely to the other Business Units
of Corporate Banking Division, which process and
analysis the credit proposals. The additional feature of
this unit is a dedicated team of Relationship Managers.
In HBBG, there is a team of dedicated credit analysts
who process the credit proposals received from
different branches of Dhaka and Chittagong only and
places these proposals for approval after complying
with regulatory issues and guidelines. Furthermore, the
unit is engaged in maintaining value based relationship
with top-ranking customers along with analysis of
credit proposals. The dedicated Relationship Managers
team regularly gives drive for new customers booking
and maintains relationship with existing top-ranking
customers in connivance with branches. The dedicated
Relationship Managers are also engaged to manage
the relationship with customers to understand and
to cater the customers needs on a priority basis and
to extend co-operation to credit analyst. HBBG deals
with array of products e.g. L.C, LTR, BG, LIM, Overdraft,
Time Loan, PC, Long Term Long, Bid Bond, SOD (W), PG
and APG. HBBG has customers from different sectors
like Commodity, Tobacco, RMG, PTS (Primary Textile
Sector), EPC Contracting, Cement, Steel, Engineering
and Electronics.

General Credit Unit (GCU)


General Credit Unit was formed considering the nature
of credit appraisal and type of clients. General Credit
serves through two units, one is GCU-1 and another is
GCU-2. These units handle proposals other than Export
and Lease & Structured Finance.
Currently these units are dealing with essential
commodity trading and processing, construction,
pharmaceuticals, telecommunications, real estate, work
order financing (for construction of roads, highways,
bridges, jetty, embankment, rehabilitation and new
construction of railway lines etc.), ship building, ship
breaking, manufacturing and steel re-rolling, renewable
energy, health etc. The experienced and trained officials
of GCU team handle credit proposals and are engaged
with processing the proposals while complying
with regulatory issues and guidelines under a welldefined structure. After getting request/proposal from
branches, proper scrutiny is done by GCU and then it

places it to the competent authority for approval. GCU


has been maintaining an enviable standard of credit
processing. Team members also keep communication
with customers from Head Office end to get more
understanding on business needs, so that the proper
banking solution can be provided.

Export Finance Unit (EFU)

During 2014, SFD successfully arranged additional


syndication loan of BDT 1,120.00 million for Sea Pearl
Beach Resort & Spa Ltd. and arranged fund of BDT
630.00 million out of total syndication debt of BDT 850
million for Mehmud Industries Ltd., a concern of Anwar
Group. During this period, SFD earned fee income of
around BDT 30.00 million from syndication and bilateral
project financing.

Prime Bank Ltd. has a sizable portfolio in Export financing


to support the growing and important textile and
Readymade Garments (RMG) sectors of the country. The
Unit was formed to take challenge of serving exporters with
a specialized team to add value and support 100% export
oriented customers. Export contributes around 21% of
Countrys GDP and readymade garments contribute 81%
of the export earnings. Home Textile, Sweater, knit and
other specialized factories are getting prompt support
to get various banking services and assistance from this
unit. With 28 Authorized Dealer (AD) branches and 3 Offshore Banking Units (OBUs), PBL is well equipped to serve
the countrys export oriented industries. RMG Monitoring
Team has been set up under Export Finance Unit for
better understanding & monitoring of the business and
quick transaction support.

Lease Finance Unit

Structured Finance Department

Lease Finance unit under Corporate Banking Division


is also taking care of the NBFI (Non-banking Financial
Institution) and finance to the reputed and sound
institutions considering growth and NPL position.

Structured Finance Department (SFD) deals with project


finance both bilateral projects financing and financing
through loan syndication. It covers every sector of the
economy with a focus on infrastructure, industrial and
service sector projects under the umbrella of Corporate
Banking Division.
In addition to conventional projects, the Bank is keen
to support governments initiatives for electricity
generation through financing power projects. As part
of this initiative, Bank provided bridge finance to 341
MW Summit Bibiyana II Power project, the largest
Independent power project of Summit Group.
SFD also arranged fund from Japan International
Cooperation Agency (JICA) under Bangladesh Bank
refinance scheme for one of its customer namely Bengal
Remedies Ltd.
SFD was also involved in the process of availing long
term Senior Debt of USD 25 Million from Nederlandse
Financierings-Maatschappij Voor Ontwikkelingslanden
N.V. (FMO) in collaboration with International Division of
the Bank.

With a view to further strengthening and making it


more effective, the bank has formed a separate Lease
Finance Unit under Corporate Banking Division which
commenced operation since 2001. Leasing is a method
of financing for acquisition of capital machinery/
equipment/vehicles involving a contractual relationship
in which the Lessor grants exclusive right to the Lessee
to use the machinery/equipment for a stipulated period
of time in exchange of a series of rentals. Thus, leasing
enables the lessee to avail the uses or services of a
machinery/equipment without investing his own fund.
Lease Finance yields comparatively higher rate of return.
Moreover, lease financing is a secured form of credit as
the bank retains the ownership of the leased items.

Lease Finance Unit of the Bank undertakes the following


activities:
I. To diversify credit portfolio for minimizing
investment risk.
II.

To add more value to the investment since yield


is higher comparing other mode of finance.

III. To reap the benefit as a financial service


provider having an edge over other leasing
companies operating in the country, who
have to tap resources from banks at a bit
higher price.
IV. To take an effective role in the industrial
development of the country.
V. To help generate employment opportunities
by providing financial assistance to different
projects promoted by entrepreneurs and
professionals.
At the end of the year, 2014, the lease finance portfolio
of the Bank stood at Tk. 4.90 billion. Prime Bank Limited
offers lease finance facility against the following items:
a.

Capital Machinery required for industrial unit;

103

Annual Report 2014


b. Capital Machinery required for BMRE of the
existing industrial units;
c. Medical Equipments for Clinics, Pathological
Laboratories, hospitals etc.;
d. Elevators, Central Air Conditioners, Generators
etc. ;
e. Vehicles including luxury coach, bus, minibus,
micro-bus trucks etc. &
f.

Construction Equipments

Apart from this, the Bank extended loans to 12 NonBanking Financial Institutions (NBFIs) against which total
outstanding was Tk. 1.52 billion at the end of the year
2014.

Corporate Liability Marketing and Cash


Management Unit
Corporate liability marketing and cash management
serves as the means to keep an organization functioning
by making the best use of its cash or liquid resources.
At present the department is regularly sourcing cash
management business from Govt. agencies, Large local
corporate, MNCs, NBFIs, Universities, Schools, TELCOs,
Banks, NGOs, etc. Cash management solutions thus help
customers in managing liquidity, payments, collection,
reconciliation and MIS. Prime Bank has leveraged
collection and payment services in different sectors of
the country. In addition, the team also provides a wide
range of corporate fund management solutions for
business houses using the most vibrant technology in
Bangladesh.

Agreement with PRAN - RFL Group for Nationwide distributors payment


collection service

SME Banking
SMEs play a dominantly important role in the national
economy of Bangladesh by making up over 90 per cent of
industrial enterprises, providing employment to industrial
workers and contributing industrial value addition to
gross domestic product (GDP). The relative SME share
in manufacturing value-added is much higher than the
manufacturing industries sector. Further, as important
sources of new business are created and developing new
entrepreneurial talents arise, these industries provide

104

the much needed dynamism and vitality to the national


economy. Rapid and sustainable growth of SMEs is
undoubtedly one of the vehicles for accelerating national
economic growth to the point of having a measurable
impact, in the way of reduction of poverty, unemployment
and creation of more job opportunities. Generally, SMEs
are labor intensive with relatively low capital intensity and
possess a character of privilege as cost effective and cost
competitive in nature.
Bangladesh Bank has formulated SME policy strategies
to assist in achievement of the goals and targets of
the Millennium Development Goals (MDG) set by
the Government. Accordingly, Bangladesh Bank has
formulated/introduced/undertaken different schemes
for new entrepreneurs, physically challenged persons,
creative writers, green entrepreneurs etc with special
funds to provide refinance to banks and financial
institutions against lending to CMSEs.
Keeping this in view, Prime Bank Limited has formulated
a comprehensive policy on SME financing and made
significant progress in financing this sector and the Bank
is offering congenial lending products and services so
that SMEs can aspire to opportunities of growth and
wealth generation.
Prime Bank Limited has been operating SME business
as one of the market leaders in Bangladesh successfully
since 1995. For efficient SME operation, the division
adopted centralized operating practices from the
inception by developing need-based, market oriented
and transparent check & balance working models.

The Board has approved SME Financing Policy


in its 318th meeting held on 20.04.2009.

Established a centralized SME Banking Division


on July- 2009 and dedicated SME desk in all
Branches.

Separate SME dedicated desk for Women


Entrepreneurs.

Separate monitoring team for SMEs.

Separate team for selling loan and collecting


deposit through SME products.

Special Credit Risk Management team for SME


Banking.

Different trainings for SME officials as well as for


entrepreneurs.

Commission/incentives
based
on
the
performances of Direct Sales team, Dedicated
collection team for SME loan.

Customized products and services for SME.

Establishment of 18 SME/Agri Branches at


different places in Bangladesh.

Developed 8 (Seven) SME loan products.

Developed clusters under area approach


method etc.

Dedicated Green Officer in all Branches.


Sector-wise SME Outstanding

ice
rv
Se 18%

Geographical-wise SME Outstanding


Trade 52%

ln
Khu

Ra
jsh

Rangpur
3%

ah
i

Sylhet 3
%

Size-wise SME Outstanding

9%

a 9%

g
urin
cut %
a
f
nu 30
Ma

In 2014, Prime Bank has participated in an agreement


with Bangladesh Bank for Refinance scheme for Startup
Business. Therefore PBL is a party to various refinance
programme executed with Bangladesh Bank for making
available easy finance to SME sector. So far Prime Bank
received Tk. 4,000 lac against 900 clients from various
re-finance scheme of Bangladesh Bank.

Dhaka
59%

g
gon
itta 17%
Ch

o
Mic r
7%

PBL Re-Finance availed in diff schemes


en
om
-W %
88 18

products to wider range of customers and providing


working capital and term loan to different manufacturers,
traders and service providers including backward and
forward linkage industries that fall within the purview of

JICA
11%

AB
DF
32 und
%

Prime Banks strategy is to focus on marketing the

l
era
Gen
B
B
36%
3%

Small
53%

P
8M
G
E

Medium
40%

SME segment.
Banks exposure is thus well diversified among 5,600
customers to different sectors viz. cottage, handy crafts,
power loom, auto parts, garments accessories, rice mills,
light engineering, commodity financing, textile mill,
permitted brick field, ship breaking/ scrap iron, poultry
farming, fish processing/ dry fish, animal feed, agrobased and agro-processing industry, furniture, hospital
/ diagnostic center, packaging industry, leather goods
sector, jute goods and jute-mixed goods, computer
software and ICT goods, green financing-renewable
energy etc.
Prime Bank is operating SME business through 18 SME/
Agri. branches as well as through Direct Sales Executives
deputed at conventional branches all over Bangladesh.
Besides, the branches network consisting of 122
branches is playing a significant role in developing the
SME sector.

Prime Bank introduced different customized products


tailored to needs of SMEs namely i) Sahaj Rin ii) Chalti Rin
iii) Moushami Rin iv) Digun Rin v) Anchol Rin vi) Prodip vii)
Prime Subidha & viii) Srijon Rin. Upcoming products: Prime
Sohayok Rin for for the benefit of persons with disabilities
and product for startup business.

Capacity Building Activities


Prime Bank puts its efforts for the development of
their SME position by organizing in various training,
workshops, seminar, and symposium to build capacity
and awareness among the staff as well as SME
Entrepreneurs. In 2014, in such endeavor, Prime Bank
HRTDC imparted training to 494 staffs through different
sessions for capacity building and awareness. Moreover
the management of the Bank has also affirmed that the
all conventional branches should be treated as SME
branches.

105

Annual Report 2014

Prime Banks Workshop on


SME Delinquency Management

this sector; it is consistently putting an increasing focus


on the development of SME sector in the line with the
guidelines of Bangladesh Bank.

Prime Bank - HRTDC organized a day long workshop


on SME Delinquency Management at a local hotel
in Dhaka on 12th April, 2014. Mr. Robert Patterson,
Canadian CA. former Banker and project advisor
INSPIRED, Bangladesh conducted was coordinated
the program. SEVP and Head of SME Banking Division
Kazi Mahmood Karim and Senior officials of the Bank
attended the workshop.

During the year 2014, the Bank has participated in


different local or international seminars, fairs like
Women Entrepreneur fair on 13-Mar-2014 organized by
Bangladesh Bank, International Seminar on Sustainable
SME Development on 30.04.2014 organized by CIRDAP,
Women Entrepreneur Fair on 22-Jun-2014 organized
by For the women and by the women forum, and SME
Financing Fair on 12-13 November, 2014 combinedly
organized by SME Foundation and Bangladesh Bank.
Moreover, in order to emphasize on push marketing
the bank has implemented Direct Sales Team. This has
helped PBL to penetrate the market further and make
available finance to the door steps of small and medium
enterprises.

Financing women entrepreneurs under SME


Another notable idea in SME financing is the
development of women entrepreneurs. In the new
framework of SME, Prime Bank is giving top priority in
developing and harnessing women entrepreneurs. Bank
has designed a separate product Anchol for women
entrepreneurs. In order to empower the Womenfolk,
Prime Banks Workshop on SME Delinquency Management

bank has already disbursed SME loans to 163 women


entrepreneurs at lower interest rate. This has made

SME Marketing Strategy


Prime Bank Limited is relentlessly working to ensure
a vibrant national economy through financing in the
SME sector. During the year Bank has been taken
several initiatives conducive to the overall growth of

SME Financing Fair-2014 at Pan Pacific Sonargaon Hotel

106

considerable scopes for employment opportunities as


well as entrepreneurship motivation among the women
business community. During the year bank has been
actively participated in different women fairs organized
by different stakeholders.

Anchol Rin to Women Entrepreneur

Women Entrepreneur Fair 2014 organized by Bangladesh Bank at


Ruposhi Bangla Hotel

SME Financing Fair-2014 organized by SME Foundation and


Bangladesh Bank at Pan Pacific Sonargaon Hotel

Project Pictures of SME Loan financed by Prime Bank

Textile (Bed Sheet production)

Rice Mill

Textile (Grey Cloth)

Handicraft

107

Annual Report 2014

Borni Handicraft

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108

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RETAIL
BANKING
DIVISION
Retail Banking Division plays a momentous role in
the Bank by securing a large base of customers,
deposits and lending. It also prepares the retailbanking business for far-reaching transformations in
its operating environment, organizational structures
and customer dynamics by facilitating the innovation
of retail products and services in the market.
Through delivery channels like Asset and Liability Teams,
Retail Value Center, Premium Banking, Service Quality
and Payroll Services the division wires the changes in
the retail banking business. Each and Every member
under this umbrella, contributes to implement a shared
vision of the business, and optimizes the pooling of
resources and building a sound portfolio to the epitome
of excellence.
2014 showed the tremendous value of the breadth and
diversity of divisions earnings profile, and it has seen
continued evidence of the strong fundamentals which
are essential for longer term growth.
After a successful year in 2014, the Division has much
more to do; expecting that the operating environment
to remain challenging. But, there is every reason to feel
positive and confident about the prospects that this
Division will make over the Prime Bank Ltd. as a bank

Service means ensuring the clients and customers


that they are always uppermost for the division.
Excellence and Innovation call on to use energy, skills
and resources to deliver great service for customers
and clients and outstanding sustainable results for
shareholders.
Stewardship is about being determined to leave
things better than to find them, so it constantly
strives to improve the way to operate as an
organization and the impact it has on society.

Our Customers
The division seeks to support the day-to-day banking
needs of the customers who can be categorized as:
Personal
Premier/High Net Worth Customers

What we offer to them


Retail Banking Division focuses on providing banking
services by enabling customers to be serviced in ways
that best suit their needs:
Retail Deposit Products (including current
accounts, savings and payments)
Retail Lending (secured, semi secured and
unsecured)- A full suite of loans
Premium Banking
Payroll Account and Payroll Banking Services
Banking in the right way means how the division
does it becomes as important as what it does.

Provide Value Through

with difference for all the stakeholders.

What is Retail Banking Division for

It exists for the clients and customers, for the


shareholders, the colleagues, and the stakeholders it
exists for the purpose of helping people achieve their
ambitions.

How will the division do that


Respect means respecting and valuing all stakeholders.
It is about building trust and promoting collaboration.
Integrity demands the member of this division
to act fairly, ethically and honestly. This requires
having the courage always to do the right
thing and to be accountable for the decisions.

Accessibility for all customers to simple,


transparent and speedy products and services
Faster or instant decision making and
processing
A focus on providing suitable services for
customers key requirements
Relationship propositions tailored for different
segments
The radiant use of data to improve and tailor
offers to customers

Contributing To Income By
Retail

Banking

Division

delivers

significant

contribution to the banks revenue through offering


long term value and great customer service to our
customer base, and prudently managing the risk.

109

Annual Report 2014

Sustaining Business By

14000

Supporting

society

through

responsible

lending

Responding to demand for cost effectiveness


by investing in innovative and resourceful sales
channels

Running a risk-conscious business

Ensuring we have the right people with the


right tools, delivering the most suitable service

BDT Million

12000
10000

10936.4

11303.3

2011

2012

12138.3

12577.2

2013

2014

9293.5

8000
6000
4000
2000
0
2010

Figure: Retail Asset position for last 5 years

Ensuring Customer Satisfaction By


Service First and it is key to retain the customers; so,
the retail banking division focuses on to achieve the
excellence in customer service at branch and other

red
cu 47%
e
S an
Lo

points of contacts through the Service Quality Unit


which monitors the customer service status of the

red
cu %
e
s
Un n 50
a
Lo

bank in regular basis by using different techniques.

RETAIL ASSET
A Leading Player In Responsible Lending
Keeping all the uncertainty in mind, the timely executed
decisions and foresight of the Retail Banking Division

Semi Secured
Loan 3%
Figure: Composition of Retail Asset Portfolio as on 31st December, 2014

made the hurdle so easy to achieve sustainable profit.


Through constant improvement and stance, now Prime
Bank Ltd. holds

13% market share.

A Full Range of Retail Loans


Prime Bank Limited provides retail lending through:

Financial Highlights of 2014

3.62% Growth in 2014


BDT

12,577.20

RETAIL LIABILITY

Million Loans and Advances in

Portfolio

Total Disbursement of BDT


Processing

15

Retail Asset Team


Branch Network- 140 Branches
Sales Channel-

3,916 Million through

9,876 Loan Proposals in 2014

asset products to meet the different customer

A Broader Product Range to Remain The Bank


of Choice
The Retail Banking Division has taken strong measures
to make sure that it remains the bank of choice for the
customers.
As a bank operating in the very competitive market, the
Retail Banking Division continues to develop a range of
products for all tiers of customers. It leads to an increase
in the number of customers and an increase in low or no
cost fund in retail liability portfolio

requirements

Financial Highlights of 2014


The landscape for the division has fundamentally
changed and will continue to evolve in the

110

Procured

45,786

nos. of CASA through which

coming years. It is believed that these changes

Monthly Average of BDT

are not recurring but represent a structural shift.

Fund booked.

153

Million Low No Cost

51,826

nos. of My First Account with an

Outstanding

Amount

of

BDT

144

Million

7,444 Fixed Deposit with an amount BDT


4,513.35 Million
Procured

981 Customers decorated their home with House


Hold Durable Loan in 2014
Outside of DAP

295 Customers built their houses

with Abash Loan

No. of CASA

Retail Asset Tournament - 2014

120,000
99,548

100,000

97,612

The division initiated this campaign in May 15, 2014 for

80,000
65,929

three months to achieve the sales target and to motivate

60,000

as well as to groom up the retail business people.

40,000
20,000

BDT

2012

2013

2014

1,135.83 Million retail loan has been acquired

through this campaign.

Figure: Number of CASA in last 3 years

Lets Increase Low Cost Fund


BDT Mill
5000

4513.35

4500
4000

more low cost/no cost deposit due to strengthen

3725.77

3496.79

3500

This campaign was launched with an aim to acquire


deposit mix of the bank for reducing cost of deposit

3000
2500

32,773

2000
1500
1000

nos of CASA & My First Account were

procured through this campaign

500
0
2012

2013

2013

Figure: FDR Amount in last 3 years

Prime Bank achieved

First position in School

Banking Conference at Sylhet, organized by Central


Bank

620,381 Savings Accounts


205,354 Deposit Schemes
4,518 SHUKONNA Account Holder
A PAST TO BE PROUD OF
In 2014, Retail Banking Division undertook various
initiatives to provide superior support to the customers
and procure business in the approach dubbed different
campaigns.
Through the network of sales channel and branches,
the campaigns delivered a range of tailored banking
solutions and ensured the promised business

2,469

Dreams came true with our home loan

(Swapna Neer) in 2014


We served

18,222

Loan in 2014

Payroll Banking and Prime Payroll Account


Prime Bank launches Payroll Banking and Prime Payroll
Account in April, 2014 leveraging our existing and new
Corporate, SME, Islamic Banking and Retail relationships
which transformed into a new customer acquisition
strategy with lower originating costs, low delinquency,
highly focused on cross selling and servicing. So far,
the division has bagged
corporate and more than
accounts under this service.

6,000

43

Branch Visit Program


Branch Visit program alike mystery shopping was
initiated in April, 2014 under the supervision of Service
Quality Unit. The unit has devised a methodology to
measure the overall branch performance and evaluated
138 branches based on that.

Acquiring Team Formation


needs with our Any Purpose

For attaining maximum access to the market and


utilizing business opportunities, acquiring team has

111

Annual Report 2014


been formed, who will making tie-ups with strategic
partners to build quality portfolio, attaining business
targets as well as to reach target customers

UNDERSTANDING AND
FUTURE

PLANNING FOR THE

Innovation has always played a central role in Retail Banking


Divisions activity and is reflected in its business. The

Absolute
Prestige
Banking Monarch

division perceives innovation as understanding changes

Prime Bank Limited has recently

and customer expectations and finding solutions in the

introduced

face of economic changes and market competitions. For


Prime Bank Limited, innovation is a commitment to its
customers, and the stakeholders are going to experience

service

Premium

which

is

banking

named

as

MONARCH. The idea behind such type of banking


is to provide hassle free services to the high net

and enjoy the changes that will be brought through the

worth customers who require very personalized and

different initiatives near-term in 2015.

sophisticated banking services. MONARCH is a

In 2014,

837 New people are driving their cars with

our Car Loan

symphony of banking benefits, unique investment


products, personalized service and exclusive lifestyle
benefits that bring complete harmony to all financial
needs of our Premium customers.

FOCUS OF EFFORTS IN 2015


In 2015, the division will continue to build on the
progress made in 2014. It aims to respond positively
to the evolving market. The business environment
will inevitably call for continued rigorous review and
adaption of the mix and structure of the businesses of
the division to ensure it generates sustainable returns.

MONARCH is designed to manage the wealth and


enrich the life of our premium clients with exceptional
privileges.
At Prime Bank, it is our constant efforts to meet all the
requirements of Premium Banking Customers efficiently
by offering various banking services. As such our
Monarch customers are enjoying the following exclusive
benefits:

Another key focus over 2014 and the coming years


are rebuilding the trust that customers, clients, and

Exclusive Services

stakeholders have in Prime Bank Limited. The division

Tejgaon

has pledged to increase transparency and conduct the


business in the right way, as set out in the values.
The Division has started to put legacy issues behind and
have greater clarity on what the future holds, particularly
in terms of regulation and compliance. So, in 2015

Dedicated Relationship Manager

Family Benefits

Meet & Greet Privileges at Hazrat Shahjalal


International Airport

concepts in retail banking to strength the business of


the bank.
The main challenge ahead of this Division is to respond

Prioritized Banking

Exclusive Dual Currency Debit Card with Higher


Withdrawal Limit

Free Cheque Book

Free Internet Banking, SMS Banking & Mobile

better to the current needs and anticipate the future

112

Flight Reservation Assistance for Domestic &


International Travel

the Division is going to bring noteworthy changes like


business process improvement and applying different

Exclusive Premium Lounges in Banani, Baridhara &

Banking

demands of the customers and clients. As they become

Discounted Rate on Retail Loans

increasingly savvy, Retail Banking Division is going to


embed new offers across the product line.

Waiver of Fees on Various Products & Services

50% Discount on Safe Deposit Locker Facilities

Pre-approved Platinum Credit Card

Diversified Lifestyle
Fantastic Shopping Discount At
- Leading Local & International Stores
- Home Dcor Outlets
- Food & Beverage Outlets
Special Rates on Room Booking at Selected Hotels
Discounts at Salons/Spas and Health Clubs
Invitation to Glamorous Premier Shows & Events
Exclusive Health Packages at Reputed International
Hospitals like Bangkok, Parkway& Raffles Hospital.
Travel Benefits
Special Discount at Antique Luxuries - Jewellery
Stores
The following qualification criteria have been set forth
as a pre-requisite of becoming a Monarch Customer.

Category

Eligibility Criteria

Prime Bank
Limited

A/C Opening Balance


(Individual/Joint Account)

BDT 20 Lac
& above.

FD Opening Balance
(Individual/Joint Account)

BDT 30 Lac
& above.

Family Package (No. of


Beneficiaries)

3 persons.

A/C opening Balance of


the family members.

BDT 10 Lac
per person.

Persons having salary


accounts through PBL.

BDT 3 Lac &


above.

Home loan

BDT 70 Lac
& above.

Card Division
The day is not so far away when people will feel
comfortable to hold a Credit Card rather than cash
money. Plastic card is the sharp weapon of future banking
business. As it is convenient, safe and prestigious to
carry with, all-class customers are rushing for it. Banks
have also introduced a number of credit cards which
have already spurred the competition of growing card
market. Prime Bank Limited is a leading name in plastic
card market. Get more from life with Prime Bank Credit
Cards it is the motto of Prime Bank Cards. Every day
we try to add more value to our existing customers,
we ensure convenience while they shop, dine, stay at
hotels, roam cities and countries or anytime they swap
the card anywhere. No need to mention, credit cards
have become a part of metro lifestyle & payment mood.

We just ensure our customers are happy with our cards.


Prime Bank commenced its card business as one of the
pioneer local bank issuers in 1999 and started acquiring
cards in 2001. Since then it has captured a substantial
portion of the market share by having around 90,000
issued cards. Prime Bank has a superfluous privilege
in grabbing the market as it is a prominent member of
both MasterCard & VISA brand. We have also exclusively
launched JCB Credit Card this year the only Japanese
Credit Card which is also the only Asian brand of Plastic
Card in the world. We have simultaneously conventional
credit cards as well as Islamic credit card. Moreover, we
are playing a leading role in acquiring business in the
areas of 5 star hotels, restaurants and chain-shops.
We have a wide range of card types as per the inevitable
needs to amuse the life style e.g. Classic/Silver Card,
Gold Card, Platinum Card. It is Prime Bank Credit Card
which first put its step in the industry as a card with
cardholder picture to avoid fraud transactions. Prime
Bank is also highly cognizant about the quality of
portfolio and adopted FRM, first time in the industry, a
real time transaction monitoring to bring a safeguard
against potential risk of credit card fraud & unauthorized
use of cards. Another unique value added service of
Prime Bank Cards in the industry is SMS Pull facility
under which a cardholder can meet up his card related
selected queries through sending SMS and getting
instant feedback from the bank.
Prime Banks unique selling proposition includes Reward
Card (a complimentary card based on transaction
profile), complimentary health packages in Apollo and
Square Hospitals and Shop N Win Loyalty program
(Get an opportunity to grab Tk. 100,000 or Tk. 45,000
or Tk. 15,000 as a surprised reward while making
transaction through Prime Platinum Credit Card).
Among vigorous initiatives taken by Card Division in 2014
the promising ones were launching of JCB Credit Card
the only Japanese Credit Card, 16% cash back facility
over all retail purchases on the occasion of National
Victory Day which is the 1st ever in Bangladesh, 1st
year annual fee free campaign, revision of card cheque
processing fee at 1.25% and launching of Prime PMI
(pay in monthly installment). Various MoU sighed in this
year with merchants in regard of up to 12% discount at
Meena Bazar, up to 12% discount at Agora, 15% discount
at TNT, 15% discount at NOVOAIR and many more.
As a continuous process, the bank achieved
technological advancement, service improvement and
product development during the year which contributed
in the growth of key performance indicators of card
business as given under:

113

Annual Report 2014

Year

Key Performance
Indicators

2011

2012

2013

Card Base

57,741

67,947

76,442 86,435

13.07%

Advance (BDT in
million )

750

915

1,042.20 1131.75

8.59%

Operating Profit
(BDT in million )

65.37

80.23

94.10

2014

100.78

% Growth
Over 2013

7.09%

The last but not the least word that is to be marked for
the past year is our sharp outlook in grabbing every
business threshold that made it possible to achieve the
business KPIs of Card division.

International
Division
Foreign Remittance
The consistent growth of foreign remittance inflow for
Prime Bank Ltd. further progressed in 2014, enabling the
Bank to contribute in routing a total of Tk. 3,948.35 Crore
of foreign remittance from different parts of the world.
The regular inflow of foreign remittance has brought
stability in the foreign currency administration of the
Bank. Prime Bank is maintaining years of effective and
fruitful relationship with the renowned exchange houses
of Saudi Arabia, UAE, Malaysia, USA, Italy, South Korea,
Oman and the global players Western Union Money
Transfer & RIA Financial Services. Inclusion of AlAnsari
LLC in the network in 2014 has further extended the
strength of Prime Bank for sourcing remittance from
UAE. Two of our deputed officials are working in UAE
towards increasing volume of remittance from UAE.
Furthermore, a good numbers of officials have been
stationed in Singapore and UK to promote and procure
foreign remittance from expatriate Bangladeshis. In
2014, amount of inward foreign remittance received
from Saudi Arabia was more than 40%, while PBLs fully
owned subsidiaries in Singapore and UK added more
than 20% and 10% remittance respectively.
The NRB Banking Department of the Bank backed
by state-of-the-art IT facilities has given their utmost
dedication and effort towards the sourcing and speedy
distribution of foreign remittance throughout the year
2014. As a part of Banks strategic initiative to handle
increased volume of inward foreign remittance, the Bank
has continuously proved its efficiency and competency
in speedy delivery of inward remittance to the beneficiary
through its excellent distribution network comprising

114

of own branches along with country-wide network of


two reputed NGO - Buro Bangladesh and UDDIPAN.

Correspondent Relationship
Prime Banks wide correspondent network now includes
638 members, covering 277 banks spread across
75 countries as on December 31, 2014. The Bank is
successfully maintaining such relationships around
the world to facilitate international trade transactions.
Prime Bank maintains 37 Nostro Accounts in 10 major
currencies with reputed international banks around the
world in all of the important global financial centers.
Prime Bank also offers Vostro account service to foreign
correspondents. PBL enjoys sufficient credit lines from
its correspondents, including Credit Limit under TFFP
of Asian Development Bank (ADB) and International
Finance Corporation (IFC), for adding confirmation
to letter of credit as and when needed. During 2014,
Prime Bank availed bilateral loan in USD from IFC,
FMO and other Correspondent Banks for use in trade
finance transactions through Offshore Banking Units.

Offshore Banking
Prime Bank is offering Offshore Banking facilities through
3 (three) Offshore Banking Units (OBU) located in Dhaka
Export Processing Zone, Chittagong Export Processing
Zone and Adamjee Export Processing Zone. Total Loans
and Advance of three OBUs reached to USD 110.74
million as on December 31, 2014 compared to USD 77.81
million as on December 31, 2013, recording a growth of
42.32%. During the year 2014, OBUs have made a Profit
of USD 1.71 million as against USD 1.43 million in 2013.

Prime Exchange Co. Pte. Ltd. , Singapore


The Company experienced satisfactory level of business
growth in 2014, however, due to changes in policies by
Singaporean government on expatriate workers; the
money services business has become quite competitive.
Total volume of remittance was SGD 102.60 million in
2014 compared to SGD 89.79 in 2013. The company made
profit before tax of SGD 276,036in 2014 compared to SGD
99,795 in 2013. The company operates with two Branches
in Desker Road and Jurong East in compliance with the
regulations of both Bangladesh Bank and Monetary
Authority of Singapore (MAS). Growth in business was
possible due to marketing efforts, personalized service,
enhanced distribution network and the efficient service
platform of RemitFast software.
The company has been effectively utilizing its PBL
branches as well as 3,000 (approx) outlets of other
banks and NGOs branch network in Bangladesh for

distribution of remittance to beneficiaries in the far


flung areas timely and efficiently. Also on June 2014,
the company signed a drawing arrangement with
Janata Bank to expand its reach in Bangladesh. Based
on experience from providing remittance service to
Non-resident Indians (NRIs) in Singapore through HDFC
Bank, PEC has also signed rupee drawing arrangement
with ICICI Bank, India which is going to help increase its
coverage in India manifold. As part of its endeavor to
expand in different corridors, in Sep 2014 the Company
signed PESO remittance agreement with BDO UNIBANK
INC, Philippines to cater to Philippines nationals living in
Singapore to send remittance to the Philippines. PESO
remittance service is going to be launched soon. The
effort to explore business to new remittance corridors
will help keep the growth momentum that has been
achieved in 2014.

PBL Exchange (UK) Limited


The company operates with three Branches in London,
Birmingham and Manchester. Strict adherence with
compliance issues made the business environment very
challenging for the MSBs in the UK. The business figures
has remained static at volume of remittance GBP 22.38
million in 2014 compared to GBP 23.77 million in 2013.
Introduction of WorldPay POS machines in all three
branches to facilitate credit/debit card transactions
has helped to diversify the clientele and reduce the
dependence on cash transaction. All the three branches
are putting continuous efforts for business growth and
expansion of customer base. The Company is expected
to reach a better position in 2015.

PBL Finance (Hong Kong) Limited


Total asset of the company reached to HKD 231.08
million as on December 31, 2014 compared to HKD
243.83 million as on December 31, 2013. The company
has made a net profit of HKD 5,495,536 in 2014
compared to HKD 5,037,527 in 2013. The overseas
team, which includes expert officials on deputation
from PBL as well as local recruits from Hong Kong,
has been rendering personalized service to corporate/
businesses in Hong Kong and has gained satisfactory
response from its widening client base. Within the
short span of operation since Sep 2011, the Company
established SWIFT connectivity (BIC: PRBL HK HH)
which went live in Aug 2014, making its trade finance
service operations smooth and world class. The
company is going to strive forward to increase its
revenue through advisement, negotiation, confirmation
and discounting facilities against bankers acceptance
on L/Cs originating from Prime Bank Limited and other
Bangladeshi Banks.

Treasury
Treasury is a vital and indispensable part of every Bank.
Prime Bank Treasury Division is not an exception. Over
the last couple of years Prime Bank Treasury has been
continuously performing very well despite adversaries &
economic turmoil globally as well as within the country.
The Year 2014 was unlike the previous year. There was
no such political turmoil within the country that was
observed in 2013; although it took almost half of the
year before confidence of the business entities started
to grow. But once people were convinced about the
encouraging environment, they started investing again,
which was witnessed through growth in import, export
and remittance that started from third quarter of 2014.
In the year 2014 Treasury achieved all of its KPIs
successfully, even exceeded in some areas especially
in Liquidity Management, Primary Dealers Operations,
Government Securities Trading & Foreign Currency
Dealing and Investment.
Prime Banks Treasury primarily focuses on expanding
transaction volume, utilizing different market
opportunities within all risk and regulatory limits,
strengthening ALM operations and creating a diversified
fund management channel by accurate assessment of
domestic and overseas market trends and movements.
Through its proper Asset Liability Management and
efficient trading operations, Treasury Division strives to
minimize market and liquidity risks. On the other hand,
for enhancement of its profitability, Treasury makes
every effort for proper assessment of the market trend
and allocation of its assets and liabilities in line with the
market trend.
In most of 2014, the Local Money Market as well
as Foreign Exchange Market was liquid. This was
primarily due to slow down in our local investment. In
this situation, to support countrys economic growth
and to revive investors confidence, Bangladesh Bank
took several steps under inclusive banking, specially
credit accessibility for agricultural as well as small and
medium enterprises (SME), empowerment of women,
green banking, modernization of financial sector,
Mobile Banking, e-commerce, export promotion and
liberalizing foreign exchange transaction to ensure
steady economic growth while containing inflation.
Prime Bank Treasury, at the very beginning of the year,
through its own market research and market intelligence
anticipated the situation very correctly and adopted an
investment and fund management strategy accordingly.

115

Annual Report 2014


Our investment strategy in Money Market and Primary
Dealership as well as Foreign Exchange contributed to a
very successful 2014.

of the senior management to formulate an effective


investment and fund management strategy for the
bank.

In 2014, Prime Bank has once again been able to


establish themselves as one of the top Primary Dealer
Bank of the country, in both Primary & Secondary Market
of Govt. securities. Bangladesh Banks recognition in
this connection depicts it all. Overall trading of Govt.
securities achieved new milestone of BDT 61,344.20
million and we earned BDT 255.90 million as capital
gain in 2014 compared to BDT 152.25 million of 2013.
We also earned an underwriting commission of BDT
46.57 million for successful bidding in the primary
auction market.

In 2014, Treasury operated within all regulatory limits


and there was no single instance where Treasury
violated any regulatory limit, which reflects Prime Bank
Treasurys commitment to operate within the rules
and regulations of the Bank as well as other regulatory
bodies.

Prime Bank Money Market Desk was very active in


the money market all through the year. The revenue
generated by MM Desk in 2014 was BDT 250.66 million.
The Interbank Foreign Exchange Market was quite stable
and liquid up until November14 when USD started to
appreciate against BDT and stood at 77.95 at the end of
December14 which was 77.45 at the very beginning of
November14. Despite of facing low volatility in USD/BDT
rate for the first 10 months of 2014, our FX Desk was able
to generate exchange gain of BDT 876.41 million in 14.
FX desk handled a business volume of USD 3,053.81
million. The inward remittance at the end of 2014 stood
at USD 509.42 million.
In 2014, Treasury also developed and launched a new
kind of deposit product named Prime NFCD Account
for its Offshore Banking Branches. The main objective
was to mobilize FC deposit for the Offshore Banking
Branches. Prime NFCD Account is also a unique kind
of Deposit Product in our country. In 2014 FX desk of
Treasury also restarted cross currency dealing with the
permission of the Board of Directors.
Asset Liability Management (ALM) is an integral part of
Bank Management. Head of Treasury is the member
secretary of ALCO. Through ALM our Bank mainly aims
to achieve objectives such as:

Growth in assets & liabilities.


Containment of risk in a coherent manner.
Stability and consistency in earnings and
Profitability.

ALM desk, through its own market research and market


intelligence presented the market outlook throughout
the year to give an explicit idea about the market
liquidity for availing market opportunities for investment
and fund deployment in the market. ALM desk also
presented the banks overall financial position in front

116

Treasury, as a major contributor to banks revenue line,


contributed significantly in 2014. All our strategy and
policies that were adopted in 2014 paid us very well and
helped us to have a profitable 2014. Overall Treasury
revenue numbers in 2014 from different revenue heads
are given below with a comparison of 2013 to show the
growth in its business horizon and revenue line:
Figures in Million

Treasury Income
Particulars

2014

2013

Foreign Exchange Gain

876.41

930.44

Interest Income Call Loan

83.11

91.89

Interest Income on Placement /


Deposit (Local)

1.89

0.90

Interest Income on Placement /


Deposit (Foreign)

165.66

142.51

4,998.19

4,650.71

56.71

96.61

255.90

152.25

1,029.56

672.17

46.57

21.71

Total

7,514.01

6,759.19

Growth

11.17%

Interest Income on Govt.


Securities
Interest Income on Debenture/
Bonds
Capital Gain for Sell of Govt.
Sec.
Gain on discounted bond/bills
Underwriting Commission
against Treasury Bill/Bond

Treasury Income
8000
7000

6759.19

In million

7514.01

6000
5000
4000
3000
2000
1000
0

2013

2014

Trade Service Islamic


Department
Banking
Division

As part of Strategic Priorities & Action Plan (2012-2014)


Prime Bank Limited has started centralization of its

Trade Finance Business since February, 10 2013. The


primary objective of centralization of Trade Finance
Business was to optimize utilization of the resources and
their expertise under one roof without compromising
regulatory control while enhancing service standards
and minimize transactional turnaround. Currently all
Trade Finance Business of Non-Authorized Dealer
(Non- AD) Branches are being routed through Trade
Service Department (TSD). Consequence of which,
the customers of the Non- Authorized Dealer Branches
(Non-AD) are now receiving trade services of the bank
from one point which helps them to minimize the
turnaround time with better service standard complying
all relevant controls.
After successful completion of Trade Finance Business
of Non-Authorized (Non-AD) Branches, Prime Bank
started centralization of Trade Finance Business of
its Authorized Dealer (AD) Branches of Dhaka Division
since October 01, 2013. Out of 28 Authorized Dealer
(AD) branches, Trade Finance business of 25 Authorized
Dealer Branches of the whole country has been
completed by December31, 2014.
As of today Trade Finance businesses of 117 branches
(98% of the total number of branches including both
AD and Non-AD Branches) of Prime bank Limited across
the country have been centralized. As per Road map
centralization process of the remaining Authorized
Dealer (AD) Branches will be completed by within 1st
Quarter of 2015.

All Branch

Uncovered
2%

Covered
98%

Islamic banking products and services based on Islamic


Shariah principles introduced by Prime Bank through its
five Islamic banking branches got tremendous response
from a considerable portion of its clientele who are eager
to accept Shariah compliant products and services.
Prime Bank is also offering Islamic banking products and
services through Islamic Banking Service Desks set up
at some of its conventional banking branches.
Prime Bank enjoys a very strong brand image in the
banking sector and the bank has a very good market
reputation and its Islamic banking business also has
proved to be superior compared to others and also its
own conventional system. Its Islamic banking market
share and growth rate is the highest among the
conventional banks having Islamic banking branches.
Considering the fact that the Islamic banking industry
is at its growth stage in the country and competitive
rivalry among the industry members is increasing, Prime
Bank have set the vision to be a trend setter in this field
by adopting proper strategy and objective in order to
achieve its goal.
The bank identifies all of its Islamic banking activities
by adopting a generic name Hasanah - the brand
name for Islamic products and services of the bank,
which has been used in the Quran and the Hadith to
denote good deed, welfare, virtue, beauty spot etc. The
strategy to launch Hasanah brand has proved to be a
good move - the Islamic banking business is growing
at a competitive rate despite various limitations for
its expansion. This growth is also comparable to the
overall growth of the Islamic banking sector of the
country.
The Islamic banking manpower of the bank is more
than one hundred for whom the bank arranges regular
training programs on operation of Islamic banking.
Prime Bank is an active member of Central Shariah
Board for Islamic Banks of Bangladesh and Islamic Banks
Consultative Forum. Thus Prime Bank is committed to
uphold the sentiment of majority of the people in the
country as A bank with a difference.
Products and services
Presently Prime Bank offers almost all the products
those are available in the country under its Islamic

117

Annual Report 2014

PBL Islamic Banking (Hasanah)

Deposit

Investment

Al-Wadiah

Mudarabah

Savings

Term

AWCA
MSA
MSND

MTDR

Scheme
MCSS
MESS
MHSS
MMBDS

Bai

Ijara

Share

Scheme

Bai-Murabaha
Bai-Muajjal
Bai-Salam

Leasing
Higher
Purchase

Musharaka
Mudaraba

Manjeel
Burak
Asbab
Shifa

banking operations for sourcing and utilization of funds


or in other words, pooling resources and deployment of
the said resources. The following products are available
now:
Deposit products
1. Al-Wadeeah Current Account (AWCA)
2. Mudaraba Savings Account (MSA)
3. Mudaraba Special Notice Deposit (MSND)
4. Mudaraba Term Deposit Receipt (MTDR)
5. Mudaraba Double Benefit Deposit Scheme (MDBDS)
6. Mudaraba Contributory Savings Scheme (MCSS)
7.

Mudaraba Education Savings Scheme (MESS)

8. Mudaraba Hajj Savings Scheme (MHSS)


9. Mudaraba Monthly Benefit Deposit Scheme
(MMBDS)
10. MudarabaLakhpati Deposit Scheme (MLDS)
11. Mudaraba Millionaire Deposit Scheme (MMDS)
12. Mudaraba House Building Deposit Scheme (MHBDS)
13. MudarabaLaksmaPuron Savings Scheme (MLPSS)
14. Mudaraba 150% Deposit Scheme
15. Mudaraba My First Account
16. Mudaraba Brighter Tomorrow Deposit Scheme
17. MudarabaSukonna Deposit Account
18. Mudaraba cash Waqf Deposit Scheme
Investment products
Hasanah Home Investment (Manjeel)

Hasanah Auto Investment (Burak)

Hasanah Household Durables Investment (Asbab)

Hasanah Medical Investment (Shifa)

Hasanah Card (Islamic Credit Card)

Financial analysis
Nationwide, Islamic banking earned around 20% market
share of the banking sector (private commercial banks)

118

HPSM

of Bangladesh. Among the Islamic banks, fully fledged


Islamic banks conduct around 95% of the Islamic
banking business of the country while the rest is done
by the conventional banks having Islamic branches
and windows. Among these banks, Prime Bank has the
lions share around 25% of the market share in deposit,
investment and profit.
Since inception, Islamic banking business of Prime Bank
marked steady growth in all areas - deposit, investment
and profit. The Islamic banking business of Prime Bank
is growing at a competitive rate.
With only 5 branches, around 10% of Prime Banks
business is conducted under Islamic banking modes
with only 4% of manpower. Cost Effectiveness of
Islamic banking products is better compared to overall
business - Cost of Deposit 7.43%, Cost of Operation
0.98% and Cost of Fund 8.42%. In income matrix, Islamic
banking business of Prime Bank also shows reasonable
performance - Yield on Advance 12.72%, Spread 5.28%
and Burden Coverage 84.16%.
In Islamic banking, employee productivity of Prime Bank
is also in a better position compared to conventional
banking income per employee 7.70 million Taka,
expenditure per employee 1.40 million Taka, profit per
employee 6.30 million Taka and employee expenses to
operating profit 13.63%.
Activities Year 2014
As per decision of the management, Hajj Deposit
Campaign 2014 was conducted with a view to provide
different services to the Hajj Pilgrims and mobilize lowno cost deposit in the process. For the purpose, a team
of officials worked under the supervision of Islamic
Banking Division to provide marketing and sales effort.
The performance of the team was excellent targeted
number of agent accounts was opened and fees of
thousands of pilgrims were mobilized. SIM card for
pilgrims (Mobily, KSA) and other gifts were given to
5,000+ pilgrims. We also participated in the 7th Hajj and
Umrah Fair and set up booth at Ashkona Hajj Camp.

Five special workshops were conducted on Islamic


banking for the officials of Islamic Banking Branches
(IBBs) and concerned officials of Head Office at Dhaka,
Chittagong and Sylhet by HRTDC in association with
Islamic Banking Division where 135 officials took part.
As per decision of the Management, sales effort was
exerted and contacts were made with different business
concerns to sign MOU under which discount/privileges

Alternative
Delivery
Channels
Evolution of ADC

would be given to Hasanah Cardholders (Islamic Credit


Card) for consumption of their products and services.
Three Iftar Mahfils and discussion programs were held
at Dhaka, Chittagong and Sylhet centrally with all the
branches of the cities where a Paper was presented
on Shariah Banking Bangladesh Perspective by
renowned Islamic scholars before huge gatherings.
The programs were widely publicized through print and
electronic media.
Three meetings of Prime Bank Shariah Supervisory
Committee were arranged where different operational
issues were reviewed and the Muraqibs of Shariah
Supervisory Committee conducted Shariah audit
and inspection at the Islamic banking branches and
submitted reports thereon. Besides, Medical Camp
at Bishwa Ijtema was arranged where thousands of

Online banking is an electronic payment system that


enables customers of a financial institution to conduct
financial transactions on a website or ATM operated
by the institution, such as a virtual bank, credit union,
retail bank or building society. Online banking is also
referred to as Internet banking, e-banking or virtual
banking, where customers are served exclusively
through electronic channels other than traditional
branch banking.
Prime Bank started its ATM acquiring business and
issuing Propitiatory ATM cards in the year 2008 with the
following objectives:
1. To ensure 24/7 services to the customers of
the Bank.
2. To decentralize the customers for providing
spontaneous and prompt services as required.

consecutive sixth year.

3. To reduce the pressure & risk of Cash Counter


at branches end.

The Islamic banking branches (IBB) have made

4. To increase low Cost/no Cost deposit of the


bank.

devotees were given primary medical services for the

considerable progress in achieving business targets


competing with the conventional branches of the
Bank during the Year 2014. It is expected that Islamic
branches would also perform better and achieve
targets this year under the guidance and prudent
leadership of the Management of Prime Bank, In Sha
Allah.

SL.

Name of Service\Product at ADC

ATM Machine

a. ATM Card - Proprietary

From April 16, 2009 this wing has immersed as a


separate division under the name of Alternative Delivery
Channels (ADC) Division by the approval of the 317th
Board Meeting where customers are served exclusively
through electronic channels other than traditional
branch banking.

Started from
January 2008

Status As on 31.12.2014
160

April 2008

1,91,000

b. Debit Card - MasterCard

January 2011

1,85,000

Prepaid Card (Dhaka Club)

November 2008

Internet Banking (Altitude)

December 2009 Handed over


to ADC (12/10/2014)

31,000 users

SMS banking

July 2010

25,000 users

Phone Banking

May 2011

3,500

Information Kiosk

May 2011

04

Prime Cash (Biometric Smart Card)

May 2012

71,000

905

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Annual Report 2014

Brief narration on ADC Products:


1.

ATM Booths

Prime Bank Ltd. entered into the digital banking arena by launching ATM services in January
2008. At the end of 2014, there are 160 live ATMs across the country. We accept MasterCard,
Visa Card, JCB Card, Prime Cash and PBL Proprietary Debit Card under NPSB network banks
card.

2.

ATM Card /
Debit Card

ATM Card service of PBL was started from March, 2008 and by the end of 2014 the number
of ATM Cards (proprietary) is 191,000.
MasterCard Debit Card was launched in January 2011 and the number of MasterCard Debit
Card reached to 185,000 at the end of December 2014. PBL joined NPSB network in the year
2014 under the supervision of Bangladesh Bank. Also PBL Debit Cardholders can enjoy the
cash withdrawal facility from our 160 live ATMs as well as other ATMs under NPSB Network.
At the end of 2014 the banks total number of Debit Card is 376,000.

3.

Prepaid Card DCL Prepaid card is a value added service for the Member of Dhaka Club. We have issued a
(Dhaka Club) total number of 905 cards.

4.

Internet

We have launched Internet Banking Service, ALTITUDE in the year 2012 as one of the pioneers

Banking

Bank. ALTITUDE is becoming popular among the Customers of PBL for its unique inter-intra

(ALTITUDE)

Bank Financial Services. Moreover, using ALTITUDE, customers can view the account details;
pay utility bill, credit card bill of PBL and other Banks from anywhere, anytime. To meet and
exceed the expectation of its customers, ALTITUDE is getting diversified with more and
unique features which will attract more customers in the coming days and will improve the
service experience of the existing customers. At the end of the year 2014, the total number
of customers of ALTITUDE was around 31,000.

5.

SMS

As a modernized bank we introduced SMS Banking services to its valued customers since July

Banking

2010. Number of users is about 25,000 and increasing day by day. SMS Banking comprises
SMS PUSH-PULL, Bulk SMS and Alert SMS Service. By PUSH-PULL services registered
customer may receive their account balance, mini statement, and currency exchange rate
information at anytime from anywhere using their mobile handset.
Through Bulk Push SMS we acknowledge our customers regarding services and different
promotional activities. By SMS alert our customer will get alert message instantly for the
transaction that took place in their account.

6.

Prime Cash

As a part of inclusion banking, Prime bank introduced Prime Cash service on May 20, 2012.

(Biometric

Its easy to use, unique and its the first ever in the country. Based on Biometric Smart Card,

Smart Card) the service is highly secure and authenticates transaction matching cardholder thumb
impression only.
Prime bank issued around 71,000 number of Prime Cash card through its 1,174 agents
including 138 branched network (PBL branch) in different location of the country including
urban and rural area. In this service our main customers are students, farmers, garments
worker, rickshaw puller, fisher man, driver, labor etc. Prime Cash cardholders can enjoy
different banking service like Deposits, Withdrawal, Fund transfer, ATM, Mobile top-up and
Salary disbursement using Prime Cash Card. We also receive huge foreign remittance by
Prime Cash card amounting to Tk. 2 crore in the year 2014 from major ten countries around
the world. Through Prime Cash service, card holder receives their foreign remittance from
different countries sent by their relatives.
7.

Information

Prime Bank Limited installed KIOSK on June, 2011 for its debit card holders. Through KIOSK

KIOSK

system a customer can avail of services, such as, (a) Balance enquiry (b) Mini-statement
(c) Utility bill payment of Grameen Phone, Airtel, ROBI, Banglalink mobile operator (d) PIN
change etc. Prime Bank Ltd. has 4 KIOSK systems.

120

8.

Phone
Banking

Four our valued customers to easily access some availing facilities 24/7 from home or
outside of the bank, Prime Bank Limited launched Phone Banking Service in May 2011. PBL
Phone Banking Service provide various services to the customers, such as, balance enquiry,
activation/block debit card, available limit enquiry/total outstanding/minimum payable
amount/last date of payment of Credit Card through IVR (Interactive Voice Response)
system. Moreover, Phone Banking Service has been popular day by day. At the end of
December 2014, there are around 3,500 users is enjoying this service.

9.

Bank POS

As a part of continues development of ADC Services, a new service has been introduced as

Service

Bank POS to expedite cash withdrawal through Debit Card facilities from the branches when
there is no cheque book with the customer. There are 20 bank POS in various branches of

10.

Cash Back
Service

11.

JCB Debit
Card

PBL.
This is another value added service for our valued customers. Cash Back service allows
PBL Debit Cardholders to meet the instant requirement of Cash through POS terminals of
selected merchant points at the time of shopping in exchange of prescribe charges. We
have started this service from Jan 16, 2014. At present we have 20 outlets under this service.
We have the privilege to launch this new Brand of Debit Card in Bangladesh for the 1st time
as no other Bank has officially issued this card as yet. We are already acquiring this Card at
our ATM/POS terminals and very soon we are going to issue the Debit Card.
With the help of this newly branded card PBL Debit Cardholders can enjoy the cash
withdrawal facility from our 160 live ATMs as well as other ATMs under NPSB Network in
exchange of a prescribed charge.

12.

Dual
Currency
Platinum
Debit CardMONARCH

Indeed, this is a matter of profound pleasure to announce that Prime Bank Limited is
launching Monarch-a Premium Banking Service on October 27, 2014 to provide hassle free
services to its esteemed customers. Its an exclusive service that is embarked for a privileged
few who maintain an average given balance above a certain threshold limit in their account.
This card can be used in any MasterCard Location worldwide. Two accounts can be tagged
with a single card; one is BDT another is USD (RFCD) only.

13.

Easy Cash
(Mobile
Banking)

Prime Bank Limited performed the soft launching of Mobile Banking Service on March 25,
2012. But the commercial launch is delayed due to some technical issues. However, for
providing quality service and to fulfill the goal of financial inclusion, Prime Bank Limited
is working to launch the Mobile Banking Service in a more convenient and effective way.
Considering the current market practices and vulnerabilities, PBL is on its way to prepare itself
to provide the best quality Mobile Financial Service to the customers in terms of Security,
Service Quality and Convenience. We hope that we will be able to launch the Mobile Banking
Service shortly once the required service quality is ensured.

14.

Cash Deposit We have the privilege to launch Cash Deposit Machine (CDM) as per Management desire. By
Machine
using this service a customer can deposit their money by 24/7. The installation of the CDM
(CDM)
Machine is under process.

Centralized
Clearing
Cell (CCC)
To ensure a modern payment and settlement system
infrastructure for the country, Bangladesh Automated
Clearing House (BACH), the first ever electronic clearing

house, with its two components: Bangladesh Automated


Cheque Processing System (BACPS) and Bangladesh
Electronic Fund transfer network (BEFTN) a state of the
art technology went on live on October 07, 2010 and
February 24, 2011 respectively.
Prime Bank Limited is providing services through
Centralized Clearing Cell to its valuable customers. Total
number and amount of instruments in the automated
clearing (BACPS & BEFTN) are increasing day by day as
customers are being highly benefited.

121

Annual Report 2014


Benefits of BACH: BACH minimizes risk, fraud and forgery,
reduces cheque carrying & clearing cost, elimination of
lost and stole instruments, reduces payment processing

No. of Cheques (Outward & Inward) in 2012 and 2013


2012

No. of Cheques (Outward & Inward) in 2013 and 2014

2013

2013

1000000

10000000
8000000

800000

6000000

600000

4000000

400000

2000000

200000

2014

1200000

12000000

No. of Cheuqes
(Outward)

No. of Cheuqes
(Inward)

No. of cheques cleared

IT Infrastructure
& Planning
Information Technology Division
Information Technology (IT) Division of PBL was
established at the beginning of its banking operation.
The division is well equipped not only with technology,
but also with a dedicated professional workforce which
has been built-up for support as well as development
of new satellite applications. Information technology
of PBL enables sophisticated product development,
better market infrastructure, implementation of reliable
techniques for control of risks and helps the financial
intermediaries to reach geographically distant and
diversified markets. Technological development of the
bank tremendously increases its customer service as

122

time dramatically; ensure faster and secured payment


and settles payment for all Instruments of the whole
country under a single umbrella of the Bangladesh Bank.

No. of Cheuqes
(Outward)

No. of Cheuqes
(Inward)

No. of EFT cleared

well as trust worthiness of the stakeholders towards


the bank.

Information Technology Infrastructure


The banking sector requires a secure and reliable
communication infrastructure to ensure operational
efficiency. PBL has a robust network infrastructure
with scalable, secure, redundant and load balanced
architecture to support its customers regarding the
on-line transactions with the highest level of security.
PBL uses world renowned Active Devices in its network
infrastructure. Connectivity to and from PBL networks
and external networks are carefully planned and
controlled. PBL IT staffs are strictly ensuing security
policies when designing new or upgrading existing
networks, taking into consideration for managing users,
dividing networks into segments and restricting access
to information based on different business and security
policies.

Groups of information services, users and information


systems are segregated on networks. To mitigate the
risk of unauthorized access to network devices the
following guidance is in place:
Production, staging and development zones are
established and physically and/or logically separated
using firewalls;
Network zones are implemented and managed in
a way that segregation of environments are there;

Firewalls are used to provide granular access


control between the various network zones and
only required communication ports, protocols,
devices and servers are permitted;

Users are only being granted access to those areas


of the network and systems for which they are
authorized.

Strict policies are in place for maintaining different


network segregation to manage the network
infrastructure like internet, intranet and extranet.
Datacenter is connected with the head office and
different branches all over the country through this
network. All the branches are connected with the core
router at the datacenter using fiber optic, radio link or
VSAT.
Redundancy: As per the business continuity plan of
the bank, redundancy has been kept for all the devices
installed in the Datacenter, Disaster Recovery Site as well
as the branches. Link level redundancy as well as device
level redundancy has been maintained for all branches
to ensure maximum uptime and better services to
the customers. Link and device level redundancy has
been maintained in datacenter for different network
devices like Core Router, Core Switch, Core Firewall and
Distribution Switch.

Load balancing
Application control engine (NLB) has been used to
provide load balancing facilities for different banking
application servers like core banking, mobile banking,
switching, and e-commerce gateway.

Security
Network security remains essential to protecting data
and privacy. Many services/devices have been installed
to secure PBL network such as firewalls, encryption,
intrusion prevention and intrusion detection. By
combining a few key security features and procedures,
PBL maintains the privacy of data, ensuring the safety
and security of network, and preventing access

to malicious hackers and non-authorized users by


adopting latest technologies. The objectives of the
Network Security procedure are:

To provide an overview of the risks associated with


connectivity to external networks.

To define the security and control requirements to


protect the firm in relation to the protection of the
network perimeter.

To provide security guidance to system


administrators to ensure the continued secure
management of network perimeter infrastructure
as per our central banks security policy.

The security controls are properly applied to reduce


the risks associated with connectivity to external/
internal networks. The implementation of connectivity
with external/internal networks is properly authorized,
authenticated, monitored, encrypted and managed
by IT staffs that are properly trained in networking
technologies.
Monitoring: NMS system with a dedicated NOC team
is in place for monitoring the PBL network. PBL has
the technology to monitor and manage the network
infrastructure.
Access Control System: PBL can monitor and control
the door access and for visitor management and
perimeter monitoring. PBL is equipped with a 32-bit
Windows based GUI point-and-click interface. This
security interface animates whenever activity occurs on
the security system, be it a door opening or a person
entering the datacenter.

CCTV System
PBL is using CCTV systems to monitor the building
premises. Cameras and software are being used to
monitor and record all type of activities.
During 2014, PBL replaced old hardware and systems
for its existing core banking system. This upgrade has
enabled PBL to provide better banking services, both
at its branches as well as through electronic banking
channels (e.g. ATM, POS, KIOSK, Internet Banking,
Mobile Banking, Phone Banking, etc.).

ATM and Transactional Switching Network


The Bank has successfully completed the integration
with Japan Credit Bureau (JCB). Under the network of
PBLs renowned switching system IST, the bank has
currently deployed 161 ATMs and 1,500 POS terminals
and there is a plan to deploy more in the near future. The

123

Annual Report 2014


bank has also successfully completed the integration
with NPS (National Payment Switch) with 30 Banks.
Moreover, using our robust switching system IST, the
bank has been using highly secured electronic payment
system Prime Cash which enrich the customer services
of Alternative Delivery Channel.
Relevant hardware, software and networking gears are in
place to support the banks ADC operations like Phone
Banking, Utility Bills Pay Service, SMS Banking, Prime
Cash, ATM, etc. To ensure uninterrupted and smooth
customer service in all transactional media, IT division
continuously work on performance tuning for database
and application, networking and server hardware on
regular basis.

Video Conferencing System


PBL has implemented Video Conferencing System
to connect with remote branches for strengthening
relationship between Head Office and branches. By using
the system, Management can save time and money by
avoiding long distance travel in order to attend meetings.
Currently, the system has been implemented in few
branches. The bank has a plan to cover all the branches
under the system by the first quarter of this year.

Credit Risk
Management
(CRM)
Risk is inherent in all types of business. However, for
Banks and financial institutions credit risk is considered
to be the toughest. Credit risk is most simply defined
as the potential that a borrower or counter-party will fail
to meet its obligations in accordance with the agreed
terms and conditions. Credit risk management needs to
be a robust process that enables a Bank to pro-actively
manage its loan portfolio in order to minimize losses
and earns an acceptable level of return for stakeholders.
Since its formation, Credit Risk Management (CRM)
Division of Prime Bank is working to maintain a sound
credit portfolio.
In Prime Bank, CRM Division is playing among others the
following major activities:
Assessing risks inherent in the credit proposal
with due diligence i.e.:
- Identification of credit risk
- Ways out of risk mitigation

IT Service Desk

- Evaluate proposed facility pricing

IT Service Desk application is an initiative of IT


Infrastructure & Planning Division to provide effective
and efficient IT support services to the users of the
Bank. Users do not need to call to the IT support staff
for IT services. They have access to the self-service user
interface of IT Service Desk to log their IT services like
incidents, problems, etc.

Monitoring of credit portfolio through review to


ensure sound asset quality.

Communicating the decision of the competent


authority of the Bank regarding credit proposals
and issuing Sanction Advice.

Complying with internal & external regulatory


authorities

The IT Support Staff, who are integral to the IT Service


Desk function, offering different levels of IT support
service, are called Service Desk Agents. These Agents,
Supervisors and Service Delivery Managers use IT
Service Desk extensively for managing day to day IT
Support Operations.

Identifying problematic borrowers through


periodical review of different types of credits,
maintain effective follow-up and supervision
and take all possible measures in time to save
from classification in light of: Structuring,
Adequacy of security, Pricing and profitability,
Financial analysis, Performance, Turnover,
Repayment

To update
Guidelines

To guide/assist Business wings regarding both


the business issues as well as the compliance
issues

Maintain Limit Sanction Register.

IT Service Desk Agents work on requests for IT service


and support from the users of IT services. They are also
responsible for ensuring that all requests for IT Support
or Services are logged appropriately, with all essential
information being recorded in the ticket. They move
the ticket along according to the workflow, to ensure
that the request is appropriately handled and the issue
is resolved. IT Service Desk application serves as a tool
to record all requests received and to guide the Service
Desk Agents towards request fulfillment.

124

- Assessment of credit requirement

Banks

Credit

Policy/Lending

In 2014, CRM Division has emphasized on obtaining


credit rating of its borrower by the External Credit Rating
Institutions (ECAIs) to get relief in capital cushion as

well as to ensure sound credit portfolio in exchange of


the scope to award less pricing benefit to the superior
borrowers. So far under direct persuasion total 394
numbers of borrowers credit rating process has been
completed.
In terms of ensuring compliance, as a division, CRM has
satisfactory complied with the Bangladesh Banks audit
findings and related guidelines in 2014 which will have
direct impact on CAMELS rating.
Last year as per directives of the Board, CRM Division
has started to formulate and modified various policies
like RMG Policy, Scrap Iron Financing Policy, Lease
Finance Policy, Large Loan Financing Policy, Work Order
Financing Policy and HBL Financing Policies which will
be placed to the competent authority for approval
in 2015 to bring the dynamism in banks financing
strategies.

of Banks assets and to maximize stability in assets quality


by reducing the Risk to an optimal level.
During 2014, CAD has completed a number of initiatives
which are listed below:
Completion of Disbursement Centrally: The
task of disbursement of all loans and advances
centrally for all the branches (140 branches) has
been completed in 2014.Presently, all the credit
operation (Disbursement, Adjustment, Closure,
Modification, Restructuring and Rescheduling)
through T24 are done centrally. The Outcome
of Central Disbursement from CAD are:
 Error Free Transaction
 Control Over Unauthorized Disbursement
 Almost zero Operational Risk
 Better Credit Discipline

Completion of eDoc implementation: As a


part of commitment towards ensuring proper
documentation and monitoring, CAD has
already established eDoc in all the branches
of the bank. eDocis the automation process
of security documentation and monitoring as
it allows the electronic archiving of security
documents along with reminder clock for
better monitoring and control.

Completion of Re-arrangement of CAD


Structure: To ensure the proper documentation,
central disbursement, better monitoring and
control over the assets, the rearrangement
process of CAD structure took place in 2013
which was successfully completed in 2014. In
2014, Sanction Advice Unit was established
along with 5other units namely Disbursement
Unit, Documentation Unit, Limit Loading Unit,
MIS, Monitoring & BB Returns Unit and CIB Unit.
This rearrangement is treated as a milestone
towards the centralization of CAD.

Regularization of the Documentation Lapses


found during Re-vetting: To ensure the
strength of our asset portfolio, during 2013
CAD successfully completed there-vetting of
security documents of the borrower whose
total credit exposure is BDT 10 crore and above.
During 2014, strong monitoring was conducted
for regularization of the inadequacies/lapses
found during the re-vetting process and almost
80% of the lapses have been regularized.

External Audit: To detect the documentation


lapses and operational faults,an external
audit was conducted (by A. Qasem & Co.,
Rahman & Rahman Huq and ACNABIN) in
2013 throughout the branches regarding the
customers having exposure of BDT.50 crore

CRM Division is continuously monitoring the credit


portfolio of the Bank. To make it more effective and
faster, the Division has started issuing monitoring the
account position of borrowers based on T24 System
besides branch provided statement vigorously.
Hopefully, this will help more effectively to maintain
sound credit portfolio of the Bank and to reduce non
performing loan ratio.
CRM division is assisting the Management with
generating ideas for new products. For example, jointly
with Business Teams it has adopted Time Loan to meet
financial requirement of valuable borrowers. However, in
the last year, CRM has brought several modifications in
Delegation of Business Power (DBP) of the Bank to make
the approval process smooth and business friendly.
Finally, it is expected that as a part of continuous up
gradation, CRM Division will actively and pro-actively act
to up hold the position of the Bank complying with the
rules and regulations.

Credit
Administration
Division
The functions of Credit Administration Division (CAD) are
basically focused on the post approval activities and CAD
always ensures that proper documentation and approval
are in place prior to disbursement of loan facilities.
Centralized CAD is established with a view to safeguarding

125

Annual Report 2014


and above. Here CAD was entrusted with the
responsibility of coordination of the audit and
in 2014 CAD was engaged in close monitoring
and maintaining liaison with the branches
for regularization of the inadequacies/lapses
found during the audit.

Training on eDoc, Documentation, Legal Issues


and CIB: In 2014, CAD completed eDoc training
for all the branches and some divisions of
Prime Bank Limited. In addition, CAD arranged
the training covering the documentation, legal
issues and CIB for almost 100 Credit Officers of
Dhaka, Sylhet and Rajshahi Zone.

Internal
Control &
Compliance
Division
Identifying, measuring, controlling & monitoring
of various types of risks are vital for ensuring good
health of a bank as well as its whole financial system.
For managing risks, Prime Bank Limited uses different
risk management tools, including Internal Control
and Compliances. Internal Control & Compliance
is a management process formulated to achieve
effectiveness and efficiency of operations, reliable
financial reporting as well as compliance with the
existing laws and regulations of Bangladesh Bank and
other regulatory bodies to supervise and control the
risks or business activities of the Bank.
As per BaselII accord, operational risk and supervisory
review is clearly focused in the Pillar- 1 & Pillar- 2. At
the same time considerable importance has also been
given on internal control & compliance, supervision
and monitoring. As prescribed in the Bangladesh
Bank core risk guidelines on Internal Control and
Compliance, Management Committee (MANCOM) of
Prime Bank Ltd reviews the overall effectiveness of
Internal Control Systems.
To comply with the changes brought in the Bank
Companies Act 1991 and the Bangladesh Bank
Circular No. 11 dated October 27, 2013, ICCD has
been restructured and started its functions with three
departments named as a) Monitoring Department; b)
Compliance Department and c) Integrity Management

126

& Vigilance Department. Since its inception, ICCD has


been fulfilling its responsibilities successfully such as:

Constantly reviewing the internal control


structure and mechanism, with the emphasis
being placed on regulatory requirements,
Bangladesh Bank risk guidelines, processes,
systems and specific controls to ensure that
high risk areas are regularly reviewed and
monitored.

Spot checking of the Branch activities through


surprise audit to find out major lapses and
irregularities.

Monitor the operational performance of


the branches especially through DCFCL
and Quarterly Operations Report (QOP) at
prescribed frequencies i.e. daily, weekly,
monthly and quarterly and to regularise
the detected lapses/irregularities. Update
the control points in DCFCL in accordance
with Bangladesh Bank guidelines, laws and
regulations, Risk assessment matrix etc.

Compiled information on Internal Control and


Compliances, General Banking & Operations,
Loans & Advances and ICT, preparation of Self
Assessment of Anti Fraud Internal Control
Report and duly submit it to Bangladesh Bank
on a quarterly basis.

Co-ordinate with Bangladesh Bank and the


customers to solve the complaints raised by the
customers directly and through Bangladesh
Bank and reporting to Bangladesh Bank.

Undertake measures to control irregularities


in policy, procedures and guidelines through
MIS such as parking & internal accounts, Asset
liability mismatch, suspicious expenditures and
errors in transfers & postings both manually
and automatically.

Ensure full compliances of regulatory


requirements and Bangladesh Bank as well
as Internal Audit annotations. Compiling all
relevant circulars & guidelines and maintaining
strong liaison with regulatory authorities.

Follow up of the decisions taken in the


MANCOM, Board Meetings, EC Meetings,
Audit Committee Meetings, Risk Management
Committee Meeting and IT Steering Committee
Meetings.

Conduct surprise visit to the Branches and


head Office randomly to identify the lapses/
irregularities as well as perform emergency
investigation as per instructions of the
Management.

Anti-Money
Laundering
Department
Bangladesh Bank through BRPD Circular No. 17 dated
October 07, 2003 among others advised all scheduled
commercial Banks operating in the country to put
in place effective risk management system which
includes Money Laundering Risk Management. Money
laundering, a criminal act recognized all over the world
has very severe consequences in the economy and
security of the society.
PBL has updated Anti Money Laundering Guidelines
immediately after enactment of Money Laundering
Prevention Act-2012, which includes Senior Management
commitment to the anti-money laundering program.
The Management has evolved such a culture for the
Bank so that all the employees strictly adhere to each
and every provision of Money Laundering Prevention
Act 2012 and Anti-Terrorism Act-2009 with amendment
in 2012. Later a Circular was issued for compliance of
the Anti-Terrorist (Amended) Act-2013. All employees
of the Bank, irrespective of the position they hold, are
accountable to the Top Management and regulatory
body for their activities which might directly or indirectly
relate to money laundering.

Solution of the problems/issues as and when


received from BFIU of Bangladesh Bank

Compliance of Bangladesh Bank requirements


from time to time and attending all bi-monthly
meetings of Central Task Force arranged by
BFIU of Bangladesh Bank

AML Department has arranged four training


programs in Chittagong, Sylhet, Jessore and
Bogra where total 206 participants received
training on prevention of money laundering
and terrorist financing

As per requirement of AML Department,


HRTDC arranged total seven Training Programs
on AML for the Officers who didnt received any
AML Training within last two years. Total 302
participants from different branches received
the training

AML Department and HRTDC jointly arranged


total three workshops on FATCA where
Operation Managers from all our Branches
attended

Internal Audit & Inspection Teams have


conducted AML inspection on our branches
to find out the lapses in anti-money laundering
issues

Surprise visit have also been paid by AML


Department on our 64 branches to detect &
rectify the weakness in AML activities and to
build up awareness among the employees

Follow-up and monitoring of Audit Report


(related to anti-money laundering) as and when
received from Banks Internal Audit Division
and External Auditors of the Bank

Conducting warm-up session round the year


for updating knowledge of the new Money
Laundering Prevention Act-2012 and AntiTerrorism Act-2009 (with Amendment in 2013).

Activities of Anti-Money Laundering Department during


the year 2014 included:

A message sent from the desk of Managing


Director on January 06, 2014 to all employee of
the Bank for ensuring compliance in AML issues

Submitted Reports to Managing Director on


quarterly basis regarding AML activities

Use of Uniform A/C opening Form as prescribed


by Bangladesh Bank

Declaration of Transaction Profile has been


obtained for all accounts

Reporting of Cash Transaction Report through


CD media & goAML software as per instruction
of Bangladesh Bank

Reporting of Suspicious Transaction Report to


Bangladesh Bank was regular

Reporting of Unusual Transaction to Central


Task-Force was regular

Collected and reviewed the Self Assessment


Report from the Branches and take corrective
actions when needed

Finance
Finance Division covers a wide range of activities from
the basic record keeping for providing information
to assisting managers in making strategic decisions.
Finance department is responsible for all the day to day
transactional accounting for the bank. This includes
tracking of all transactions, informing management
of any irregularities and ensuring proper regulatory
reporting on a timely basis.
Finance department prepares the banks budgets
and forecast, and reports back on the progress to
management through the year. This information can be

127

Annual Report 2014


used to plan for important decisions regarding deposit,
loans and advances, staffing levels, asset purchases,
expansions, cash needs etc. before they become
necessary.

potentials fully as well as benefit the organization by


demonstrating value creating behaviours. A group
of motivated and engaged employees with diverse
talents are one of the strengths of Prime Bank.

Management accounting information is provided to


managers so they can use it to monitor the operations
and decide where further attention is required.
Management information will include some nonfinancial information as well and is communicated to
branch managers in a way that is easy to understand.

Prime Bank has a special focus on converting the human


resources into the human capital, i.e., knowledge,
competency, attitude and behaviour embedded in
employees.

Management of capital adequacy ratio (CAR) and


reporting on a quarterly basis to Bangladesh Bank is
another important area of the finance division. Also,
arrangement of funds through different sources and
advising management the most cost effective way in
raising such capital are other significant activities of the
Financial Administration Division (FAD).

The recruitment and selection of Prime Bank follows


the best fit approach. As per Banks requirement,
Human Resources Division ensures that the potential
candidates are properly assessed, selected and
placed on-time as per required competencies (KSA
Knowledge, Skill & Attributes) and experience. Prime
Bank has a recruitment policy that clearly states the
criteria and procedures to recruit fresh and lateral
entrants.

Corporate Tax/VAT administration and arrangement of


getting the assessment done in proper time is a major
role of the division. Deferred tax calculations are being
done very precisely to ensure that PBL is saving on
income tax whenever the opportunity arises. FAD is now
more compliant with regulatory guidelines which gives
PBL additional comfort of avoiding any future risks of
complications and ensures utmost tax savings.
Finance Department is often call upon to provide
information to assist management in making key
strategic decisions, such as which markets or projects
to pursue or the payback periods for capital planning
and investment. The MIS wing of FAD is very active in
providing analysis of loans and advances and deposits
to management on a timely basis and also closely
monitoring costs of all branches in PBL and giving
reports about each branch on a timely basis to the
competent authority.

Human
Resources
Development

Recruitment and selection process

The Bank has a Management Trainee Program which


is aimed to recruit outstanding fresh graduates and
develop them as the future leaders of Prime Bank Ltd.
In 2014, the Bank selected a total of 176 fresh candidates
as Management Trainees from a pool of 28,567 applicants
after multiple written tests and interviews.

Balanced workforce diversity


Prime Bank believes that diverse, heterogeneous teams
generate greater creativity, innovation and business
development. Prime Bank is aware of the fact that
an inclusive culture maintains and drives workforce
diversity by fostering the exchange of ideas and
collaboration among individuals and across groups. To
speak simply, the constant success of PBL depends in
part on maintaining a plurality of perspectives.
Besides, the ration of male and female employees has
been increasing over the time. Currently, approximately
602 of the employees are female.
Gender diversity among employees:
Gender

No. of Members

Percentage

Male

2265

79.0%

Female

602

21.0%

Total

2867

100.0%

Human Capital
Prime Bank Limited has a favourable image as an
employer of choice. The Bank has positioned itself
with a performance-driven rewarding work culture;
where employees are treated with respect and
receive widened opportunities to realize their diverse

128

Increasing percentage of Female over the years:


Year

% of Female Employees

2011

18.59%

2012

19.77%

2013

20.52%

2014

21.00%

Competitive compensation & benefits


package

% of Female Employees
% of Female Employees
21.00%
20.52%
19.77%

18.59%

2011

2012

2013

competent professionals with strong leadership skill.


The banking sector is complex and diverse with evolving
nature of threats and the risks. So, the training module
is updated time to time for employees of the Bank in the
changing context of financial market.

2014

Learning & development opportunities


Prime Bank continuously thrives to transform Human
Resources to Human Capital through appropriate
learning and development initiatives in every aspects of
work area. HR Division regularly undertakes effectively
designed training programs targeting the right group of
employees through proper training need assessment.
The Management Trainee Development Program of
Prime Bank is designed for newly recruited Management
Trainees (MTs) who receive job rotation across the
country and different functions in a structured process.
This effectively designed program provides ample
opportunities to acquire necessary knowledge, skills and
on-the-job-experience. All the MTs who were recruited
in 2014 are going through the development program.
In 2014, Prime Banks internal HR Training and
Development Centre arranged training on 62 different
topics for 4,370 enthusiastic participants. Besides, a total
of 644 employees were sent to participate in various
training programs/conferences in home and abroad.
In total, the number of participants who participated in
trainings/conferences has increased by 48% over the
last year.
The whole capacity building efforts is pivoted on
the unique understanding of banking sector as well
as required behavioural skills to create a group of

Prime Bank has a flexible compensation and benefits


system that helps to ensure pay equity, is linked with
performance that is understood by employees, and
keeps in touch with employee desires and whats
coveted in the market, while maintaining a balance
with the business affordability. The compensation and
benefits are regularly reviewed through market and peer
group study. The well-crafted total rewards help the
Bank to attract, motivate and retain talent that produces
desired business results.
All employees are paid competitive remuneration package.
The structure and level of remuneration are reviewed time
to time based on Banks performance and affordability.
Other than monthly competitive base pay and a
good number of allowances, Prime Bank has variety
of market-competitive benefits schemes. The various
cash and non-cash benefits include: Company car
for Top Level Executives, Car maintenance allowance,
Leave fair assistance allowance, Medical treatment
allowance, Maternity benefits, Car loan facility, House
loan facility, Staff loan at discounted interest rate,
House furnishing allowance, Travel allowance, Festival
bonus, Annual leave etc.
PBL also provides long-term as well as retirement
benefits to employees, like: Leave encashment,
Provident fund, Gratuity benefit, Retirement benefit,
Partial and full disability benefit, Death benefit to family
members etc.

Career growth with Succession planning


PBL always plans for employees so that they can advance
their career goals. This includes advancement into more
responsible positions. The company supports career
opportunities internally so that talented employees are
placed in upgraded positions and thereby enables them
to deliver their greatest value to the organization.
In addition to vertical career growth, employees may
also grow horizontally. Whenever possible, Human
Resources Division mobilizes employees across different
functions and branches; thus assisting them to progress
with varied skills and experience.

129

Annual Report 2014


Besides encouraging individual employee growth and
development, the Bank also gives effort to identify
and retain the human resources who can potentially
be the successors of mission critical roles. Prime Bank
acknowledges that Succession Planning & Management
is vital to the continued success of the Bank. So, the
Bank continuously assesses organisational, divisional
and team capability gaps to identify, develop and retain
the successors in a timely manner to meet the demands
of the future.

Comprehensive performance management


program
Prime Bank has a comprehensive performance
management program that evaluates employees
yearly performance against business targets at
the year-end. The performance evaluation is a step
by step by process where an employee first rates
himself/herself. Then she/he is rated by the first
level supervisor and then finally by the second
level supervisor. To ensure a proper performance
evaluation and rate the employees based on their
comparative performance, the line Management
is guided by the Human Resources Division. This
performance appraisal system is considered as
crucial for the Bank as this is a very important tool
to identify and distinguish the performers and
non-performers. Prime Bank believes that a wellexecuted performance appraisal system can help
to reward the deserving employees, as well as help
to ensure further development program for the rest.
The comprehensive performance management also
includes an assessment of employees functional and
leadership competencies. This appraisal process helps
to identify the competency gap and training needs of
employees. All permanent employees of PBL undergo
annual performance appraisal process.

Reward & recognition program


The Bank has a well-designed Reward & Recognition
program that gives special attention to employees
actions, efforts, behaviour and performance. It meets
the intrinsic psychological need for appreciation of

CEOs Banker with Exceptional Service Traits


Award (BEST)

Outstanding Recovery Initiative Award (ORI)

Commendable Branch Performance Award


(CBPA)

Trainees with Outstanding Performance Award


(TOP)

Around the Year Appreciation Award (AAA)


etc.

Ethics and compliance


Prime Bank is always committed to establish the highest
level of business compliance and ethical standard.
The Bank has an Employee Code of Ethics and
Business Conduct a framework of ethical behaviour
for all the employees of the organization.
Prime Bank maintains its reputation as a law-abiding
organization and a good corporate citizen. It complies
with all the prevailing laws and regulations of the country.
Employees are trained and guided to conduct business
in compliant manner. The policy and procedures
regarding Prime Banks business process are prepared
in adherence to the laws and regulations.
All employees are properly inducted to comply with
Code of Ethics and conform to the relevant laws and
regulations. HR Division makes sure that during joining
employees read, understand the Code of Ethics and
Business Conduct and acknowledge the same by
signing.
The Board of Directors of Prime Bank approved the
Employee Code of Ethics and Business Compliance
with a commitment to set the high ethical standards
so that customers expectations and interests are
protected in a compliant manner.
Employees are encouraged to report any wrong-doing
within the Bank. The Head of Internal Control and
Compliance and Human Resources Divisions are the
primary channel to report any incident.

Openness in communication to foster the


exchange of knowledge and ideas

employees efforts and supports business strategy


by reinforcing certain behaviours (e.g., extraordinary
accomplishments) that contribute to Banks success.
Followings are the different cash and non-cash awards
given to employees for their exemplary works:

130

The Chairmans Star of the Stars Award (CSS)

Prime Bank promotes, recognizes and executes great


ideas. This is possible because the Bank encourages
knowledge sharing, open house discussions, employeemanagement meets, etc. Employee communications
and consultation are the lifeblood of any business. Proper
exchange of information and instructions help the Bank

to function efficiently and provides the opportunity to


develop greater trust in discussing issues of mutual
interest. To ensure effective employee communications,
management takes a positive lead.
In addition to day to day regular communication,
Prime Bank arranges Regional Town Hall Conference,
Managers Conference etc. to allow employees with
the opportunity to interact with the Management and
Board of Directors. This helps to build an improved
management-employee relation.

The relentless pursuit of HR Division continues


throughout the year. Furthermore, it aims to ensure
excellence in all HR policies and practices in line with
the mission and vision of the Bank. Followings are some
of the mentionable activities done in the year 2014:

Phase wise implementation of HR Plans and


Programs

Prepared a comprehensive MT development


program and completed its implementation

Developed several automation projects


including Performance Appraisal System to
enhance employee efficiency

Initiated and developed Broad banding pay


structure policy for employees to attract,
motivate and retain performers

Prime Bank is moving forward with the transformational


initiatives in order to grow up with the challenge of
tapping opportunities to meet both organizational and
employee needs. The transformational phase started
with introducing HR as Strategic Business Partner
which already generated value in people & process
management. Prime Bank is working to ensure an
employee centric work culture with automated HR
services & delivery and with focused skill development
for employees. In coming days HR will pursue solid
contemporary thoughts and action plans to draw results
in many fronts as the Change Agent for Employee &
Business Development. Followings are some of the
future priorities of HR Division:

Talent Management Program

Skill Gap Assessment and develop Performance


Improvement Plan (PIP) for the employees

Work on Employer Branding & Employee


Relations Initiatives

Under development phase: TA/DA policy,


employee Code of Ethics and Anti-Harassment
Policy, MAT Policy, Review of Leave Policy,
Service Rule Book Update etc.

Human Resources Accounting

Achievements of 2014 and Future Plan

Improve the overall performance


management process and ensure a
performance based work culture

To understand and draw an inference on how well


the Human Resources are yielding on the investment
made, Prime Bank tracks the profit and related HR
costs. In this process, the costs of recruitment, training,
compensation other direct cost related to employees
are measured to estimate the overall investment. The
costs are then compared with several parameters. This
analysis helps the Bank to have an outlook and make
prudent decisions on future HR investment. Valuing
the human resources and measuring the direct impact
of the cost spent for employees is difficult as there
is no specific or widely adopted method. Human
Resources accounting is the process of valuing human
resources as assets. Presently, this is not accounted
in the conventional accounting practices. The period
of existence of a set of human resources in an
organization cannot be predicted; hence treating and
valuing them as assets in strict sense is not plausible.
However, Followings are some of the parameters which
are tracked year on year.
(Tk. in Million)
Particulars

2014

2013

Salary cost per emp.

1.15

1.08

Operating cost per emp.

2.01

1.99

Operating income per emp.

4.15

4.75

Profit before provision per


emp.

2.15

2.76

Profit before tax per emp.

1.14

1.27

Review, Update, Document & Rollout Job


Description,Key Performance Indicator (KPI) for
employees

Salary cost as percentage of


operating cost

57.19

54.55

Review HR Policies & Procedures


communicate to employees

Salary cost as percentage of


operating income

27.62

22.90

and

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Annual Report 2014

Marketing
The banking sector is becoming increasingly
competitive around the world. Now banks are striving
hard to grab customers share of mind. Optimum brand
visibility is very essential to be on top of the minds of
potential customers. Developing long-term relationships
with the key customers is an effective way for banks to
be differentiated from its competitors. Consequently,
marketing efforts by banks are more focused and
market driven now. Some of the marketing initiatives of
Prime Bank in 2014 are highlighted below:
Golf Tournament: Prime Bank has been sponsoring
Golf Tournament at Kurmitola Golf Club (KGC) since
2001 and it has become an annual event in the Golfing
Calendar of KGC. The members of the Club are mostly
dignitaries, high officials, diplomats and business
tycoons of the country. Therefore, participating in the
tournament allows the bank an opportunity to promote
its brand along with various products targeted to the
leading group of the society such as Platinum Card,
Premium Banking etc.

My First Account Campaign and School Banking


Conference: Prime Bank believes children should be
nurtured and inspired to achieve their aims as they
are the eventual representatives of the nation. Prime
Bank encourages the children to carry out the saving
tendency from childhood by introducing a school
banking account My First Account. The rationale for
launching the school banking account is to convert My
First Account holders to loyal valued clients in the future.
A school banking campaign was launched to promote
My First Account at 100 Schools in Dhaka and it was
turned to a great success as well. Moreover, the bank
participated in school banking conference organized by
Bangladesh Bank and won the first prize for stall design
at Sylhet on May 03, 2014.

My First AccountCampaign on May 03, 2014

Tee Off in Golf Tournament on February 22, 2014

Celebration of Bengali New Year: Prime Bank family


celebrated Bengali New Year through a social gathering
among the employees, management and the honorable
Board of Directors of the Bank. The honorable Board
of Directors interacts with the Management and
employees of the Bank in this cultural event. This is how
the corporate culture of the Bank helps to inspire the
employees.

Prime Bank Stall Design in School Banking Conference

Prime Bank Family Celebrated the Bengali New Year on April 14, 2014

132

Childrens Art Competition: Prime Bank organized


a Children Art Competition among the employees
children of the Bank. Children are the creators of their own
dreams and they paint those in colorful canvases. The
Bank inspired the children to express their imaginations

on my first savings and my dream country in the art


competition. Prime Bank believes children should be
encouraged to achieve their ambitions as they are the
prospective spokesperson of the nation. This is why the
Bank has prepared the calendar of 2014 with the colorful
arts of the children to motivate them to move forward
with their talents.

done following the rules of the football tournament. The


retail sales team scored in the tournament by selling retail
asset products and thus the seller with the highest score
became the champion. The champion sales team was
awarded by Dhaka- Katmandu-Dhaka air tickets.

Press Advertisement on Retail Asset Tournament 2014 Campaign

Prime Bank Organized Art Competition among


Employees Kids on May 17, 2014

JCB Card Launching Ceremony: Prime Bank


introduces JCB International Cards, the 1st Japanese
global payment brand in Bangladesh. JCB International
Cards were launched through a spectacular event at
the Radisson Blu Water Garden Hotel in Dhaka. The
influential community of the society was present to
grace the gala event. Being the pioneer, Prime Bank
represented Bangladesh to Japanese through an
amazing cultural program.

Hajj Deposit Campaign: Prime Bank initiated Hajj


Deposit Campaign installing a stall at 7th Hajj and
Umrah Fair in 2014. Now hajj pilgrims are able to deposit
their hajj fee in all the branches of Prime Bank easily.
Prime Bank distributed 6,000pcs mobile SIM cards to
hajj pilgrims for easy communication from Saudi Arabia
to Bangladesh.

Mobile SIM Cards Distribution to Hajj Pilgrims

The Cultural Program in JCB Card Launching Ceremonyon


June 04, 2014

Retail Asset Tournament-2014: Prime Bank Limited


launched a sales campaign titled Retail Asset
Tournament 2014 for its employees across the country.
The campaign was kicked off on the eve of World Cup
Football Tournament-2014 to achieve yearly retail asset
target. The full process of contest of the campaign was

Launching of Monarch: Prime Bank launched Monarch,


a premium banking service in Bangladesh, through
an event at one of the Premium Lounges of Monarch.
The Bank introduced Monarch with a new vision to
manage the wealth of the premium clients and enrich
their lifestyle with a complete range of financial services
tailored to their needs. The launching campaign was
comprised of diversified marketing activities. Moreover,
all the official stationeries were re-branded in line with
the theme of Monarch. A separate website www.
monarch.com.bd is maintained for the premium clients
with full of information on exclusive privileges and high
value services offered to the Monarch.

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Annual Report 2014

Prime Bank Launched Monarch on October 27, 2014

Prime Bank Eye Camp: Being one of the major


contributors in economic development of Bangladesh,
Prime Bank has its social development responsibilities
as well. With that vision, Prime Bank established Prime
Bank Eye Hospital in 2012 which is running successfully
under the supervision of Prime Bank Foundation. Since
avoidable blindness is one of the major health care
problems in Bangladesh, Prime Bank organized 24 eye
camps in the remote areas all over Bangladesh in 2014
to give free eye treatment to the under privileged people
of the society. Prime Bank also utilized this opportunity
to promote the biometric smart card Prime Cash to the
rural and marginal communities of the country which
eventually help the Bank to achieve its goal of inclusion
banking. Moreover the products of SME Banking and
Retail Banking were also promoted in the eye camps.

of business avenues can also be explored and existing


business can be also given new dimension to increase
the business volume and sustainable growth. Most
importantly, what the customer/stakeholders think about
the organization and its peer organization, determine
competitive advantage. To gather the insight, there is no
alternative to qualitative and quantitative studies.
R&D division of the Bank undertakes research studies
to provide reliable, accurate, valid information on
economy, market, customer and contemporary issues.
Considering the business trend, present scenario
and forecast- R&D designs and re-engineers products
and services, gathers consumer insight, proposes
prospective location for banking business,analyses
sectors, disseminates knowledge through economic
publication and undertakes ad-hoc research.

Market

Economy

Banking

Consumer

R&Ds Priority Areas

Major activities performed by the R&D Division in 2014


are highlighted below:
R & D Divisions Focus

Free Eye Treatment in Prime Bank Eye Camp at Kulaura,


Sylhet on December 15, 2014

Performance of
Research and
Development
(R&D) Division
A keen understanding of environmental analysis and
the industrys dynamics play a crucial role in formulating
strategies for growth and operation. Data, information
and insight gathered through systematic process help the
business to take the right decision. Besides, opportunities

134

Market
Research

New Product
Development
Product
Reengineering
Consumer
Insight

Operations
Research

Business and
Economic
Policy
Research

Branch
Expansion
Program (BEP)
ATM
Expansion
Program

Monthly
Newsletter
In-Focus
Weekly
e-Newsletter
Miscellaneous
Functions

Sector
Research

Commodity
Business
Priority
Sectors

Market Research
Product Development
New Product Development: R&D Division
designed some new asset products for
SME Division as per refinance program of
Bangladesh Bank. SrijonRin was introduced
for Publishers of Knowledge based books &

creative writings and Green Financing Product


Development with GBC.

Sector Research on Local Industry

Product
Re-engineering:
The
division
also modified features of existing deposit
products and services as per market demand
to attain & retain market share. Products are
such as - Double Benefit Deposit Scheme
(DBDS), Monthly Benefit Deposit Scheme
(MBDS), Contributory Savings Scheme (CSS),
Account 150% , Prime Millionaire Scheme,
LaksmaPuron Deposit Scheme,
Brighter
Tomorrow Deposit Scheme and Nobagoto
deposit scheme (Conventional and Islamic)
responded to changes in the macro
economy. Revision of interest rate, tenure
and all the applicable installment sizes for the
mentioned scheme products had been done
following suggestions of the Banks ALCO.

R&D Division provides up-to-date information on the


industry/sector as per instruction of the Board of
Directors of the Bank. In addition, it is also a requirement
of CRM of the Bank and different business unit of the
Bank. In this regard, R&D Division has already prepared
and submitted a number of reports to Corporate
Banking Division, Structured Finance Department, and
CRM as part of Board and EC requirement:

Research and Development (R & D) Division

To improve level of customer satisfaction


through differentiated services or to reduce
their dissatisfaction is a continuous process of
an organization. In this regard, Ensuring Service
Quality Project was approved by the Board
and Management of Prime Bank Limited (PBL)
to ensure and improve customer satisfaction.
Besides, the Bank has also approved to conduct
comprehensive Customer Satisfaction Survey
(CSS) at our branch level covering all divisions
of Bangladesh in 2014. This is also to comply
with Bangladesh Banks Financial Sustainability
Report,
to
improve
banker-customer
relationship as part of the Financial Integrity
and Customer Services Department (FICSD)
and to ensure reporting to the Bangladesh
Banks Off-site Supervision Statement CAMELS.

Exploratory study on Prime Campus

Provide strategic input into different marketing


projects such as documentary preparation and
branding

Conducted studies on physically challenged


people in order to design new loan products
under Cottage, Micro and Small Enterprises
segment for availing refinance scheme from
Bangladesh Bank

Conducted studies on feature analysis on 11


Deposit products of the Bank & its peer banks
and submitted to the ALCO for understanding
market trend

Conducted studies on customer perception,


business prospects & performance of gold
backed loan product based on primary as well
as secondary data.

1.

Rice Bran Oil Industry in Bangladesh

2. Steel Structure and Pre-Engineered Buildings


(PEB) in Bangladesh
3. Plastic Industry of Bangladesh
4. Commodity Market-Watch Report on six
commodities-Rice, Wheat, Sugar, Cotton,
Edible Oil and Maize
5. Study on Inland Water Transport Sector
6. These reports have provided market
information focusing on size of market, total
supply, production capacity/utilization, top
market players, future outlook/prospect of the
respective industry based on secondary as well
as available primary data.

Operations Research
Feasibility Studies for Branch Expansion Program
(BEP) & ATM: The Business Feasibility Study is one
of the crucial and frequent studies undertaken by
R&D for serving the bank in setting up any Branch

135

Annual Report 2014


or ATM Booth at recommended and prospective
areas throughout Bangladesh. To explore potential
geographic locations where the bank can extend
its services to contribute to the socio-economic
development of the area, Feasibility Studies have
been conducted on around thirty (30) locations all
over the country for new branch and ATM expansion
and business growth. To carry out the study, data on
geographical, demographic, business, financial and
economic data are analysed in a holistic manner. The
feasible areas are proposed in such strategic places
which are also convenient for residential as well as
business customers.

After

launching

the

much

establish the Project Management Office (PMO) in


the Bank. PMO has been successfully aligned with
the strategic goal of PBL through its involvement
in organizational projects for achieving strategic
objectives. In fact, PMO is working as a strategic
been a long time PMO has started working in its

acclaimed

publication In-Focus with new concept,


layout and design along with its online
version in an interactive manner,the InFocus has carried its journey by delving
on contemporary issues that are critical to
global and domestic economy as well as
financial markets and institutions.

It was a visionary decision of management to

entity of PBL management. Although it has not

Business and Economic Policy Research

Project
Management
Office

Besides, a weekly e-newsletter is being


disseminated to provide financial insights to
valued readers on a weekly basis.

full capacity, it has already accomplished several


projects effectively.
Developing IT & IS Policies& Procedures and
Business SOP Reengineering are the two of its
major finished projects in 2014. These projects are
related to PBL strategic objectives of Organization
Development
functional

&

Service

importance.

Excellence
These

IT

&

with

huge

IS

policy

and procedures has been developed based on


international leading practices including CobiT, ITIL,
BS15000 and ISO 27001 standards. In addition, these
IT & IS policies and procedures positively affects

Miscellaneous Functions

PBLs IT governance and management system and


helps increase information security.Business SOP

Study on the Risk Management Framework of

re-engineering aims at continuing development

other Banks to support RMD for incorporation

and deployment of controlled operation systems

in their proposed framework.

for enhancing operational excellence and reducing

Assessment of Perception regarding Vision

business risk.

and Mission of the Bank

Data collected from Bureau of Manpower


and Training Center and Bangladesh Bank
for preparation of Report on Division Wise

PMOs main focus is on

methodology

Remittance Inflow to Bangladesh for strategic

Guidelines for Green Uddogta Award

Supplying

Socio-economic

data

platform

of

Measuring and ensuring not only project


schedule and budget, but also tracking team
activities whether they are meeting project

to

objectives.

Management as and when required

R&D will come up with innovative and insightful


research to support the Banks vision in being the best
commercial bank.

136

and outcomes to achieve project goals.

on

performance indicators to measure progress

Analysis of Green banking practices in the


Industry

based

standardized practices. It then implements key

move of the Bank

Establishing a formal project management

Creating metrics and tracking all project data


that will give executives a holistic view of the
projects. This transparency will help the senior
management connect project success to
organizational success.

Information
Security
Department

information systems from unauthorized access, use,


disclosure, disruption, modification, perusal, inspection,
recording or destruction.

Information security Department plays an important


role in protecting the assets of an organization. As no
single formula can guarantee complete security, there
is a need for a set of benchmarks or standards to
help ensure an adequate level of security is attained,
resources are used efficiently, and the best security
practices are adopted.

PBL is one of the pioneer bank in Bangladesh to realize


the need of information security in todays technology
dependent banking service. Understanding the
importance of Information Security, PBL formed an
Information Security Department on December, 2013
with a vision of providing information security services
and expert security guidance to all employees of Prime
Bank Limited (PBL) to ensure confidentiality, integrity,
and availability of the information assets and resources
according to PBLs Information Security Policy and
Bangladesh Banks regulations and guidelines.

Since we are living in the era of Information technology


and like other organizations, banks in our country are
emerging with new ideas and technologies to provide a
user friendly and flexible banking service to customers.
With emerged information technologies, new and
unknown treat and risk are also moving into the industry.
At this point, the Information Security Department
approaches with a notion of protecting information and

To fulfill the vision, ISD (Information Security Department)


is following globally accepted management system
standard ISO 27001 to manage Information Security. The
department is also working toward ensuring the security of
Payment cards (Debit/ Credit cards) by following Payment
Card Industry Data Security Standard (PCI DSS).PBL has
also adopted globally accepted IT/IS Risk Management
framework to manage the information security risk.

137

Annual Report 2014

Report on Risk Management by


Chief Risk Officer
Identifying, measuring, monitoring and controlling
various type of risks are vital for ensuring the health of a
Bank as well as the whole financial systems. In addition
to the traditional risks faced by the Banks in credit and
market risks, various operation risks are created due to
following reasons:

Increasing use of automated technology

Growing importance of IT integration and shared


services across financial institutions and entities

Necessity of reducing earnings volatility and


achieving cost efficiencies

Shifting from vanilla type products to technology


based products which are creating more complexity
in product and product development

Increasing customer needs

Evolving outsourcing arrangements and increasing


dependency

Increasing focus by regulators on legal, fraud, and


compliance issues

This has necessitated development of enterprise wise


risk management framework for the Banks. Prime Bank
Limited (PBL) is increasingly focusing on development
of appropriate risk management framework for
managing risks of the Bank. Risk Management Division
has been set up which shall monitor and report various
type of risks and develop appropriate risk culture within
the Bank. The Division has been working on identifying
the gaps in the risk management procedure of the
Bank, placing those issues to Risk Management Unit
comprising of members from all key business / risk
areas and following up for rectification. Major activities
of RMD include preparing Risk Management Paper,
performing stress testing, vetting of different Product
Program Guidelines, process manuals, developing
various risk models and acting as an operation layer for
Internal Capital Adequacy Assessment.

Credit Risk Management


Increased focus has been given in managing Credit
Risk Management. Total Credit Administration Process
has been centralized which have mitigated various risks
arising from human error in branch banking. Similarly,
98% of Branches came under the umbrella of centralized
Trade Service process during the year 2014. To reduce

138

the residual risks the security related documents were


revalidated by legal firms and also cross examined by
the independent audit firms. Corrective measures have
been taken as per the audit report issued. Periodical
Stock verification and insurance coverage has been
made mandatory before sanctioning or renewing any
credit proposals. Since the Bank has significant exposure
in RMG sector, a separate Merchandiser Team has been
formed with people having adequate experience in
RMG operation. This has enhanced the Banks capability
to identify risks and mitigate them on time. In order
to shift to risk adjusted return on capital (RAROC),
borrowers rating is considered while considering any
price adjustment. This is encouraging the borrowers to
come under rating procedure of rating agencies.

Operational Risk Management


Internal Control and Compliance Division is responsible
for monitoring the transactions of the branches as per
guidelines to develop a compliance culture. The division
has adequate manpower to monitor the operational
risks in banking transactions. They are being monitored
based on both offsite and onsite supervision.

Information Technology Risk


PBL has an IT audit team, which has been formed as
per the Central Banks guideline. The team conducts IT
Audit in each branch on a periodic basis and provides
suggestions to higher management. Moreover,
independent IT Security Department has been formed
to assess the IT related risks faced by the Bank and
suggest appropriate measures to mitigate risk.

Market Risk
Market risk is actively monitored by the Treasury Division
of the Bank. As per stress testing, the Bank is unlikely to
face any major risks in liquidity, interest rates and foreign
exchange. A system based Value at Risk (VaR) Model is
being used by the Bank to assess the risk related to the
Foreign Exchange position. Treasury Mid office monitors
risk limits including position limits and stop loss limits
for the trading book and reviews periodically. Interest
rate risk is monitored through the use of re-pricing gap
analysis and duration analysis.

Environmental & Social Risk


PBL has incorporated ERM policy in the CRM policy
manual and made Environmental Risk Rating (EnvRR)
and Environmental Due Diligence (EDD) mandatory in
the credit proposals. PBL have already made some Direct
Green Finance in HHK projects, ETP installation projects,
Bio-Gas plants etc. The Bank has already installed solar
panels at 21 branches as well as 12 ATM booths and SME
unit offices as part of its commitment to the usage of
renewable energy resources. Training & Development
Center of the Bank arranged 12 Green Banking training
Programs for 403 employees during 2014 to familiarize
with the Green Banking aspects. The Bank arranged a
customer awareness program in Jessore on March 19,
2014 to create awareness among 120 participants to
protect the environment from different pollution and
hazards. Yet our effort will continue for making our
business sustainable which will ultimately improve the
quality of life in the long run.

Pillar 1 Risk Management


PBL has been maintaining capital above the minimum
capital requirement as against Credit, Market and
Operational risk. The Bank has proper credit risk
mitigation process in place. Moreover, PBL is consistently
trying to rate its corporate borrowers not only to have
expert opinion on the borrowers but also to have capital
relief. PBL has 66.32 percent of total eligible corporate
borrowers of the Bank rated through External Credit
Assessment Institutions (ECAIs). Through borrower
rating, PBL achieved capital relief of 6971.10 million
during 2014 compared to capital relief of 5796.40
million during 2013. Proper organizational structure
and procedures are also in place to ensure mitigation
of operational risk and market risk. PBL was well ahead
of minimum capital requirement of 10 percent in all the
four quarters of 2014. Capital Adequacy Ratio of the
Bank was 12.26% at the end of March, 11.57% at the end
of June, 11.72% at the end of September and 12.64% at
the end of the December.

to their risk profile and a strategy for maintaining their


capital at an adequate level. SRP covers additional risks
like Residual Risk, Concentration Risk, Liquidity Risk,
Reputation Risk, Strategic Risk, Settlement Risk etc. PBL
assessed its additional capital requirement under Pillar
2 and submitted the statements on Internal Capital
Adequacy Assessment Process (ICAAP) to Bangladesh
Bank. PBL has been conducting stress testing on its
financials on quarterly basis and reporting the outcomes
to Bangladesh Bank, as a part of Pillar 2 risk management.

Pillar 3: Market Discipline


PBL always delivers the appropriate disclosures not only
to meet the regulatory requirements but also as per
international best practices. Disclosures on the position of
PBLs risk profile, capital adequacy, and risk management
system has been included in this Annual Report also. As
per the Bank Companies Act 1991 (Amended up to 2013),
and as guided by the Bangladesh Bank BRPD Circular
no. 11 dated October 27, 2013 the Risk Management
Committee (RMC) of the Board has been formed to look
after the risk management issues of the Bank.

Revised Regulatory Capital Framework for


banks in line with Basel III
Bangladesh Bank vide BRPD Circular No 18 dated
December 21, 2014 issued Guidelines on Risk Based
Capital Adequacy (Revised Regulatory Capital
Framework for banks in line with Basel III) with effect
from January 01, 2015. The new guidelines aimed to
strengthen the quality and quantity of the regulatory
capital base and enhance the risk coverage of the
capital framework. PBL is well poised for implementing
Basel III phase by phase during the period 2015-2019.
It is mentionable that, PBL is maintaining much higher
Common Equity Tier-1 (CET-1) capital ratio than the
prescribed minimum ratio of 4.5% by Bangladesh
Bank. Last of all but not the least, PBL always had the
reputation of being one step ahead and committed to
continue the same in the coming days.

Pillar 2 Risk Management


The key principle of the Supervisory Review Process
(SRP), the second Pillar of Basel-II is that Banks have a
process for assessing overall capital adequacy in relation

139

Annual Report 2014

Risk Management
Report
Management Division (CRM), Credit Administration
Division (CAD), Recovery Division, Legal Division,
Internal Control and Compliance Division (ICCD),
Internal Audit and Inspection Division and Risk
Management Division (RMD). For managing money
laundering risk, Branch Anti Money Laundering
Compliance Officer (BAMLCO) for every Branch
under dedicated Chief Anti Money Laundering
Compliance Officer (CAMLCO) has been placed;
PBL also formed various risk management
committees like Head Office Credit Review
Committee (HOCRC), Asset Liability Committee
(ALCO), Management Committee (MANCOM),
Central Compliance Committee, Management
Reporting System Committee (MRS) and Risk
Management Unit (RMU) for managing and
monitoring of risk throughout the organization

Risk is the probability that an investments actual


return will be different than expected which includes
the possibility of losing partial or full of the original
investment. As such the enterprises through coordinated
steps manage the risk to keep the loss at a tolerable
limit. The steps also include control and monitoring.
The objective of risk management is to identify and
analyze risks and manage their consequences. Basel II
Accord, the standards of Risk Management as guided
by the Bank for International Settlements (BIS) and
particularly Basel Committee on Banking Supervision
(BCBS), has been applied by bank regulators across
the world. Bangladesh Bank also issued guidelines
which forms the basis of risk management of the
banks in Bangladesh. The guidelines require that the
banks adopt enhanced policies and procedures of risk
management. PBLs risk management strategy is based
on a clear understanding of various risks, disciplined risk
assessment, measurement procedures and continuous
monitoring. PBL continues to focus on improving its risk
management systems not only to ensure compliance
with regulatory requirements but also to ensure better
risk-adjusted return and optimal capital utilization
keeping in mind of the business objectives. For sound
risk management, PBL manages risk in strategic layer,
managerial layer, and operational layer.
The risk management process of the bank operates
under following structure:
The Board approves overall risk management
policies of the Bank in line with the regulatory
guidelines;
Executive Committee (EC) of the Board is
responsible for all sort of decision making as set by
the Board. All decision taken by EC is ratified by the
Board afterward;
Audit Committee (AC) of the Board reviews the
internal audit reports of the bank and operational
risk and assesses whether internal control of the
Bank is proper or not;
Risk Management Committee (RMC) of the Board
oversees the overall Risk Management of the Bank.
The committee also reviews risk management
policies & guidelines, loan approval limit and submit
to the Board for necessary revision each year;
For managing risk, PBL established Credit Risk

140

Risk Management Committee of the Board:


To oversee the risk management of the Bank, the Board
has formed a Risk Management Committee as per
the guidelines of Bangladesh Bank. The Committee
supervises various risks arise from credit, foreign
exchange, internal control and compliance, money
laundering, information technology, operation, interest
rate, liquidity etc. Presently five (05) members of
the Board of Directors are representing in the Risk
Management Committee. During 2014 Four (04) RMC
meeting were held and twenty three (23) memos were
placed before the RMC. The agendas discussed in the
RMC meeting are as below:

Sl Name of the Memo

Number
of
Memos

Risk Management Paper of the Bank

04

Stress Testing Report of the Bank

04

Standard of Risk Governance

01

Status of Borrower Rating of the Bank

02

5
6
7

Revised Green Banking Policy of the


Bank
Regulatory & Internal Circulars related
to ABP/IDBP payment
Submission of statements on ICAAP
under SRP for the year 2013 for SRPSREP dialogue

01
01
01

8
9
10
11
12
13
14

Summary of SREP Inspection on


Statements of ICAAP for the year 2013
Risk Management Framework of the
Bank
Risk Based Pricing for corporate
borrowers
Comprehensive Risk Management
Rating by Bangladesh Bank
E-learning System for Information
Security Risk related awareness
Compliance with Payment Card
Industry Data Security Standard
(PCIDSS)
Information Security Departmental
Activities

15 Various Legal Risk related issues

01
01
01
01
01
01
01
02

Risk Management Process


Risk management is to balance the trade-off between
risk and return and ensure optimum risk-adjusted
return on capital. The risk management function of
PBL strives to proactively anticipate vulnerabilities at
the transaction as well as at the portfolio level, through
quantitative or qualitative examination of the embedded
risks. Risk is managed through a framework of policies
and principles approved by the Board of Directors
which ensures that the Bank operates within its risk
appetite. The policies and procedures established for
this purpose are continuously benchmarked with
international best practices. Further, the Internal Capital
Adequacy Assessment Process (ICAAP) of the Bank
assesses all the significant risks other than the risks
under Pillar-1 of Basel II and calculates the additional
capital requirement.

Identification

Monitoring

Planning &
Controlling

Measurement

reputation risk etc are covered under Internal Capital


Adequacy Assessment Process (ICAAP).
Measurement:The consistent assessment of the above
mentioned types of risks is an essential prerequisite
for successful risk management. For example, in order
to assess credit risk associated with any corporate
financing proposal, PBL carries out various risk
assessment like financial spreadsheet analysis, credit
risk grading and other risk like concentration related to
the borrower and the relevant industry.
Aggregation: PBL closely monitors aggregate risk in
order to minimize its exposure to adverse financial
developments- such as a credit crunch or even
insolvency- arising from a counterparty or client. While
aggregating risks, it is important to take into account
correlation effects which cause a Banks overall risk
differing from the sum of the individual risks. This
applies to risks both within a risk category as well as
across different risk categories.
Planning & Controlling: PBL takes into consideration
the business strategy while planning and setting control
for mitigating risk. As risk management is the trade-off
between risk and return PBL always tries to manage
the risk without hampering the business growth
and stakeholders return. Internal Capital Adequacy
Assessment Process (ICAAP) is one of the biggest part
of planning and controlling of risk.
Monitoring: Risk monitoring is the most challenging task
in the whole risk management cycle as monitoring helps
the Bank to identify earlier any probable risk that may
take in place in many cases. Risk monitoring also helps
to track whether the risks actually incurred lie within the
prescribed limits, thus ensuring an institutions capacity
to bear those risks.
The above process of risk management is being
undertaken by PBL which implies that if any risk(s)
remains un-attended, that will be addressed though the
repetition of the process which started with identification
of those factors and the process continues.

Credit Risk Management

Aggregation

Identification: A Banks risks have to be identified


before they can be measured and managed. Typically
PBL distinguishes Credit risk, Market risk, Liquidity risk,
Operational risk, Islamic banking risk and Information
and Communication Technology (ICT) risk. Besides
these, concentration risk, strategic risk, residual risk,

Management of Credit Risk in PBL


While financial institutions have faced difficulties over
the years for a multitude of reasons, the major cause of
serious banking problems continues to be directly related
to lax credit standards for borrowers and counterparties,
poor portfolio risk management, or a lack of attention
to changes in economic or other circumstances that
can lead to a deterioration in the credit standing of a

141

Annual Report 2014


Banks counterparties. Credit risk is most simply defined
as the potential that a Banks borrower or counterparty
will fail to meet its obligations in accordance with
agreed terms. The goal of credit risk management is
to maximize a Banks risk adjusted rate of return by
maintaining credit risk exposure within acceptable
parameters. The effective management of credit risk is a
critical component of a comprehensive approach to risk
management and essential to the long-term success of
any banking organization. That is why a risk based asset
review framework has also been put in place wherein
the frequency of asset review would be higher for high
exposure cases and/or poor credit rating.
The sound practices set out in this document specifically
address the following areas:

Establishing an appropriate credit risk environment;

Operating under a sound credit granting process;

Maintaining an appropriate credit administration


measurement and monitoring process;

Ensuring adequate controls over credit risk

The following sets of principles are used for the


sustainable risk management culture:
Balancing Risk and Return: Risk is taken considering
the interest of Banks stakeholders, in line with Banks
strategy and within its risk appetite.
Responsibility: All employees ensure that risk-taking is
disciplined and focused.
Accountability: Risk is taken only by delegated
authorities and where there is appropriate infrastructure
and resources. PBL maintains a clear and transparent
process for all risk-taking decisions.
Anticipation: PBL seeks to anticipate future risks and
ensures awareness of all known risks.
Competitive advantage: The bank seeks to achieve
competitive advantage through efficient and
effective risk management and control. The credit risk
management policy of PBL operates under the following
broad principles:

A. Establishing an appropriate Credit Risk environment


The Board of Directors is responsible for approving and
reviewing the credit risk strategies and policies of the
bank periodically. The strategy reflects Banks tolerance
for risk and the level of profitability the bank expects to
achieve for incurring various credit loss.

142

Senior management is responsible for implementing


the credit risk strategy approved by the Board and
for developing standard policies and procedures for
identifying, measuring, monitoring and controlling
any type of risk associated with the strategy. Such
policies and procedures address credit risk of the
Banks activities and at both the individual credit and
portfolio level.
PBL ensures that the risks inherent in products and
activities which are apparently new to the bank are
subject to adequate procedures and controls before
being introduced or undertaken, and approved in
advance by the Board of Directors or its appropriate
committee. In order to streamline risk control features in
a more effective manner, PBL has put in place Standard
Operating Procedure (SOP) in line with internationally
accepted best practices.

B. Operating under a sound credit granting


process
PBL follows sound, well defined credit-granting criteria.
These criteria include a thorough assessment of the
borrower or the counterparty, as well as the purpose
and structure of the credit, and its source of repayment.

Credit facilities are allowed in a manner so that


asset growth can be maintained ensuring optimum
asset quality and without compromising the Banks
standard of excellence;

PBL carefully avoids name lending. Credit facility is


being allowed absolutely on business consideration
with absolute due diligence;

Risks inherent in a credit proposal are being


identified and appropriate mitigating steps are
taken accordingly;

Collateral offered against a credit facility is properly


valued and verified by the concerned Relationship
Officer or Relationship Manager periodically. In
addition, the same collateral is valued and verified
by an enlisted surveyor of the bank which is now
applicable for all customers irrespective of any
amount;

Risk grading of the accounts is being done as


per the Bangladesh Banks guidelines. Any credit
approval/ sanction are subject to the banking
regulations in force or imposed by the regulatory
body from time to time and subject to changes
of the Banks policy. Data collection check list and
limit utilization format are prepared for regular
assessment. Internal Audit & Inspection Division
independently reviews the risk assessment at the
time of conducting internal audit.

The bank has established overall credit limit at every


level for groups of legally connected borrowers
including individual borrowers and counterparties that
aggregate in comparable and meaningful manner for
different types of exposures, both in the banking and
trading book and on and off balance sheet.
PBL always complies with the prevailing banking
regulations regarding Single Borrower Exposure Limit
set by the Bangladesh Bank from time to time. Credit
facility to a single customer (Individual, Enterprise,
Company, Corporate, Organization, and Group) shall
be treated as Large Loan if total limit amount exceeds
10 percent of the total capital of the Bank. As per BRPD
Master Circular no. 05 dated April 09, 2005 on Single
Borrower Exposure Limit, PBL has always maintained the
percentage ceiling of Large Loan Portfolio exposure.
The bank has a clearly-established process in place
for approving new credits as well as the extension of
existing credits. A thorough credit risk assessment is
done before granting loans. The Credit Risk Assessment
includes borrower risk analysis, industry risk analysis,
historical financial analysis, projected financial
performance, the conduct of the account, and security
against the proposed loan.
The assessment originates from relationship manager/
account officer and is reviewed by Head Office Credit
Review Committee. The Credit analyst or executive
duly delegated by proper authority approves the credit
proposals. Executive Committee of the Board approves
the proposals beyond the delegated authority limit of
the Management. The Board of Directors reviews the
proposals approved by the Executive Committee.
All credit extensions are made on an arms length basis. In
particular, credits to related companies and individuals
monitored with particular care and other appropriate
steps taken to control or mitigate the risks of connected
lending. Credit granting process at PBL operates within
the defined risk limit so that the bank can achieve
growth target and superior return on capital.

Sales

Acquisition/
Credit-specific
Customer

Collect and
Review data

C. Maintaining an appropriate credit administration,


measurement and monitoring process
A system has been put in place by the bank for ongoing
administration of various credit risk-bearing portfolios.
Dedicated independent risk management units are
developed for these purposes. Dedicated committees
at management level have been set up to monitor
risk. PBL segregated the total credit process into
Relationship Management/Marketing, Credit Approval/
Risk Management, Credit Administration to improve the
knowledge levels and expertise in each department and
to impose controls over the disbursement of authorized
loan facilities and obtain an objective and independent
judgment of credit proposals. Credit Administration
Division completes security documentation after
getting approval from Credit Risk Management Division
and ensures adherence to approved terms and other
requirements before limit creation and disbursement.
To minimize credit losses, monitoring procedures and
systems is in place that provides an early indication of
the deteriorating financial health of a borrower.
An Early Alert Account is one that has risks or potential
weaknesses of a material nature requiring monitoring,
supervision, or close attention of the management. If
such weaknesses are left uncorrected, they may result
in deterioration of the repayment prospects for the asset
or in the Banks credit position at some future date with
a likelihood of being downgraded. Early identification,
prompt reporting and proactive management of
Early Alert Accounts are prime responsibilities of all
Relationship Managers / Officers and the whole process
is a continuous one. An Early Alert Report is completed
by the Relationship Manager and sent to the approving
authority in Credit Risk Management Division for any
account that is showing signs of deterioration. The
Risk Grade is then changed and referred to Credit Risk
Management Division for assistance in recovery.
The bank has also put a system in place for monitoring
the condition of individual credits including determining
the adequacy of provisions and reserves. For NPL
Provisioning and Write-off, the guidelines established

Risk Analysis

Credit Review

Collateral and
Risk assessment

Approval

Processing

Documentation

Implementation

Credit approval process in PBL sub-divided into a large number of individual process steps

143

Annual Report 2014


by the Bangladesh Bank for Credit Information Bureau
(CIB) reporting, provisioning and write-off of bad and
doubtful debts and suspension of interest are followed
in all cases. Provision is maintained for any shortfall in the
Forced Sale Value (FSV) to cover total loan outstanding
once an account is classified.
PBL has information systems and analytical techniques
that enable the management to measure the credit risk
inherent in all on- and off-balance sheet activities. PBL
has taken initiative to make management information
system more robust and sophisticated for monitoring
the asset quality of the Bank. All credit approvals are
given complying with the requirements of Banks
Memorandum and Articles of Association, the Bank
Company Act, 2013 as amended from time to time,
the Bangladesh Banks instruction circulars, guidelines
and other applicable laws, rules and regulations, Banks
Credit Risk Management Policy, Credit Operational
Manual and all relevant circulars in force. Any
deviations from the internal policy of the bank are
well documented. The portfolio is well diversified with
respect to sector and industry. Concentration of credit
is carefully avoided to minimize risk.
PBL takes into consideration of potential future changes
in economic conditions while assessing individual
credits and credit portfolios. An important element
of sound credit risk management involves discussing
what could potentially go wrong with individual credits
and within the various credit portfolios, and factoring
this information into the analysis of the adequacy of
capital and provisions.

D. Ensuring adequate controls over credit risk


PBL has established a system of independent, ongoing
credit review and the results of such reviews are
communicated directly to the Board of Directors and
senior management. PBL ensures that the creditgranting function is being properly managed and that
credit exposures are within levels, consistent with
prudential standards and internal limits. The bank
has established and enforced internal controls and
other practices to ensure that exceptions to policies,
procedures and limits are reported in a timely manner
to the appropriate level of management.
Prime Bank Limited has taken initiative to introduce
Risk Based Pricing Model and the model has already
been developed and placed before Risk Management
Committee of the Board. After getting approval from
the Board of Directors, the Risk Based Pricing Model
will be in place for pricing corporate loans. Benefits of

144

Risk Based Pricing are:


Enhance shareholders value by ensuring that
credit risk associated with the transaction is
appropriately measured and priced
Enable the Bank to know well ahead of time, what
kind of price will satisfy its risk/return preferences
Enhance the achievement of credit portfolio goals
and objectives.
PBL also has a system in place for managing problem
credits and various other workout situations. All
NPLs are assigned to Account Manager(s) within the
Recovery Division, who is responsible for coordinating
and administering the action plan / recovery of the
account and serve as the primary customer contact
after the account is downgraded to substandard.

Environmental Risk Management


Environmental risk may be defined as an actual or
potential threat of adverse effects on living organisms
and environment by effluents, emissions, wastes,
resource depletion, etc., arising out of an organizations
activities. These affects increase risks as they bring
an element of uncertainty or possibility of loss in the
context of a financing transaction.
Environmental Risk Management is the process
of identification, analysis, assessment, control,
and avoidance, minimization, or elimination of
unacceptable environmental risks. An organization
may use risk assumption, risk avoidance, risk retention,
risk transfer, or any other strategy (or combination of
strategies) in proper management of future events
having impact on the environment.
Environmental risk is one of the several risks that the
Bank must take into account while assessing financing
opportunities as it affects credit risk to a great extent.
As environmental risk is a facilitating element of
credit risk, the Bank has integrated Environmental
Risk Management with Credit Risk Management in all
aspects.
As instructed by the Bangladesh Bank, PBL has
incorporated Environmental Risk Management
guidelines into Credit Risk Management Policy. PBL use
Environmental Risk Rating (EnvRR) for both financing
for new, green field projects as well as those pertaining
to existing facilities.

If the EnvRR is high, then the proposal for financing


will have to be approved by the Board or its
Executive Committee.
If the EnvRR is low or moderate, then the financing

Liquidity risk is the failure to meet obligations leading


to an inability to support normal business activity and
to meet liquidity regulatory requirements. Liquidity risk
can arise due to market liquidity or funding liquidity.
Market liquidity risk is the risk of the inability to sell
assets due to lack of liquidity in the market. Funding
liquidity risk is the risk of the inability to meet liabilities
when they fall due or can only be met at abnormal high
price.
To manage liquidity risk, PBL maintains diversified and
stable funding base comprising of core retail, corporate
and institutional deposits. The principle responsibility
of the liquidity risk management of the bank rests
with Treasury Division which maintains liquidity based
on historical requirements, current liquidity position,
anticipated future funding requirement, sources of
fund, options for reducing funding needs, present and
anticipated asset quality, present and future earning
capacity, present and planned capital position. ALCO
manages the liquidity risk by:

Setting limit on loan to deposit ratio and

Setting limits on dependence on institutional


deposits which are volatile in nature.

From the liquidity statement it can be seen that out of


total deposit liabilities of Tk 204,837 million, contractual
maturity of liability within 1 year is Tk 117,731 million.
In the liquidity statement it is apparent that there is
minimal negative gap till 1-3 months bucket, huge
positive gap in over 3 months to 12 months bucket,
and moderate positive gap in 1year to 5 year and over
5 years maturity bucket which conforms that pressure
from liquidity is minimal. In reality, above 90 percent of
fixed term deposits are renewed on maturity. As such,
the negative gap actually converts into positive gap.

7.69%

7.85%

8.17%

3rd Quarter

4th Quarter

Deposit Mix (Figures in Crore)


Current Deposit,
1,130.86
Sundry Deposit,
1,242.42
Short Notice Deposit
(SND), 1,401.33

it
pos
d De
Fixe 81.52
8,7

it,
pos
g De
Savin ,510.58
2

Market Risk Management


Market risk is defined as the risk of losses in on and
off-balance sheet positions arising from adverse
movements in market prices which may impact the
Banks earnings and capital. The purpose of market risk
management framework is to minimize the risk of loss
and maximize profit in trading portfolio. The risk may
pertain to interest rate related instruments (interest rate
risk), equities (equity price risk) and foreign exchange
rate risk (currency risk). Besides, the Bank is also exposed
to liquidity or funding risk.

Setting tolerance limit for cumulative cash flow


mismatches,

2nd Quarter

0.01
Others,79

Liquidity Risk Management

1st Quarter

Othe
rD
Sche eposits
u
me ,
4,64 nder
0.55

Wherever the EnvRR is High, the credit risk


management function will ensure that additional
conditions / covenants are included.

Cost of Deposit
8.41%

decision can be undertaken on the basis of the


usual credit risk management guidelines.
If the EnvRR is unclear, then it is required for
the Bank to collect more information from the
borrower so as to gain an understanding of the
inherent risks and arrive at a high/moderate/low
decision. If a risk factor is not applicable, it may be
excluded from the total number of questions used
in calculating.

Market
Risk

Interest Rate
Risk

Equity Risk

Foreign
Exchange
Risk

Commodity
Risk

Market Risk management is guided by well laid policies,


guidelines, processes and systems for the identification,
measurement, monitoring and reporting of exposures
against various risk limits. The Asset Liability Management
Committee (ALCO) meets periodically and reviews the
positions of trading groups, interest rate sensitivity, sets
deposit and benchmark lending rates and determines
the asset liability management strategy, as deemed fit, in
light of the current and expected business environment.

145

Annual Report 2014


Treasury Front office has developed MAT policy to
manage stressed liquidity. Treasury mid office has
been formed which is responsible to monitor measure
and analyze the risks inherent in treasury operations of
the Bank. Treasury back office before formation of Mid
office used to monitor risk limits including position limits
and stop loss limits for the trading book and reviews
periodically. For managing and monitoring foreign
exchange risk PBL has started calculation of Value at
Risk (VaR). Interest rate risk is monitored through the use
of re-pricing gap analysis and duration analysis. Interest
rate risk is further monitored through the ALCO.
PBL uses various tools for measuring of liquidity risk
like structural liquidity profile, stress testing etc. PBL
maintains diversified sources to facilitate the bank to
meet funding requirements.

Interest Rate Risk


Interest rate risk is the risk of losing profit by an interestbearing asset, such as a loan or a treasury bond etc due
to variability of interest rates. In general, as rates rise, the
price of a fixed rate bond will fall, and vice versa.
PBL monitors interest rate risk through duration gap analysis,
sensitivity analysis, and Daily Earning At Risk (DEAR) analysis.
The short term impact of changes in interest rates is on the
banks Net Interest Income (NII). In a longer term, changes in
interest rates impact the cash flows on the assets, liabilities
and off-balance sheet items, which raise the risk of losing
the net worth arising out of all re-pricing mismatches and
other interest rate sensitive position.

Moreover interest rate risk is also monitored through


DEAR or Daily Earnings at Risk. DEAR is defined as the
estimated potential loss of a portfolios value over a
one-day period as a result of adverse moves in market
conditions, such as changes in interest rates, foreign
exchange rates or market volatility.

Foreign Exchange Risk Management


It is the risk that the bank may suffer losses as a result
of adverse exchange rate movements during a period
in which it has an open position in an individual foreign
currency. In addition, the bank is also exposed to interest
rate risk and settlement risk on account of its foreign
exchange business.
Foreign exchange risks are measured and monitored
by Mid office under CRM Division. To evaluate the
extent of foreign exchange risk, a Liquidity Gap Report
is prepared for each currency. Gap or mismatch of
maturities can arise due to a customer transaction
resulting in a long or a short position for the bank.
The Net Open position Limit (NOP) of the Bank is
USD 51.20 million which is equivalent to BDT 3,991.01
million on overnight basis as fixed by Bangladesh Bank.
The actual Net Open Position (NOP) of the Bank as
on December 31, 2014 was Tk. 471.10 million which is
equivalent to USD 6.04 million. The overall exposure
does not exceed the stipulated limit.
Value at Risk (VaR) (at 99% confidence level)
Amount in USD
7,341.98

Duration Gap

4,817.55

4,078.79

1.18

March, 2014

1.10

1.09

June, 2014

September, 2014

4,358.82

December, 2014

Value at Risk (VaR) (at 99% confidence level) amount in USD

1.08

March, 2014

June, 2014

September, 2014

December, 2014

Duration Gap

Maturity grouping of rate sensitive assets and liabilities of


the Bank (see table on Interest Rate Risk Analysis) shows
moderate negative gap in the first three quarters and
positive gap in the last quarter. If interest rate increases
by 1 percent, the Bank will enjoy a positive earning of Tk.
2.7 million during 1 year period and vice versa. The impact
is very insignificant compared to total revenue of the
Bank and also within the acceptable limit as stipulated
by the Bangladesh Bank. The statement also shows that
there will be 0.58% impact on quarterly net profit which is
also within the stipulated limit of 10 percent.

146

Furthermore Foreign Exchange Risk is also measured


and monitored through Value at Risk (VaR) under
variance covariance method. The Value-at-Risk is
the maximum loss that the Bank is likely to face within
a given time period with (usually) a 95% (high) & 99%
(really high) probability.

Equity Risk Management


Equity risk is defined as losses due to changes in
market price of equity held by the bank. To measure
and identify the risk, mark to market valuations of the
share investment portfolios are done. Mark to market
valuation is done against a predetermined limit.

Manuals and Standard Operating Procedures are


in place and implementation of those are regularly
monitored;

As per KPMGs guideline and based on feedback


of respective branches and divisions a policy on
Access Control Management of the Banks Core
Banking Software T24 has been developed &
approved by the top management of the Bank;

Regular review of system and network by


Management
Committee
(MANCOM)
and
Management Reporting System Committee (MRSC)

Equity Risk of the Bank is also monitored through


analyze of own investment on shares by subsidiaries,
margin loan against investment in share by subsidiaries
and loan statement against shares.

Internal Audit & Inspection and Internal Control


and Compliance Division of the bank undertake
periodical, comprehensive and special audit of
branches and departments at Head Office for
review of the operation and compliance of statutory
requirement respectively. The Audit Committee of
the Board subsequently reviews the reports of the
Internal Control and Compliance Division.

Self-Assessment of Anti-Fraud Internal Control are


being carried out with due diligence under the
purview of best practices in the banking industry.

Operational Risk Management

Risk Based Internal Audit (RBIA) is being carried out


by Internal Audit & Inspection Division.

Operational risk is defined as the risk of loss resulting


from inadequate or failed internal processes, people and
systems, or from external events. Operational risks vary
in their components. Some are very high occurrence
with low value risk and some are low occurrence with
high value risks. Third consultative paper of Basel-II
recommended following event based classification of
operational risks:
Internal fraud;

Independent Anti Money Laundering (AML)


Inspection is being conducted at branch level by
Internal Audit & Inspection Division.

Segregation of duties and multi-tier approval


procedure are in place.

IT Audit is being carried out on regular basis

Establishing a Data Center for backup of data and


information

Regular testing of systems back-up procedure and


contingency plan

Capital Market Exposure


Share
34

Total capital
Market Exposure
856.97

n
ow
to ge
an ra
L o o ke
Br 80
3

E
in q u
37 Me ity I
1.2 rc nv
5 ha est
nt m
Ba en
nk t
s

Loan
to other
Brokerage
70.72

Loan to
Stock
Dealer
1

External fraud;

Employment practices and workplace safety;

Client, products and business practices;

Damage to physical assets;

Business disruption and system failure;

Execution, delivery and process management.

In PBL, operational risks are identified and measured in


the following manner:
Risks are identified with reference to the relevant
policy manuals, processes, procedures and
practices;

Accounts are evaluated as per Departmental


Control Function Check List (DCFCL);

Incident reporting and analysis of causes and


actions taken on losses from both internal &
external fraud and control lapses;

Review of safety and control measures of premises

Risk control and measurement in PBL are as under:

Prevention of Money Laundering


Money Laundering means properties acquired or earned
directly or indirectly through illegal means or illegal
transfer or use of legally earned money, conversion
and concealment of ownership and source of fund.
Bangladesh Bank through BRPD Circular No. 17 dated
October 07, 2003 advised the scheduled commercial
banks operating in the country to put in place effective risk
management system which includes Money Laundering
Risk Management among others.
PBL has updated Anti Money Laundering Guidelines in
2012, which includes Senior Management commitment
to the anti-money laundering program. The Management
has developed such a culture for the Bank so that all the
employees strictly adhere to each and every provision
of Money Laundering Prevention Act 2012 and Anti-

147

Annual Report 2014


Terrorism Act-2009 with amendment of 2012. Later
Circular was issued for compliance of the Anti-Terrorist
(Amended) Act-2013. All employees of the Bank,
irrespective of the position they hold, are accountable
to the Top Management and regulatory bodies for their
activities which might directly or indirectly relate to
money laundering. Details of Anti Money Laundering
activities are included in the Corporate Governance
chapter of this Annual Report.
For mitigating the risks, the management of the Bank has
formed Anti Money Laundering Department. The Bank
has also nominated CAMLCO, Deputy CAMLCO centrally
and BAMLCO at branches for monitoring compliance
issues related to Anti Money Laundering. The regulatory
requirements are being complied with the guidelines.
The CAMLCO of the Bank has been participating in the
CAMLCO Conference organized by Bangladesh Bank
every year. The Central Bank has been arranging district
level AML related training for employees of all schedule
Banks operating in the district(s).

Internal Control and Compliance


Internal Audit & Inspection Division conducts internal
audit in all the Branches of our Bank to identify lapses/
irregularities related to account opening, preparation
and update of KYC and other related issues, preparation
of accurate Transaction Profile (TP) and to build up the
knowledge about AML issues/matters.
Internal Control and Compliance is a management
process designed to achieve effectiveness and
efficiency of operations, reliable financial reporting and
compliance with laws and regulations.
Pillar 1 and Pillar 2 of BaselII Accord also focused on
operational risk and supervisory review respectively
attaching considerable importance to internal control
& compliance and on supervision & monitoring. As
prescribed in the Bangladesh Bank core risk guideline
on Internal Control & Compliance, Management
Committee (MANCOM) of PBL reviews the overall
effectiveness of internal control system.
The chapter on Corporate Governance of this Annual
Report contains detail discussion on internal control &
compliance measures of the Bank.

Islamic Banking Risk Management


Islamic banking is becoming a popular mode of banking
because of its Shariah complied principles. In many
countries, there are separate Islamic banking banks and
also banks which are operating under both conventional
and Islamic mode of banking. In addition to the credit
risk, market risk, liquidity risk and operational risk there
are other risks in Islamic banking operation.

148

Shariah Non-Compliance Risk arises from the


failure of the banks to comply with Shariah rules
and regulations. As more and more banks are
operating under both conventional and Islamic
banking, it is becoming increasingly important
to comply with Shariah rules and regulations for
the sustainability of Islamic banking. Based on
historical reviews, the potential areas of Shariah
non-compliance is assessing potential profits that
cannot be recognized as eligible profits under
Shariah Principle.

Fiduciary risk is the risk that arises from Banks


failure to perform in accordance with explicit and
implicit standards applicable to their fiduciary
responsibilities. As a result of losses in investments,
banks may become insolvent and therefore unable
to (i) meet the demands of current account holders
for repayment of their funds and (ii) safeguard the
interests of their PLS (Profit Loss Sharing) deposit
holders. Banks may fail to act with due care when
managing investments resulting in the risk of
possible forgone profits to PLS deposit holders.
In order to reduce Shariah non-compliance risk,
the Muraqibs regularly conducted Shariah audit.
Fiduciary risk is controlled through Banks risk
management process.

Information and Communication Technology


Risk Management
We are living in an era of information and communication
technology and the banks have become more
technology driven these days. Use of computer, internet
has become a common practice in the banking industry.
There are certain risks involved in the use of information
and communication technology. This risk may arise
from malfunction of system, failure of network, lack of
knowledge about the use of technology, virus attack,
hacking etc.
PBL has adopted world class Core Banking Software
TEMENOS T24. PBL has also implemented Disaster
Recovery (DR) site. One DR site located in Uttara and the
other is in Gulshan to make sure that the bank operates
smoothly under unavoidable circumstances. PBL has an IT
audit team also, formed as per the Central Banks guideline.
The team conducts IT Audit in each branch on a periodic
basis and provides suggestions to higher management.
IT Division is also managing IT related training programs
to make sure that employees are aware of IT risk related
issues. The chapter on Corporate Governance in this
Annual Report contains details of IT audit.
With a vision to provide secure and safer banking service,

Information Security Department has been formed. At


the very beginning, Information Security department
is following globally accepted management system
standard ISO 27001 to manage Information Security.

Internal Capital Adequacy Assessment Process


(ICAAP)
The Bank conducts ICAAP process every year as
stipulated by the Bangladesh Bank. ICAAP is aimed at
ensuring that the bank maintains an amount of capital
commensurate to its risk profile and improves upon its
risk management systems and framework. It involves
realistic assessment of the level of risks inherent in
the business operations of the bank and setting aside
adequate capital to cover all such risks like Residual
Risk, Concentration Risk, Liquidity Risk, Reputation Risk,
Strategic Risk, Settlement Risk etc. The assessment is
done considering the operational presence, activities,
and processes etc. Monitoring all the material risks also
forms part of ICAAP. In short, ICAAP is integrated into
the management and decision making process and is
reflected in the processes and business operations of
the Bank.

Risk Management Paper

Risk, Market Risk, Liquidity Risk, Operational Risk as well


as Strategic Risk.
Risk Management Paper is also being submitted to
the Risk Management Committee of the Board and
the decisions are being communicated with relevant
divisions of the bank for necessary action.

Borrowers Rating
As prescribed by Bangladesh Bank (BB), all banks in
Bangladesh assessing credit risk under the Standardized
Approach of the Risk Based Capital Adequacy framework
(Basel II), where External Credit Assessment Institutions
(ECAIs) duly recognized by BB performs borrower rating
against which risk weight mapped with the credit rating
category and risk weighted assets (RWA) is determined
for calculating the capital requirement of banks against
credit risk.
Basel-II, in respect of capital measurement and capital
standards, aligns capital of a bank more closely with the
underlying risk. With a view to smooth implementation
of Basel II Accord, The management of PBL decided to
conduct Credit Rating for Corporate Borrowers through
External Credit Rating Assessment Institutions (ECAIs).

Percentage of Total Rated Corporate Borrowers

4
de
Gra
BB .85%
7

BB
G
19 rad
.90 e 1
%

BB Grade 5 1.31%

As per Bangladesh Bank (BB) requirement, Risk


Management Division (RMD) prepares Risk Management
Paper which is presented in the meeting of Risk
Management Unit (RMU) on monthly basis. At the end
of each quarter, Risk Management Paper along with
the minutes is submitted to Bangladesh Bank by Risk
Management Division. Risk Management Paper is a
comprehensive document related to risk issues which
is being placed in the Risk Management Units monthly
meeting. It also allows identification and mitigation of risk
under necessary guidance of the Senior Management
of the Bank.

3
rade
BB G 0%
7
.
37

BB
33 Gra
.2 de
5% 2

In addition to the prescribed format of Bangladesh


Bank, PBL has incorporated various analyses on Credit

Bangladesh Bank Rating Grade

No. of Rated Borrowers of PBL

Percentage of Total Rated Borrowers

Corporate

SME

Corporate

SME

BB Grade 1

76

19.90%

BB Grade 2

127

33.25%

BB Grade 3

144

37.70%

16.67%

BB Grade 4

30

7.85%

75.00%

1.31%

8.33%

BB Grade 5
5
** The risk weight for unrated exposure is 125 percent.

149

Annual Report 2014


and 12.56 percent in minor, moderate and major levels
of shock respectively when considering individual shock.

13.00

Performing Loan Directly Downgraded to


B/L: Textile

12.50
12.00
11.50

CAR

Capital Management is one of the key strategic issues


these days in the banking business. Borrower rating
not only plays an important role in improving capital
adequacy of the bank through capital relief but also
helps the bank to understand the risk associated with
the borrowers. In this regard, RMD calculates capital
relief on the basis of rated customers quarterly. Through
borrower rating, PBL achieved capital relief of 6971.10
million during 2014 compared to capital relief of 5796.40
million during 2013.

11.00
10.50

As a result of vigorous effort and continuous persuasion,


out of total 576 nos. of eligible corporate borrowers of
PBL having exposures of BDT 100 million and above,
rating of 382 nos. of borrowers (66.32 percent of eligible
corporate borrowers) has been completed till December
31, 2014. Moreover, rating of 12 no. of SME borrowers
has been completed till December 31, 2014. The rating
distribution of the 394 Corporate & SME borrowers of
PBL is as follows:

Stress Testing
A stress test, in financial terminology, is an analysis
or simulation designed to test the ability of a given
financial institution to deal during forecasted economic
crisis. Instead of doing financial projection on a best
estimate basis, a bank or its regulators do stress testing
where it looks at how robust institutions is in certain
crashes, a kind of What-If scenario analysis.

10.00
0
March, 2014

Performing loan directly downgraded to B/LSectoral Concentration 2


It is a measure of the concentration risk where the
bank has the second highest investment. It assumes
that 3 percent, 9 percent and 15 percent of the
performing loan will be directly downgraded to B/L
category in minor, moderate and major levels of shock
respectively. Capital Adequacy Ratio (CAR) of PBL will
be 12.64 percent, 12.65 percent and 12.65 percent in
minor, moderate and major levels of shock respectively
when considering individual shock.

Performing Loan Directly Downgraded


to B/L: RMG

CAR

12.50
12.00
11.50
11.00
10.50

0
March, 2014

Stress testing framework as provided by Bangladesh


Bank assesses the impact on CAR due to minor, moderate
and major level of shock in terms of credit risk, exchange
rate risk, liquidity risk, equity price risk and interest rate
risk. Stress testing for credit risk assesses the impact of
increase in the level of Non-Performing Loans (NPLs) of
the banks.

Performing loan directly downgraded to B/LSectoral Concentration 1


It is a measure of the concentration risk where the bank
has the highest investment. It assumes that 3 percent,
9 percent and 15 percent of the performing loan will be
directly downgraded to B/L category in minor, moderate
and major levels of shock respectively. Capital Adequacy
Ratio (CAR) of PBL will be 12.62 percent, 12.59 percent

150

September, 2014 December, 2014

Minor Moderate Major

13.00

This type of analysis has become increasingly


widespread, and has been taken up by various
governmental bodies as a regulatory requirement on
certain financial institutions to ensure adequate capital
allocation to cover potential losses incurred during
extreme, but plausible, events.

June, 2014

June, 2014
Minor

September, 2014

Moderate

December, 2014

Major

Increase in NPLs due to default of top large loan


borrowers
It represents the scenario of the bank when top large
borrowers default. It is assumed that top 3, 7 and 10
borrowers of the bank will default in minor, moderate
and major levels of shock respectively. Capital Adequacy
Ratio (CAR) of PBL will be 11.00 percent, 9.15 percent
and 8.18 percent in minor, moderate and major levels of
shock respectively when considering individual shock.
PBL is reducing the exposure of large loan borrower and
focusing on diversification of credit portfolio. However,
the bank is continuously monitoring the performance
of large loan borrowers. Besides, a good amount of

security coverage is also maintained against those large


loans.

40 percent in minor, moderate and major levels of shock


respectively. Capital Adequacy Ratio (CAR) of PBL will be
12.42 percent, 12.21 percent and 11.77 percent in minor,

Increase in NPL due to Default of Top Large


Loan Borrowers

moderate and major levels of shock respectively when


considering individual shock.

12.00

CAR

10.00

Interest rate shock

8.00
6.00
4.00
2.00
0
March, 2014

June, 2014

September, 2014

Moderate

Minor

December, 2014

Major

Negative shift in NPLs categories


It represents the shift of a loan from one NPL category

It represents the condition of the bank when interest


rate changes significantly. It is based on the assumption
that interest rate will change by 1 percent, 2 percent
and 3 percent in minor, moderate and major levels of
shock respectively. Capital Adequacy Ratio (CAR) of PBL
will be 11.89 percent, 11.13 percent and 10.38 percent in
minor, moderate and major levels of shock respectively
when considering individual shock.

Interest rate Shock

to the next NPL category. It is based on the assumption


12.00

in the NPLs categories in minor, moderate and major

10.00

levels of shock respectively. Capital Adequacy Ratio


(CAR) of PBL will be 12.21 percent, 10.58 percent and
10.10 percent in minor, moderate and major levels of

CAR

of 5 percent, 10 percent and 15 percent downward shift

8.00
6.00
4.00
2.00

shock respectively when considering individual shock.

0
March, 2014

Negative Shift in NPL Categories


14.00

10.00
CAR

September, 2014 December, 2014

Moderate

Major

Foreign exchange shock

12.00

8.00
6.00
4.00
2.00
0
March, 2014

June, 2014
Minor

September, 2014 December, 2014

Moderate

Major

It represents the condition of the bank when exchange


rate changes significantly. It is based on the assumption
that exchange rate will change by 5 percent, 10 percent
and 15 percent in minor, moderate and major levels of
shock respectively. Capital Adequacy Ratio (CAR) of PBL
will be 12.63 percent, 12.62 percent and 12.61 percent in
minor, moderate and major levels of shock respectively
when considering individual shock.

Decrease in the Forced Sale Value (FSV) of the


collateral

Foreign Exchange Shock


10.00
8.00
CAR

It represents the Banks condition when FSV of collateral

6.00
4.00

decreases sharply. It is based on the assumption that

2.00

FSV of collateral will fall by 10 percent, 20 percent and

0
March, 2014

12.50

June, 2014

September, 2014 December, 2014

Minor Moderate Major

Decrease in the FSV of Collateral

Equity shock

12.00
CAR

June, 2014
Minor

11.50
11.00
10.50
10.00
0
March, 2014

June, 2014

September, 2014 December, 2014

Minor Moderate Major

It represents the Banks condition when market value


of share falls sharply. It is based on the assumption
that share price will change by 10 percent, 20 percent
and 40 percent in minor, moderate and major levels of
shock respectively. Capital Adequacy Ratio (CAR) of PBL
will be 12.38 percent, 12.12 percent and 11.59 percent in

151

Annual Report 2014


minor, moderate and major levels of shock respectively
when considering individual shock.
When all the shocks are considered together, Capital
Adequacy Ratio (CAR) of PBL will be 10.46 percent,
6.55 percent and 2.93 percent in minor, moderate and
major levels of shock respectively. So, the Bank can
absorb minor level of shock only when all the shocks
are considered together. However, for absorbing other
levels of shock which is very unlikely in the industry, the
bank may require additional capital and reserve.

Encouraging focus on SME lending;


Regular loans are being monitored closely in order
to avoid classification;
Persuading unrated Corporate and SME customers
to bring them under the umbrella of ECAIs credit
rating.

Equity Shock
14.00
12.00

For absorbing different shocks under Stress Testing, PBL


took the following measures:
Exposure on large loan customers are being
monitored closely
Emphasize on enhancing collateral coverage
against large loan exposure;

152

CAR

10.00
8.00
6.00
4.00
2.00
0
March, 2014

June, 2014
Minor

September, 2014 December, 2014

Moderate

Major

Interest Rate Risk Analysis for 1 percent change in the market rate of interest
as on 31.12.2014
Particular

1- 90 days

Over 3 month to

Over 6 month to

Over 9 month to

up to 6 month

up to 9 month

up to 1 year

64,865,294,285.08 25,678,818,513.16

23,762,282,078.51

8,103,773,719.10

75,932,500,571.14 17,876,024,082.85

9,307,705,521.96

7,910,197,923.34

Gap

(11,067,206,286.06) 7,802,794,430.32 14,454,576,556.56

193,575,795.76

Cumulative GAP

(11,067,206,286.06) (3,264,411,855.75)

Rate Sensitive Assets


Rate Sensitive Liabilities

11,190,164,700.81 11,383,740,496.57

1.00%

1.00%

1.00%

1.00%

Quarterly earnings impact (Cum.Gap*IRC)

(27,289,001.80)

(8,049,234.71)

27,592,186.93

28,069,497.11

Accumulated earning impact to date

(27,289,001.80)

(35,338,236.51)

(7,746,049.58)

20,323,447.53

-5.97%

-7.73%

-1.69%

4.44%

Adjusted Interest Rate Change (IRC)

Earning Impact / Avg. Quarterly Net Profit

Banks Exposure to Foreign Exchange Risk as on 31.12.2014


Amount in BDT
Short Term Foreign Currency Holdings
Currency

USD
EUR
GBP
JPY
CHF
CAD
AUD
SGD
SAR
SEK
TOTAL

Assets in
FCY

Liabilities in Short Term


FCY
Net Position

1
2
177,119,917
171,952,173
2,820,835
2,746,084
229,417
19,006
11,822,069
16,753
82,714
44,596
399,445
130,000
107,881
29,525
192,673,152 174,847,263

3=1-2
5,167,744
74,751
210,411
11,822,069
16,753
82,714
44,596
269,445
107,881
29,525
17,825,889

Long Term Foreign Currency


Holdings
Overall
Long
Assets Liabilities
Net
Term Net
in FCY
in FCY
Position Position
4
5
6=4-5
7=3+6
40.28
0.71
2.54
0.76
0.13
0.55
0.28
1.59
0.22
0.03
47.11

Overall Net
Position /
Core Capital
8

1.72%

153

Annual Report 2014

Market Discipline
Disclosures on Risk Based Capital (Basel-II)
1. Scope of Application
Qualitative
disclosure

a)

The name of the top corporate


entity in the group to which this Prime Bank Limited
guidelines applies.
Prime Bank Limited has 5 (Five) subsidiaries viz. (i) Prime Bank Investment
limited, (ii) Prime Bank Securities Limited, (iii) Prime Exchange Co. (Pte.)
Limited, Singapore, (iv) PBL Exchange (UK) Limited and (v) PBL Finance
(Hong Kong) Limited.
A brief description of the Bank and its subsidiaries are given below:
Prime Bank Limited:

b)

The Prime Bank Limited (the Bank) was incorporated as a public limited
company in Bangladesh under Companies Act, 1994 with the registered
office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced
its banking business with one branch from April 17, 1995 under the license
issued by Bangladesh Bank. Presently the Bank has 140 (One Hundred
and Forty) branches including 18 (Eighteen) SME Centers/ Branches all
over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and
at Chittagong Port, Chittagong. Out of the above 140 branches, 05 (five)
branches are designated as Islamic Banking branch complying with the
rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking
Units (OBU), 5 (Five) subsidiary Companies (3 Foreign subsidiaries & 2
Local subsidiaries). The Bank went for Initial Public Offering in 1999 and
its shares were listed with Dhaka Stock Exchange Limited and Chittagong
Stock Exchange Limited as a publicly traded company for its general
classes of share.
The principal activities of the Bank are to provide all kinds of commercial
banking services to its customers through its branches.

An outline of differences in
the basis of consolidation for
accounting
and
regulatory
purposes,
with
a
brief
description of the entities within
the group (a) that are fully
consolidated; (b) that are given
a deduction treatment; and (c)
that are neither consolidated
Subsidiaries of PBL:
nor deducted (e.g. where the
investment is risk-weighted).
i) Prime Bank Investment Limited:
Prime Bank Investment Limited (PBIL) is a subsidiary company
of Prime Bank Limited incorporated as a public limited company
on April 27, 2010 with the registrar of Joint Stock Companies,
vide certificate of incorporation no. C-84266/2 dated 28 April
2010 which has commenced its business on the same date.
The main objectives of the company are to carry out the business of fullfledged merchant banking activities like issue management, portfolio
management, underwriting, corporate advisory services etc.
ii) Prime Bank Securities Limited:
Prime Bank Securities Limited was incorporated on April 29, 2010 as
a private limited company under the Companies Act 1994. The main
objectives of the company are to carry on business of stock brokers /
dealers in relation to shares and securities dealings and other services
as mentioned in the Memorandum and Articles of Association of the
Company. The company commenced its operation from May 2011.

154

iv) PBL Exchange (UK) Limited:


PBL Exchange (UK) Limited was incorporated as a private limited company
with Companies House of England and Wales under registration no.
7081093 dated 19 November 2009. The company is a wholly owned
subsidiary of Prime Bank Limited. The company commenced its operation
on 02 August 2010 with three Branches located at Brick Lane of London,
Coventry Road of Birmingham and North Oldham of Manchester. The
registered office is located at 16 Brick Lane, London E1 6RF.
v) PBL Finance (Hong Kong) Limited:
PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime
Bank Limited. PBL Finance (Hong Kong) Limited was incorporated with
Companies Registries of Hong Kong (Certificate of incorporation no.
1584971 and Business Registration no. 58197431 both dated April 7, 2011).
PBL Finance (Hong Kong) Limited obtained Money Lending Licenses #
307/2011 issued by Honorable Court of Hong Kong on 28th July 2011. It has
commenced its operation from August 2011 with one branch located at
608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong.

Quantitative
disclosure

c)

Any restrictions, or other major


impediments, on transfer of
Not applicable
funds or regulatory capital
within the group.

d)

The aggregate amount of capital


deficiencies in all subsidiaries
not included in the consolidation Not applicable
that are deducted and the
name(s) of such subsidiaries.

2. Capital Structure

Qualitative
disclosure

a)

Quantitative
disclosure

b)

As per the guidelines of Bangladesh Bank, Tier-1 Capital of PBL


consists of (i) Fully Paid-up Capital, (ii) Non-repayable Share Premium
Summary information on the Account, (iii) Statutory Reserve, (iv) Retained Earnings and (v) Minority
terms and conditions of the Interest in Subsidiaries.
main features of all capital
instruments, especially in the Tier-2 Capital consists of (i) General Provision against unclassified
case of capital instruments Loans/Investments, Off-balance sheet exposure & Off-shore banking
eligible for inclusion in Tier 1 or Units), 50% of Asset revaluation reserve, 50% of Revaluation gain/
in Tier 2.
loss on investment (HFT), 10% of Revaluation reserve for equity
instruments, PBL unsecured nonconvertible subordinated bond as
approved by Bangladesh Bank and Exchange equalization fund etc.

The amount of Tier-1 capital with separate disclosure of:

Solo

Consolidated

Taka in Crore

I.

Fully Paid up capital

II.

Non repayable share premium account

224.12

224.12

III.

Statutory reserve

818.46

818.46

IV. General reserve


V.

Retained earnings

VI. Minority interest in subsidiaries

1,029.35

1,029.35

2.80

179.13

186.40

0.00

0.00

VII. Non-cumulative irredeemable preference shares

VIII. Dividend equalization account

2,251.06

2,261.14

Sub-Total (A)

155

Annual Report 2014

c)

The total amount of Tier 2 and Tier 3 capital (B)

d)

Other deductions from capital

e)

Total eligible capital (A+B)

480.21

481.23

2,731.28

2,742.37

3. Capital Adequacy:

Qualitative
disclosure

a)

A summary discussion of the


banks approach to assessing
the adequacy of its capital to
support current and future
activities.

The Bank has adopted Standardized Approach (SA) for computation of


capital charge for credit risk and market risk, and Basic Indicator Approach
(BIA) for operational risk. Assessment of capital adequacy is carried out in
conjunction with the capital adequacy reporting to the Bangladesh Bank.
The Bank has maintained capital adequacy ratio on the basis of
Consolidated and Solo are 12.68% & 12.71% respectively as against the
minimum regulatory requirement of 10%. Tier-I capital adequacy ratio for
Consolidated is 10.45% as well as Solo is 10.48% against the minimum
regulatory requirement of 5%. The Banks policy is to manage and maintain
its capital with the objective of maintaining strong capital ratio and high
rating. The Bank maintains capital levels that are sufficient to absorb all
material risks. The Bank also ensures that the capital levels comply with
regulatory requirements and satisfy the external rating agencies and
other stakeholders including depositors. The main objective of the capital
management process in the Bank is to ensure that Bank has adequate
capital to meet up its all sorts of obligations any time.

Particulars

Quantitative
disclosure

b)

Capital requirement for credit risk

c)

Capital requirement for market risk

d)
e)

Solo
Consolidated
Taka in Crore
1,867.35

1,858.03

76.54

90.53

Capital requirement for operational risk

205.03

214.68

Total and Tier 1 capital ratio:


For the consolidated group; and
For stand alone

82.42%

82.45%
-

2,148.92

2,163.24

21,489.18

21,632.42

Total CAR

12.71%

12.68%

Tier-1 CAR

10.48%

10.45%

Tier-2 CAR

2.23%

2.22%

Minimum capital requirement


Total Risk Weighted Assets (RWA)
Total and Tier-1 Capital Ratio:

156

4. Credit Risk:
a)

The general qualitative disclosure requirement with respect to credit risk, including:
With a view to strengthening credit discipline and bring classification and
provisioning regulation in line with international standard, a phase-wise
program for classification and provisioning was undertaken by the Bank
as per Bangladesh Bank circulars issued from time to time. In this regard,
all the loans and advances/investments are grouped into four categories
for the purpose of classification, namely (i) Continuous Loan, (ii) Demand
Loan, (iii) Fixed Term Loan and (iv) Short-term Agricultural and Micro
Credit. They are classified as follow:
Continuous & Demand Loan are classified as:

Sub-standard- if it is past due/overdue for 03(three) months or


beyond but less than 06 (six) months;

Doubtful- if it is past due/overdue for 06 (six) months or beyond but


less than 09 (nine) months;

Bad/Loss- if it is past due/overdue for 09 (nine) months or beyond.

In case of any installment(s) or part of installment(s) of a Fixed Term


Loan amounting up to Taka 1 million is not repaid within the due
date, the amount of unpaid installment(s) are treated as past due or
overdue installment. Such types of Fixed Term Loans are classified
as under:
Qualitative
disclosure

i) Definitions of past due and


impaired loans (for accounting
purpose);

Sub-standard- if the amount of past due installment is equal to or


more than the amount of installment(s) due within 06 (six) months,
the entire loans are classified as Sub-standard.

Doubtful- if the amount of past due installment is equal to or more


than the amount of installment(s) due within 09 (nine) months, the
entire loans are classified as Doubtful.

Bad/Loss- if the amount of past due installment is equal to or more


than the amount of installment(s) due within 12(twelve) months, the
entire loans are classified as Bad/Loss.

In case of any installment(s) or part of installment(s) of a Fixed Term


Loan amounting more than Taka 1 million is not repaid within the due
date, the amount of unpaid installment(s) are treated as past due or
overdue installment. Such types of Fixed Term Loans are classified
as under:

Sub-standard- if the amount of past due installment is equal to or


more than the amount of installment(s) due within 03 (three) months,
the entire loans are classified as Sub-standard.

Doubtful- if the amount of past due installment is equal to or more


than the amount of installment(s) due within 06 (six) months, the
entire loans are classified as Doubtful.

Bad/Loss- if the amount of past due installment is equal to or more


than the amount of installment(s) due within 09 (nine) months, the
entire loans are classified as Bad/Loss.

157

Annual Report 2014

Short-term Agricultural and Micro Credit will be considered irregular if it is


not repaid within the due date as stipulated in the loans agreement and will
be classified as under:

Sub-standard- if the irregular status continues after a period of 12


(twelve) months, the credits are classified as Sub-standard.

Doubtful- if the irregular status continue after a period of 36 (thirty


six) months, the credits are classified as Doubtful.

Bad/Loss- if the irregular status continue after a period of 60 (sixty)


months, the credits are classified as Bad/Loss.

A Continuous loan, Demand loan or a Term Loan which remained overdue


for a period of 02 (two) months or more, is treated as Special Mention
Account (SMA).
The Bank is required to maintain the following general and specific
provision in respect of classified and unclassified loans and advances /
investments on the basis of Bangladesh Bank guidelines issued from time
to time:

Particulars

Rate

General provision on unclassified Small and Medium


0.25%
ii) Description of approaches
Enterprise (SME) financing.
followed for specific and
General provision on unclassified loans and advances/
general provisions and statistical
investments other than Consumer Financing, Loans to
1%
methods;
Brokerage House, Merchant Banks, Stock Dealers etc., SMA
as well as SME Financing).
General provision on interest receivable on loans /
1%
investments.
General provision on off-balance sheet exposures (Provision
has been made on the total exposure and amount of cash
margin & value of eligible collateral were not deducted while
1%
computing off-balance sheet exposure).
General provision on unclassified loans and advances/
investments for housing finance, loans for professionals to 2%
set-up business under consumer financing scheme.
General provision on the unclassified loans to Brokerage
House, Merchant Banks, Stock Dealers, etc.
2%
General provision on unclassified amount for Consumer
5%
Financing.
General provision on outstanding amount of loans kept in Special
Mention Account (SMA) will be at the same respective rate as stated
above (0.25% to 5%) as per BRPD Circular No. 05 dated 29.05.2013.
Specific provision on Sub-Standard loans and advances /
20%
investments.
Specific provision on Doubtful loans and advances /
50%
investments.
Specific provision on bad / loss loans and advances / invests. 100%

Quantitative
disclosure

b)

Total gross credit risk exposures broken down by major types of credit
exposure of the Bank:
Particulars
Taka in Crore
Total gross credit risk exposures Secured Overdraft/Quard Against TDR
3,673.74
broken down by major types of Cash Credit/Mudaraba
1,821.15
credit exposure.
Loan (General)
3,565.07
House Building Loan
Loan Against Trust Receipts (LTR)

158

360.35
741.59

Payment Against Documents (PAD)


Retail Loan
Lease Finance/Izara
Credit Card
SME Loan
Hire Purchase
Other Loans & Advances
Bill purchased/discounted-Inland
Bill purchased/discounted-Foreign
Total

12.42
1,255.28
488.17
113.17
75.91
616.60
1,554.55
305.88
152.78
14,736.67

Geographical distribution of exposures, broken down in significant areas


by major types of credit exposure of the Bank:
Particulars
Taka in Crore
Urban:
Dhaka Zone
10,809.50
Chittagong Zone
2,326.81
Khulna Zone
588.01
Rajshahi Zone
414.12
Barishal Zone
11.16

c)

Geographical distribution of
Sylhet Zone
exposures, broken down in
Rangpur Zone
significant areas by major types
Sub-Total
of credit exposure.
Rural:
Dhaka Zone

Chittagong Zone
Khulna Zone

155.15
83.67
14,388.43
172.25
78.54
6.49

Rajshahi Zone

58.77

Sylhet Zone

32.20

Sub-Total
Grand Total (Urban + Rural)

348.24
14,736.67

Industry or counterparty type distribution of exposures, broken down by


major types of credit exposure of the Bank:
Particulars
Commercial Lending

3,161.88

Export Financing

752.27

House Building Loan

360.35

Retail Loan
Small & Medium Enterprises (SME)

d)

Taka in Crore

1,255.28
2,005.48

Special Program Loan


Staff Loan

133.05
0.90

Other Loans & Advances (SOD)

251.55

Industry or counterparty type Loans, Advances & Lease/Investments to


distribution of exposures, broken Managing Director / CEO and other senior
down by major types of credit executives
Industrial Loans/Investments (Details are given
exposure.
below)
Total

185.47
6,630.43
14,736.67

Industrial Loans/Investments
Particulars
Agriculture
Textile Industries
Food and allied industries
Pharmaceutical Industries
Leather , Chemical, Cosmetics, etc.
Tobacco Industries
Cement and Ceramic Industries
Service Industries
Transport & Communication Industries

Taka in Crore
199.41
607.07
435.63
76.16
70.75
74.89
362.50
1,561.20
513.98

159

Annual Report 2014

Other Industries including bills purchased and


discounted

2,728.84

Total

6,630.43

Residual contractual maturity break down of the whole portfolios, broken


down by major types of credit exposure of the Bank:

e)

Residual contractual maturity


breakdown
of
the
whole
portfolio, broken down by major
types of credit exposure.

Particulars
Repayable on Demand
Up to 1 month
Over 1 month but not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
Total

Taka in Crore
3,092.58
2,480.36
5,291.00
3,600.94
271.79
14,736.67

By major industry or counterparty type:


The amount of classified loans and advances/investments of the Bank are
given below as per Bangladesh Bank guidelines.
i) Amount of impaired loans Particulars
and if available, past due loans, Continuous Loans & Advances
provided separately;
Demand Loans & Advances
Term Loans & Advances
Short Term Agro Credit and Micro Credit

Taka in Crore
180.59
199.95
740.34
0.59

Total
1,121.46
Specific and general provisions were made on the amount of classified
and unclassified loans and advances/investments, off-balance sheet
exposures and off-shore banking units, interest on receivable, diminution
in value of investment and other assets-suspense of the Bank according to
the Bangladesh Bank guidelines.
Particulars
Taka in Crore
ii)
Specific
provisions; and

f)

and

general

Provision on classified loans/investments

Particulars
Provision on classified loans/investments
iii)
Charges
for
specific Provision on unclassified loans/investments
allowances and charge-offs Provision on Off-balance sheet exposures
during the period.
Provision for Off-shore Banking Units
Provision for interest receivable on loans &
advances/investments
Provision for other assets
Provision for diminution in value of
investments
Provision for impairment loss for investment in
subsidiaries
Total

160

416.53

Provision on unclassified loans/investments


166.36
Provision on Off-balance sheet exposures
108.85
Provision for Off-shore Banking Units
49.85
Provision for interest receivable on loans &
0.95
advances/investments
Provision for other assets
9.45
Provision for diminution in value of
6.13
investments.
Total
758.13
During the year the specific and general provisions were made on the
amount of classified and unclassified loans and advances/investments,
off-balance sheet exposure, off-shore banking units, interest on receivable,
diminution in value of investment and other assets-suspense of the Bank
as per Bangladesh Bank guidelines.
Taka in Crore
264.35
11.40
(0.15)
7.60
0.62
(0.70)
4.54
287.66

Gross Non Performing Assets (NPAs).


Non Performing Assets (NPAs) to Outstanding loans and advances.
Particulars
Movement of Non Performing
Assets (NPAs).

Taka in Crore

Opening balance

781.45

Addition/adjustment during the year

340.01

Closing balance

1,121.46
Particulars

g)

Taka in Crore

Opening balance

334.20

Provisions made during the period


Movement of specific provisions Transferred from unclassified loan & advances including
for NPAs.
OBU
Write-off
Write-back of excess provisions

264.35
10.00
(212.29)
20.27

Closing Balance

416.53

5. Equities: Disclosures for Banking Book Positions


The general qualitative disclosure requirement with respect to equity risk, including:

Qualitative
disclosure

a)

Investment in equity securities are broadly


categorized into two parts:
i.
Quoted Securities (Common or Preference
Differentiation between holdings on which capital
Shares & Mutual Fund) that are traded in the
gains are expected and those taken under other
secondary market (Trading Book Assets).
objectives including for relationship and strategic
ii. Unquoted securities include shares of Central
reasons; and
Depository
Bangladesh
Limited
(CDBL),
investment in SWIFT and Market Stabilization
Fund (MSF).
Discussion of important policies covering the
valuation and accounting of equity holdings in
the banking book. This includes the accounting
techniques and valuation methodologies used,
including key assumptions and practices affecting
valuation as well as significant changes in these
practices.

The primary aim is to investment in these equity


securities for the purpose of capital gain by selling
them in future or held for dividend income. Dividends
received from these equity securities are accounted
for as and when received. Both Quoted and UnQuoted equity securities are valued at cost and
necessary provisions are maintained if the prices fall
below the cost price.
Solo

Consolidated
Taka in Crore

At cost

Quantitative
disclosure

b)

Value disclosed in the balance sheet of investments,


as well as the fair value of those investments; for
quoted securities, a comparison to publicly quoted
share values where the share price is materially
different from fair value.

c)

The cumulative realized gains (losses) arising from


sales and liquidations in the reporting period.

d)

Total unrealized gains (losses)

Total latent revaluation gains (losses)

Any amounts of the above included in

29.96

At cost

23.83

149.01

At market
value

93.77

4.75

1.76

Tier-2 capital.
e)

At market
value

(6.13)

(55.24)

Capital requirements broken down by appropriate equity groupings, consistent with the banks methodology,
as well as the aggregate amounts and the type of equity investments subject to any supervisory provisions
regarding regulatory capital requirements (10% on market value).
Specific Market Risk

2.38

9.38

General Market Risk

2.38

9.38

161

Annual Report 2014

6. Interest Rate Risk in the Banking Book (IRRBB)


Interest rate risk is the risk where changes in market interest rates might
adversely affect a bank's financial condition. Changes in interest rates
affect both the current earnings (earnings perspective) as well as the net
worth of the bank (economic value perspective). To evaluate the impact of
interest rate risk on the net interest margin, Prime Bank monitors the size of
the gap between rate sensitive assets and rate sensitive liabilities in terms
of the remaining period to repricing. Repricing refers to the point in time
when adjustments of interest rates on assets and liabilities occur owing to
new contracts, renewal of expiring contracts or that a contract specifies a
floating rate that adjusts at fixed time intervals.

Qualitative
disclosure

(a)

The
general
qualitative
disclosure
requirement
including the nature of
IRRBB and key assumptions,
including
assumptions
regarding loan prepayments
and behavior of non-maturity
deposits, and frequency of
IRRBB measurement.

A maturity mismatch approach is used to measure Prime Banks exposure to


interest rate risk. A positive mismatch means that more assets than liabilities
are repriced in a given period. With a positive mismatch, a rise in market
interest rates will have a positive effect on the bank's earnings. On the other
hand, a negative mismatch, where more liabilities are repriced than assets
in a given period, means a drop in earnings if interest rates had increased.
The table presented below showing the Interest Rate Risk Analysis of Prime
Bank Limited. The analysis shows that Bank may suffer a negative earnings
impact (loss) of Taka 2.73 crore in the first quarter and Taka 0.80 crore in the
second quarter, for a total year-to-date negative earnings impact of Taka
3.53 crore. In the third quarter, the total year-to-date accumulated earnings
impact continues to be negative, even though there is a positive gap of Taka
2.76 crore. Here, it is observed that accumulated earnings for the year 2014
owing to a 1% increase in interest rate is a gain of Taka 2.03 crore.
The rule of thumb suggests that quarterly gaps causing an earnings impact
of 10% of the Banks average quarterly net profit for each 1% change in
interest rates should be carefully handled by the Banks Management. The
last row of the following table reveals that earnings impact on Prime Banks
average quarterly net profit is very insignificant and remains within the
acceptable limit as prescribed by Bangladesh Bank.

162

Interest Rate Risk Analysis


(for 1% change in the market rate of interest)

Particulars

Quantitative
disclosure

The increase (decline)


in
earnings
or
economic value (or
relevant measure used
by management) for
(b) upward and downward
rate shocks according
to
managements
method for measuring
IRRBB, broken down by
currency (as relevant).

1 to 90
days

Over 3
months
to up to 6
months

Over 6
months to
up to 9
months

Over 9
months to
up to 1 year

Taka in Crore
Rate Sensitive Assets

6,486.53

2,567.88

2,376.23

810.37

Rate Sensitive Liabilities

7,593.25

1,787.60

930.77

791.02

GAP

(1,106.72)

780.28

1,445.46

19.35

Cumulative GAP

(1,106.72)

(326.44)

1,119.02

1,138.37

Adjusted Interest Rate


Changes (IRC)

1.00%

1.00%

1.00%

1.00%

Quarterly earnings
impact (Cum. GAP * IRC)

(2.73)

(.80)

2.76

2.81

(2.73)

(3.53)

(0.77)

2.03

-5.97%

-7.73%

-1.69%

4.44%

Accumulated earning
impact to date
Earning impact/Avg.
quarterly net profit

7. Market Risk:

Qualitative
disclosure

a)

Market risk is the possibility of losses of assets in balance sheet and off-balance
sheet positions arising out of volatility in market variables i.e., interest rate, exchange
rate and price. Allocation of capital is required in respect of the exposure to risks
deriving from changes in interest rates and equity prices in the banks trading book,
in respect of exposure to risks deriving from changes in foreign exchange rates and
i) Views of Board of commodity price in the overall banking activity. The total capital requirement for
Directors (BOD) on banks against their market risk shall be the sum of capital charges against:
trading/
investment
activities.

Interest rate risk

Equity position risk

Foreign exchange (including gold) position risk throughout the banks balance
sheet and

Commodity risk.

Measurement Methodology:
As banks in Bangladesh are now in a stage of developing risk management models,
Bangladesh Bank has suggested the banks for using Standardized Approach for
credit risk capital requirement for banking book and Standardized (rule based)
Approach for market risk capital charge in their trading book.
Maturity Method has been prescribed by Bangladesh Bank in determining capital
ii) Methods used to
against market risk. In the maturity method, long or short positions in debt securities
measure Market risk.
and other sources of interest rate exposures, including derivative instruments, are
slotted into a maturity ladder comprising 13 time-bands (or 15 time-bands in case
of low coupon instruments). Fixed-rate instruments are allocated according to the
residual term to maturity and floating-rate instruments according to the residual
term to the next re-pricing date.
In Standardized (rule based) Approach the capital requirement for various market
risks (interest rate risk, price, and foreign exchange risk) are determined separately.

163

Annual Report 2014

The total capital requirement in respect of market risk is the sum of capital
requirement calculated for each of these market risk sub-categories, e.g.:

Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk + Capital
Charge for General Market Risk;

Capital Charge for Equity Position Risk = Capital Charge for Specific Risk +
Capital Charge for General Market Risk;

Capital Charge for Foreign Exchange Risk = Capital Charge for General Market
Risk;

Capital Charge for Commodity Position Risk = Capital charge for general
market risk.

iii)
Market
Risk Treasury Division manages the market risk and ALCO monitors the activities of
Management System. Treasury Division in managing such risk.
To mitigate the several market risks the bank formed Asset Liability Management
Committee (ALCO) who monitors the Treasury Divisions activities to minimize
the market risk. ALCO is primarily responsible for establishing the market risk
management and asset liability management of the Bank, procedures thereof,
implementing core risk management framework issued by the regulator, best risk
management practices followed by globally and ensuring that internal parameters,
procedures, practices/polices and risk management prudential limits have been set
up and followed.
The Treasury Division are taking following measures to minimize the several market
risks:
i) Foreign exchange risk management: it is the risk that the bank may suffer losses
as a result of adverse exchange rate movement during a period in which it has an
open position in an individual foreign currency. This risk is measured and monitored
iv)
Policies
and by the Treasury Division. To evaluate the extent of foreign exchange risk, a liquidity
processes
for Gap report is prepared for each currency.
mitigating market risk.
ii) Equity Risk: Equity risk is defined as losses due to changes in market price of
the equity held. To measure and identify the risk, mark to market valuation of the
investment portfolios of share is being done. Mark to market valuation is done
against a predetermined limit. At the time of investment, following factors are taken
into consideration:
a.

Security of Investment

b.

Fundamentals of securities

c.

Liquidity of securities

d.

Reliability of securities

e.

Capital appreciation

f.

Risk factors and

g.

Implication of taxes etc.

The capital requirements for:

Solo

Consolidated
Taka in Crore

Quantitative
disclosure

b)

Interest rate risk

67.06

67.06

Equity position risk

4.77

18.75

Foreign exchange risk and

4.71

4.71

Commodity risk

Total Capital Requirement

164

76.54

90.53

8. Operational Risk:
Operational risk is defined as the risk of loss resulting from inadequate or failed
internal processes, people and systems or from external events. This definition
includes legal risk but excludes strategic and reputation risk. It is inherent in every
business organization and covers a wide spectrum of issues. The Board of Directors
(BOD) of the Bank and its Management firmly believe that an effective internal
control systems has been established within the Bank to ensure adequacy of the
risk management framework and compliance with a documented set of internal
policies concerning the risk management system which mainly include,
# Top-level reviews of the Bank's progress towards the stated objectives;
# Checking for compliance with management controls;
# Policies, processes and procedures concerning the review, treatment and
resolution of non-compliance issues; and
# A system of documented approvals and authorizations to ensure accountability
to the appropriate level of management.

Qualitative
a)
disclosure

Bank has ensured some other internal practices to be in place as appropriate to


i) Views of BOD on control operational risk. Examples of these include:
system
to
reduce
Operational Risk
# Close monitoring of adherence to assigned risk limits or thresholds;
# Maintaining safeguards for access to, and use of, banks assets and records;
# Ensuring that staffs have appropriate expertise and training;
# Regular verification and reconciliation of transactions and accounts.
The BOD has modified Banks operational risk management process by issuing
a high level standard like SOP, supplemented by more detailed formal guidance.
This explains how the bank manages operational risk by identifying, assessing,
monitoring, controlling and mitigating the risk, rectifying operational risk events,
and implementing any additional procedures required for compliance with local
regulatory requirements.
The Bank maintains and tests contingency facilities to support operations in the
event of disasters. Additional reviews and tests are conducted in the event that
any branch of the bank is affected by a business disruption event, to incorporate
lessons learned in the operational recovery from those circumstances. Plans have
been prepared for the continued operation of the banks business, with reduced
staffing levels.

Human Resources
People: The Prime Assets!
Prime Bank Limited has a favourable image as an employer of choice. The Bank
has positioned itself with a performance-driven rewarding work culture; where
employees are treated with respect and receive widened opportunities to realize
their diverse potentials fully as well as benefit the organization by demonstrating
value creating behaviours. A group of motivated and engaged employees with
ii) Performance gap of diverse talents are one of the strengths of Prime Bank.
executives and staffs.
Prime Bank has a special focus on converting the human resources into the
human capital, i.e., knowledge, competency, attitude and behaviour embedded
in employees.

Manpower Planning and Recruitment


The recruitment and selection of Prime Bank follows the best fit approach. As
per Banks requirement, Human Resources Division ensures that the potential
candidates are properly assessed, selected and placed on-time as per required
competencies (KSA Knowledge, Skill & Attributes) and experience.

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Annual Report 2014

Prime Bank has a recruitment policy that clearly states the criteria and procedures
to recruit fresh and lateral entrants.
The Bank has a Management Trainee Program which is aimed to recruit outstanding
fresh graduates and develop them as the future leaders of Prime Bank Ltd.
In 2014, the Bank selected a total of 176 fresh candidates as Management Trainees
from a pool of 28,567 applicants after multiple written tests and interviews.

Diversity in Workplace
Prime Bank believes that diverse, heterogeneous teams generate greater
creativity, innovation and business development. Prime Bank is aware of the fact
that an inclusive culture maintains and drives workforce diversity by fostering
the exchange of ideas and collaboration among individuals and across groups.
To speak simply, the constant success of PBL depends in part on maintaining a
plurality of perspectives.
No. of employees by age group and gender:
Age group

No. of Emp.

Below 30 yrs

605

30 - 40 yrs

1,668

40 - 50 yrs

466

50 years and above

Percentage
21.10%
58.18%
16.25%

128

4.46%

2,867

100%

Gender

No. of Emp.

Male

431

Female

174

Male

1,305

Female

363

Male

409

Female

57

Male

120

Female

8
Total

2,867

PBL practices equal employment opportunity for competent candidates regardless


of their gender, age, locality or ethnicity. While recruiting fresh graduates, PBL
source the pool from different recognized public and private universities; with a
view to creating a diverse work force.
Besides, the ration of male and female employees has been increasing over the
time. Currently, approximately 21.00% of employees are female.
Gender diversity among employees:
Gender

No. of Members

Male
Female
Total

Percentage

2,265

79.00%

602

21.00%

2,867

100%

Increasing ratio of Female over the years:


Year

Female Ratio

2011

18.59%

2012

19.77%

2013

20.48%

2014
21.00%
The ration of male and female employees has been increasing over the time.
Currently, approximately 602 of the employees are female. PBL is gradually
encouraging the women to take up leadership opportunity which will ensure a
more balanced work force.

166

Learning & Development


Prime Bank continuously thrives to transform Human Resources to Human Capital
through appropriate learning and development initiatives in every aspects of work
area. HR Division regularly undertakes effectively designed training programs
targeting the right group of employees through proper training need assessment.
The Management Trainee Development Program of Prime Bank is designed for
newly recruited Management Trainees (MTs) who receive job rotation across the
country and different functions in a structured process. This effectively designed
program provides ample opportunities to acquire necessary knowledge, skills and
on-the-job-experience. All the MTs who were recruited in 2014 are going through
the development program.
In 2014, Prime Banks internal HR Training and Development Centre arranged
training on 62 different topics for 4,370 enthusiastic participants. Besides, a total of
644 employees were sent to participate in various training programs/conferences in
home and abroad. In total, the number of participants who participated in trainings/
conferences has increased by 48% over the last year.
The whole capacity building efforts is pivoted on the unique understanding of
banking sector as well as required behavioural skills to create a group of competent
professionals with strong leadership skill. The banking sector is complex and diverse
with evolving nature of threats and the risks. So, the training module is updated
time to time for employees of the Bank in the changing context of financial market.

Compensation & Benefits


Prime Bank has a flexible compensation and benefits system that helps to ensure
pay equity, is linked with performance that is understood by employees, and keeps
in touch with employee desires and whats coveted in the market, while maintaining
a balance with the business affordability. The compensation and benefits are
regularly reviewed through market and peer group study. The well-crafted total
rewards help the Bank to attract, motivate and retain talent that produces desired
business results.
All employees are paid competitive remuneration package. The structure and
level of remuneration are reviewed time to time based on Banks performance and
affordability.
Other than monthly competitive base pay and a good number of allowances, Prime
Bank has variety of market-competitive benefits schemes. The various cash and
non-cash benefits include: Company car for Top Level Executives, Car maintenance
allowance, Leave fair assistance allowance, Medical treatment allowance, Maternity
benefits, Car loan facility, House loan facility, Staff loan at discounted interest rate,
House furnishing allowance, Travel allowance, Festival bonus, Annual leave etc.
PBL also provides long-term as well as retirement benefits to employees, like: Leave
encashment, Provident fund, Gratuity benefit, Retirement benefit, Partial and full
disability benefit, Death benefit to family members etc.
Career Progression & Succession Planning
PBL always plans for employees so that they can advance their career goals.
This includes advancement into more responsible positions. The company
supports career opportunities internally so that talented employees are placed in
upgraded positions and thereby enables them to deliver their greatest value to the
organization.
In addition to vertical career growth, employees may also grow horizontally.
Whenever possible, Human Resources Division mobilizes employees across
different functions and branches; thus assisting them to progress with varied skills
and experience.

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Annual Report 2014

Besides encouraging individual employee growth and development, the Bank also
gives effort to identify and retain the human resources who can potentially be the
successors of mission critical roles. Prime Bank acknowledges that Succession
Planning & Management is vital to the continued success of the Bank. So, the
Bank continuously assesses organizational, divisional and team capability gaps to
identify, develop and retain the successors in a timely manner to meet the demands
of the future.
Performance Management Program
Prime Bank has a comprehensive performance management program that
evaluates employees yearly performance against business targets at the year-end.
The performance evaluation is a step by step by process where an employee first
rates himself/herself. Then s/he is rated by the first level supervisor and then finally
by the second level supervisor. To ensure a proper performance evaluation and
rate the employees based on their comparative performance, the line Management
is guided by the Human Resources Division. This performance appraisal system
is considered as crucial for the Bank as this is a very important tool to identify
and distinguish the performers and non-performers. Prime Bank believes that a
well-executed performance appraisal system can help to reward the deserving
employees, as well as help to ensure further development program for the rest.
The comprehensive performance management also includes an assessment of
employees functional and leadership competencies. This appraisal process helps
to identify the competency gap and training needs of employees. All permanent
employees of PBL undergo annual performance appraisal process.
Reward & Recognition Program
The Bank has a well-designed Reward & Recognition program that gives special
attention to employees actions, efforts, behaviour and performance. It meets
the intrinsic psychological need for appreciation of employees efforts and
supports business strategy by reinforcing certain behaviours (e.g., extraordinary
accomplishments) that contribute to Banks success.
Followings are the different cash and non-cash awards given to employees for their
exemplary works:

The Chairmans Star of the Stars Award (CSS)

CEOs Banker with Exceptional Service Traits Award (BEST)

Outstanding Recovery Initiative Award (ORI)

Commendable Branch Performance Award (CBPA)

Trainees with Outstanding Performance Award (TOP)

Around the Year Appreciation Award (AAA) etc.

Decent Workplace
PBL believes that the business can grow favorably if the organization enables
employees through creating and maintaining a decent workplace. In PBL, there
is a decent work environment where employees can work with dignity, have the
freedom to express opinions, can participate in the decision making process that
affect their lives, and receive equal treatment and opportunity. PBL ensures security
in the workplace and social protection for employees families, better prospects for
their personal development and social integration.
Code of Ethics and Business Conduct
Prime Bank is always committed to establish the highest level of business
compliance and ethical standard. The Bank has an Employee Code of Ethics and
Business Conduct a framework of ethical behaviour for all the employees of the
organization.

168

Prime Bank maintains its reputation as a law-abiding organization and a good


corporate citizen. It complies with all the prevailing laws and regulations of the
country. Employees are trained and guided to conduct business in compliant
manner. The policy and procedures regarding Prime Banks business process are
prepared in adherence to the laws and regulations.
All employees are properly inducted to comply with Code of Ethics and conform
to the relevant laws and regulations. HR Division makes sure that during joining
employees read, understand the Code of Ethics and Business Conduct and
acknowledge the same by signing.
The Board of Directors of Prime Bank approved the Employee Code of Ethics and
Business Compliance with a commitment to set the high ethical standards so
that customers expectations and interests are protected in a compliant manner.
Employees are encouraged to report any wrong-doing within the Bank. The Head of
Internal Control and Compliance and Human Resources Divisions are the primary
channel to report any incident.

Openness in communication to foster the exchange of knowledge and ideas


Prime Bank promotes, recognizes and executes great ideas. This is possible
because the Bank encourages knowledge sharing, open house discussions,
employee-management meets, etc. Employee communications and consultation
are the lifeblood of any business. Proper exchange of information and instructions
help the Bank to function efficiently and provides the opportunity to develop
greater trust in discussing issues of mutual interest. To ensure effective employee
communications, management takes a positive lead.
In addition to day to day regular communication, Prime Bank arranges Regional
Town Hall Conference, Managers Conference etc. to allow employees with the
opportunity to interact with the Management and Board of Directors. This helps to
build an improved management-employee relation.
Achievements of 2014
The relentless pursuit of HR Division continues throughout the year. Furthermore,
it aims to ensure excellence in all HR policies and practices in line with the mission
and vision of the Bank. Followings are some of the mentionable activities done in
the year 2014:

Phase wise implementation of HR Plans and Programs

Prepared a comprehensive MT development program and completed its


implementation

Developed several automation projects including Performance Appraisal


System to enhance employee efficiency

Initiated and developed Broad banding pay structure policy for employees to
attract, motivate and retain performers

Prime Bank is moving forward with the transformational initiatives in order to


grow up with the challenge of tapping opportunities to meet both organizational
and employee needs. The transformational phase started with introducing HR as
Strategic Business Partner which already generated value in people & process
management. Prime Bank is working to ensure an employee centric work culture
with automated HR services & delivery and with focused skill development for
employees. In coming days HR will pursue solid contemporary thoughts and action
plans to draw results in many fronts as the Change Agent for Employee & Business
Development. Followings are some of the future priorities of HR Division:

Improve the overall performance management process and ensure a


performance based work culture

Review, Update, Document & Rollout Job Description, Key Performance


Indicator (KPI) for employees

Review HR Policies & Procedures and communicate to employees

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Annual Report 2014

Talent Management Program

Skill Gap Assessment and develop Performance Improvement Plan (PIP) for
the employees

Work on Employer Branding & Employee Relations Initiatives

Under development phase: TA/DA policy, employee Code of Ethics and AntiHarassment Policy, MAT Policy, Review of Leave Policy, Service Rule Book
Update etc.

Human Resources Accounting in PBL:


To understand and draw an inference on how well the Human Resources are
yielding on the investment made, Prime Bank tracks the profit and related HR costs.
In this process, the costs of recruitment, training, compensation other direct cost
related to employees are measured to estimate the overall investment. The costs
are then compared with several parameters. This analysis helps the Bank to have
an outlook and make prudent decisions on future HR investment. Valuing the
human resources and measuring the direct impact of the cost spent for employees
is difficult as there is no specific or widely adopted method. Human Resources
accounting is the process of valuing human resources as assets. Presently, this is
not accounted in the conventional accounting practices. The period of existence
of a set of human resources in an organization cannot be predicted; hence treating
and valuing them as assets in strict sense is not plausible. However, Followings are
some of the parameters which are tracked year on year.
(Taka in Million)
Particulars
Salary cost per employee

2014

2013

1.15

1.08

Operating cost per employee

2.01

1.99

Operating income per employee

4.18

4.75

Profit before provision per employee

2.17

2.76

Profit before tax per employee

1.27

1.27

Salary cost as percentage of operating cost

57.09

54.55

Salary cost as percentage of operating income

27.48

22.90

Risk factors/Potential external events:


It is needless to say that there are certain risk factors which are external in nature and
can affect the business of the Bank. The factors discussed below can significantly
affect the business:

General business and political condition



Performance of Prime Bank greatly depends on the general economic
conditions of the country. The effect of ongoing political unrest is decrease
in banks loan exposures. Many factors like blockade, violence and seasonal
effects are responsible for fall in credit. Political stability is the main
precondition to attract private sector investment which directly linked with
the credit growth of commercial banks.

iii) Potential external


events

Changes in credit quality of borrowers


Risk of deterioration of credit quality of borrowers is inherent in banking
business. This could result due to global economic crisis and supply side
distortion. The changes in the import prices affected the commodity sectors
and ship breaking industry. Deterioration in credit quality requires provisioning.

170

Changes in policies and practices of regulatory bodies to revise


practices, pricing and responsibilities of the financial institutions
PBL is subject to regulations and compliance of regulation is must. Changes
in policies with regard to interest rates, pricing have significant effect on
the performance of the Bank. Bangladesh Bank is expected to continue its
persuasion to reduce the spread and charges further which is likely to affect
the performance. Changes in provisioning requirement will also affect the
performance of the bank.

Implementation of Basel-III in Bangladesh


After finding numerous weaknesses in the global regulatory framework and
in banks risk management practices, the regulatory authorities have focused
on streamlining the global capital and liquidity rules (Basel III) with a view to
improving and strengthening the banking sectors ability to absorb shocks
arising from financial and economic stress. People directly or indirectly
involved in the financial services industry need to be aware about the changes
in the Capital and Liquidity Adequacy Requirements published in December
2010 and later in March 2013 as a supplement. The Basel Committee on
Banking Supervision (BCBS) termed the new framework as Basel III: A global
regulatory framework for more resilient banks and banking systems. The two
new liquidity ratios - the short-term Liquidity Coverage Ratio (LCR) and the
longer-term Net Stable Funding Ratio (NSFR)-speak of the need for banks to
increase their high-quality liquid assets and obtain more stable sources of
funding while requiring them to adhere to sound principles of liquidity risk
management.

Volatility in equity market



The Bangladesh Securities and Exchange Commission and the stock
exchanges improved their supervisory role but the equity market is still
volatile. The ongoing political unrest has also added to the volatility. If volatility
continues it is likely to affect the performance of the Bank.

Changes in market conditions


Changes in market conditions particularly interest rates on deposits and
volatility in Foreign Exchange market is likely to affect the performance of the
Bank. Depositors are becoming increasingly price sensitive and any unilateral
upward change by a bank will exert pressure on interest rate structure of
the banking sector. It is feared that wage earners remittances may decline
due to fall in job opportunity in international market. Unless offset by export
performances, there may be pressure in the Foreign Exchange market.

The risk of litigation


In the ordinary course of business, legal actions, claims by and against the
bank may arise. The outcome of such litigation may affect the financial
performance of the Bank.

Success of strategies
PBL is proceeding with its strategic plan and its successful implementation is
very important for its financial performance. Major deviation due to external
and internal factors will affect the performance of the Bank.

iv) Policies and


processes for
mitigating operational
risk.

Prime Bank limited (PBL) has formed a separate


Division
under
Chief
Risk
Officer
to
ensure

Risk Management
following
things:

Designing of organizational structure by clearly defining roles and


responsibilities of individuals involved in risk taking as well as managing it;

Designing of organizational structure by clearly defining roles and


responsibilities of individuals involved in risk taking as well as managing it;

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Annual Report 2014

Designing of organizational structure by clearly defining roles and


responsibilities of individuals involved in risk taking as well as managing it;

Formulation of overall risk assessment and management policies,


methodologies, guidelines and procedures for risk identification, risk
measurement, risk monitoring, defining an acceptable level of risk, mitigation
of all the core risks in line with their respective guidelines provided by
Bangladesh Bank;

Reviewing and updating all risks on systematic basis as necessary at least


annually, preferably twice a year, ensuring that adequate controls exist and that
the related returns reflect these risks and the capital allocated to support them.
The main risk areas will be (i) Balance sheet Risk Management, (ii) Credit Risk,
(iii) Foreign Exchange Risk, (iv) Internal Control and Compliance Risk, (v) Money
Laundering Risk and (vi) IT Risk. The following risks are also being reviewed:

Operational Risk

Market Risk

Liquidity Risk

Reputation risk

Insurance Risk

Sustainability Risk

Setting the portfolio objectives and tolerance limits/parameters for each of


the risks;

Formulation of strategies and different models in consistency with risk


management policy based on IT Policy and in house IT support which can
measure, monitor and maintain acceptable risk levels of the Bank;

Development of information systems/MIS inflow and data management


capabilities to support the risk management functions of the Bank.

Ensure compliance with the core risks management guidelines at the


department level, and at the desk level;

The unit will work under banks organizational structure and suggest to the
CEO to take appropriate measures to overcome any existing and potential
financial crisis;

Analysis of self resilience capability of the Bank;

Initiation to measure different market conditions, vulnerability in investing in


different sectors;

The unit will also work for substantiality of capital to absorb the associated risk
in banking operation.

Activities undertaken by Risk Management Division since inception and


recent approaches

172

Risk Management in Prime Bank as it is now, is comparatively new. Risk


Management Division (RMD) started its journey in September 2012. There is
also a Risk Management Unit (RMU) consisting of related Divisional Heads. Risk
Management Committee (RMC) of the Board also formed in year 2013;

The primary objective of RMD is to develop and execute plans that protect
people, assets, earnings, reputation, resiliency and market share, to support
the strategic and operational objectives of the organization, to minimize longterm cost of risk while doing all of those wonderful things.

Risk Management Division of PBL is currently arranging monthly meeting on


various issues to determine strategies in consistency with risk management
policy, which can measure, monitor, and maintain acceptable risk level of the
bank. Minutes of each meeting is submitted to Bangladesh Bank on quarterly
basis;

RMD looks after Capital Management, Credit Risk, Market Risk (Foreign Exchange
Risk, Interest Rate Risk, and Equity Risk), Liquidity Risk, Operational Risk (Internal
Control & Compliance Risk, Reputation Risk, and Money Laundering Risk), and
Strategic Risk. In addition, as a part of Internal Capital Adequacy Assessment
Process (ICAAP), RMD also looks after Residual Risk, Concentration Risk,
Settlement Risk, and Environmental & Climate Change Risk.

RMD analyzes the overall portfolio of the Bank through Risk Management
Paper, Stress Testing and ICAAP. RMD is also engaged in preparation of efficient
Management Information System (MIS) report for the higher management
and for the Risk Management Committee of the Board. RMD also prepares
quarterly Stress Testing report, Capital Relief calculation and monitors yearly
capital adequacy through ICAAP report.

Stress Testing in PBL:


Stress testing framework as provided by Bangladesh Bank assesses the impact
on CAR due to minor, moderate and major level of shock in terms of credit risk,
exchange rate risk, liquidity risk, equity price risk and interest rate risk. Stress testing
for credit risk assesses the impact of increase in the level of Non-Performing Loans
(NPLs) of the banks for the following scenario
Performing loan directly downgraded to B/L- Sectoral Concentration 1

Performing loan directly downgraded to B/L- Sectoral Concentration 2

Increase in NPLs due to default of top large loan borrowers

Negative shift in NPLs categories

Decrease in the Forced Sale Value (FSV) of the collateral

The stress testing based on the financial performance of the Bank as on December
31, 2014 has also been completed which shows that the bank has adequate capital
to absorb minor level of shocks for combined shock. However, for absorbing
moderate and major levels of shock which is very unlikely in the industry, the bank
may require additional capital.
The Banks operating in Bangladesh shall compute the capital requirements for
operational risk under the Basic Indicator Approach (BIA). Under BIA, the capital
charge for operational risk is a fixed percentage, denoted by (alpha) of average
positive annual gross income of the bank over the past three years. Figures for any
year in which annual gross income is negative or zero, should be excluded from
both the numerator and denominator when calculating the average. The capital
charge may be expressed as follows:
K = [(GI 1 + GI2 + GI3) a]/n
Wherev)
Approach K = the capital charge under the Basic Indicator Approach
for
calculating GI = only positive annual gross income over the previous three years (i.e., negative
capital charge for or zero gross income if any shall be excluded)
operational risk.
a = 15 percent
n = number of the previous three years for which gross income is positive.
Gross income: Gross Income (GI) is defined as Net Interest Income plus Net nonInterest Income. It is intended that this measure should:
i) be gross of any provisions;
ii) be gross of operating expenses, including fees paid to outsourcing service providers;
iii) exclude realized profits/losses from the sale of securities held to maturity in the
banking book;
iv) exclude extraordinary or irregular items;
v) exclude income derived from insurance.

Quantitative
disclosure

Particulars
b)

The capital requirement for operational risk

Solo Basis

Consolidated

Taka in Crore
205.03

214.68

173

Annual Report 2014

03

other information

174

Awards and
Recognition

ICAB National Awards for Best


Published Accounts and Reports
2002 Diamond (Financial
Sector)

ICAB National Awards 2003 for


Best Published Accounts and
Reports 2nd Prize in Financial
Sector (Banking)

6th ICAB National Awards 2005


for Best Published Accounts and
Reports 1st Prize in Financial
Sector (Banking)

Financial News Services (FNS)


Award 2005 Best Performing
Local Bank

Financial Institution Award - 10


years of Service

7th ICAB National Awards for


Best Published Accounts and
Reports 2006 1st Prize in
Financial Sector (Banking)

8th ICAB National Awards for


Best Published Accounts and
Reports 2007 1st Prize in
Financial Sector: Banking

SAFA Best Presented Accounts


Awards 2007 Bronze Award
(Banking Sector)

ICMAB National Best Corporate


Award 2007 2nd Position in
Local Banks

175

Annual Report 2014

SAFA Best Presented Accounts


Awards 2008 Joint Winner
(Under Banking Financial Sector)

10th ICAB National Awards


for Best Published Accounts
and Reports 2009- Winner
(Category: Corporate
Governance Disclosures)

10th ICAB National Awards for


Best Published Accounts and
Reports 2009- First (Category:
Banking Sector)

SAFA Best Presented Accounts


Award 2009 Overall Winner

SAFA Best Presented Accounts


and Corporate Governance
Disclosures Awards 2009
Winner in Banking Sector
Subject to Prudential
Supervision

ICMAB Best Corporate


Performance Award 2009 1st
Position (Jointly)

11th ICAB National Awards for


Best Published Accounts and
Reports 2010 1st Prize in
Financial Sector: Banking

SAFA Best Presented Accounts


Awards 2010 Winner - Joint
(Banking Sector)

9th ICAB National Awards for


Best Published Accounts and
Reports 2008 1st Prize in
Financial Sector- Banking

176

ICMAB Best Corporate Award


2010 1st Prize

Bangladesh Business Awards


2011 DHL The Daily Star

SAFA Best Presented Annual


Report Awards and SAARC
Anniversary Awards for
Corporate Governance
Disclosures 2011 Winner in
Private Sector Banks (including
Co-operative Banks)

SAFA Best Presented Annual


Report Awards and SAARC
Anniversary Award for Corporate
Governance Disclosures 2011
Overall 1st Runner Up

12th ICAB National Awards for


Best Published Accounts and
Reports 2011 1st Position in
Private Sector Banks

International Star for Leader in


Quality (ISLQ) Award, France

13th ICAB National Awards for


Best Presented Annual Report
2012 2nd Prize in Private
Sector Banks (including Cooperative Banks)

13th ICAB National Awards for


Best Presented Annual Report
2012 3rd Prize in SAARC
Anniversary Award for Corporate
Governance

ICMAB Best Corporate Award


2012 1st Position in Private
Commercial Banks (Traditional
Operation)

177

Annual Report 2014

178

SAFA Best Presented Annual


Report Awards and SAARC
Anniversary Awards for Corporate
Governance Disclosures 2012
Runner-Up in Private Sector Banks
(including Co-operative Banks)

SAFA Best Presented Annual


Report Awards and SAARC
Anniversary Award for Corporate
Governance Disclosures 2012
Certificate of Merit for Corporate
Governance

The Industry 2012 Best Rated


Bank Award

Industry Best Rated Bank Award


2012 Awarded as Strongest
Bank

The Bizz 2012 Inspirational


Company Award

International Platinum Star for


Quality Award 2012

14th ICAB National Awards for


Best Presented Annual Report
2013 3rd Prize Corporate
Governance Disclosure

14th ICAB National Awards for


Best Presented Annual Report
2013 1st Prize in Private Sector
Banks (including Co-operative
Banks)

SAFA SAARC Anniversary


Awards for Corporate
Governance Disclosures 2013
Winner

SAFA Best Presented Annual


Report Awards and SAARC
Anniversary Awards for
Corporate Governance
Disclosures 2013 2nd Runner
up in Private Sector Banks
(including Co-operative Banks)

ICMAB Best Corporate Award


2013 1st Position in Private
Commercial Banks (Traditional
Operation)

Best Bank of Bangladesh by


Global Survey (Best Emerging
Market Bank in Asia) 2013

SAFA Best Presented Accounts


Award 3rd Position

179

Annual Report 2014

Media
Highlights

180

181

Annual Report 2014

Product and
Services
Local Currency Deposit Accounts

Conventional Banking

Islamic Banking

Current Deposit
Savings Deposit
Short Term Deposit
My First Account
Female Account Sukonna
Prime Payroll Account
Security Deposit Receipt
Deposit under Scheme:

Al-Wadeeah Current Account (AWCA)


Mudaraba Savings Account (MSA)
Mudaraba Special Notice Deposit (MSND)
Mudaraba Term Deposit Receipt (MTDR)
MudarabaSukonna Deposit Account
Mudaraba My First Account
Mudaraba Special Saving Scheme Deposit:

Double Benefit Deposit Scheme


Monthly Benefit Deposit Scheme
House Building Deposit Scheme
Education Savings Scheme
Lakhopati Deposit Scheme
Prime Millionaire Scheme
Contributory Savings Scheme
Laksmapuron Savings Scheme
Account 150% Deposit Scheme
Nobagoto Account
Brighter Tomorrow

Premium Banking Monarch

182

Mudaraba Double Benefit Deposit Scheme (MDBDS)


Mudaraba Contributory Savings Scheme (MCSS)
Mudaraba Education Savings Scheme (MESS)
Mudaraba Hajj Savings Scheme (MHSS)
Mudaraba Monthly Benefit Deposit Scheme (MMBDS)
MudarabaLakhpati Deposit Scheme (MLDS)
Mudaraba Millionaire Deposit Scheme (MMDS)
Mudaraba House Building Deposit Scheme (MHBDS)
MudarabaLaksmaPuron Savings Scheme (MLPSS)
Mudaraba 150% Deposit Scheme
Mudaraba Cash waqf Deposit Scheme
Mudaraba Brighter Tomorrow Deposit Scheme

NRB Banking

Treasury

Foreign Remittance
Web-based Instant Cash Remittance
TT Remittance
Wire Transfer Remittance (SWIFT)
DD Remittance

Investment Bond for NRBs


Wage Earners Development Bond
US Dollar Investment Bond
US Dollar Premium Bond

Account Facilities for NRBs:


Foreign Currency Account
Non-Resident Foreign Currency Deposit Account
Non-Resident Taka Account

Forex & Fund Management:


SPOT, Forward & SWAPS
Import/Export Financing
Call Money, Term Lending & Borrowing
Investment in Corporate Debenture and Bonds

Primary Dealer:
Treasury Bill
Treasury Bonds
REPOs
Reverse REPOs

Non-Resident Investors Taka Account


Prime NFCD Account

ATM/Proprietary/Prepaid Cards:

Proprietary Debit Card


Debit MasterCard
Prime Cash (Bio-Metric Smart Card)
Prepaid Card Service
JCB Debit Card (Up Coming)
Monarch Dual Currency Debit Card (Up Coming)

Value Added Services

Fund Transfer

Inter-Branch Money Transfer


SWIFT
Issuing and Encashing Foreign Drafts
Electronic Fund Transfer (BEFTN)
Bangladesh Automated Cheque Processing System (BACPS)

Other Services

ALTITUDE Internet Banking


SMS Banking
Locker Services

Phone Banking

Senior Citizen Scheme

Information Kiosk

Insurance Coverage Deposit Scheme

Utility Bills Pay Service


Cash Back Service
Prime PMI (Pay in monthly installment) Facility

183

Annual Report 2014

Loans and Advances

Corporate Banking

Retail Banking

Cash Credit
Loan General
Lease Finance
Hire Purchase
House Building Loan Commercial/Residential
OD (General)
Letters of Credit
Letter of Credit Sight

SwapnaNeer Home Loan


SwapnaShaj Home Loan
SwapnaPuron Home Loan
Abash Home Loan
Car Loan
Any Purpose Loan
CNG Conversion Loan
Doctors Loan
Marriage Loan
Travel Loan
Household Durables Loan
Education Loan
Hospitalization Loan
Loan against Salary
Carnival Loan

Letter of Credit Deferred


Back to Back L/C
Stand-by letter of credit (SBLC)
UPAS L/C

Payment Against Document (PAD)/Packing


Credit(PC)/Export Cash Credit (ECC)
Foreign Document Bill Purchase (FDBP)
Inland Documentary Bills Purchased (IDBP)
EDF Loan
Loan Against Imported Merchandize (LIM)
Letter of Trust Receipt (LTR)
Payment Against Documents (PAD)
Secured Overdraft (SOD)
Time Loan
Letters of Guarantee
Advance Payments Guarantee
Bid Bond
Performance Bond
Payment Bond
Custom Guarantee
Retention Money Guarantee
Shipping Guarantee

Islamic Banking

Bai-Murabaha
Bai-Muajjal
Bai-Salam
Izarah
Hire Purchase under ShirkatulMelk
Musharaka
Mudaraba
Schemes
Hasanah Medical Investment (Shifa)

Guarantee Others

Hasanah Home Investment (Manjeel)


Hasanah Auto Investment (Burak)
Hasanah Household Durables Investment (Asbab)

Agriculture
Banking

Abad (Crop Loan)


Khamar (Farm/Non-Crop
Loan)
Nabanno (for any Agripurpose Loan)

184

SME Banking

SahajRin (Easy Loan)


SampadRin (Capital Loan)
ChaltiRin (Working Capital Loan)
MoushamiRin (Seasonal Loan)
DigunRin (Double Loan)
Anchol (Women Entrepreneurs Loan)
Prodip Loan
Srijon Loan
Prime Subidha

Credit Cards

Credit Cards:
Platinum Dual Credit Card (MasterCard & VISA)
Gold Dual Credit Card (MasterCard & VISA)
Silver/Classic Local/Intl Credit Card ((MasterCard & VISA)
Travel Quota International Credit Card (MasterCard & VISA)
RFCD International Credit Card (MasterCard & VISA)
ERQ International Credit Card (MasterCard & VISA)
FC International Credit Card (MasterCard & VISA)
Hasanah Credit Card (VISA Platinum & VISA Gold)
Hajj Prepaid Card (MasterCard)
Reward Card (MasterCard)
JCB Credit Card (Gold & Classic)

185

Annual Report 2014

SUSTAINABILIT Y REP ORT 2014

186

ORGANIZATIONAL PROFILE G4-5

3. Bangladesh Institute of Bank Management

Prime Bank Limited was incorporated as a public


company in Bangladesh under Companies Act 1994
with the registered office of the company at 119-120,
Adamjee Court Annex-2, Motijheel C/A, Dhaka-1000.
The Bank currently operates in 4 countries, and they
are Bangladesh, Singapore, Hong Kong and the United
Kingdom.

4. Central Shariah Board for Islamic Banks of


Bangladesh

The following facts are for the year 2014:


Total Number of
employees
Total Number of
operations
Net Revenue
Any significant variations
in employment number

2,867

Operations are in 4
countries
11,906 million BDT
No significant variation in
the year 2014.
No employees are
Percentage of employees covered by collective
bargaining, as it does
covered by collective
not exist in the banking
bargaining agreements
industry.
The precautionary principle is not applied directly
or openly throughout the organization; instead
PBL assesses loans regarding their impact on the
environment or other social factors. The bank has a
lot of Corporate Social Responsibility (CSR) events
throughout the year, and always tries to help preserve
the environment and enhance communities throughout
the entire country. Hence, Prime Bank Limited takes into
environmental and social factors and not only economic
factors when it does business with clients.
In its business activity, Prime Bank cooperates with
numerous entities as the buyer of products and services
from many market segments. The Banks Facility
Management Division formalizes the procurement
procedure,including the selection of suppliers, who are
nominated in tenders.
The measures for choosing suppliers in the tender
process include: good ratio of quality to cost of the
services or products and the terms of delivery and
payment. The bidders functional capabilities and
financial dependability are also taken into account. In
necessary cases, the Bank also includes environmental
and social factors among the features that affect its
selection of suppliers. The execution of agreements
of significance for the Bank is supervised. The quality
and timeliness of services and goods and financial
positioning of the suppliers are also evaluated.
List of Memberships
1. Bangladesh Association of Banks
2. Metropolitan Chamber of Commerce and Industry

5. Canada Bangladesh Chamber of Commerce and


Industry
6. The Institute of Bankers, Bangladesh(IBB)
7.

International Chamber of Commerce-Bangladesh

8. Association of Bankers, Bangladesh Limited(ABB)


9. Bangladesh Foreign Exchange Dealers Association
(BAFEDA)
10. Bangladesh Association of Publicly Listed Company
11. Primary Dealers Bangladesh Limited (PDBL)
12. Dhaka Stock Exchange Ltd.
13. Chittagong Stock Exchange Ltd.
14. American Chamber of Commerce in Bangladesh
15. Islamic Banks Consultative Forum IBCF
16. Japan Bangladesh Chamber of Commerce and
Industry
17. Central Depository Bangladesh Limited
18. Gulshan Club
19. Dhaka Club
20. Kurmitola Golf Club

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES


Prime Bank Limited has reported on GRI 3.1 last year,
and in 2014 is taking a step forward and is reporting
on GRI G4. With regards to this years Sustainability
Report, the report describes all activities of the Bank
in Bangladesh, and does not address its subsidiaries
(both locally and internationally). Also, the Sustainability
Report mostly focuses on the operations of the head
office and sometimes in its branches as well. When the
report is only mentioned for head office, it is clearly
stated in the report.

WHY IS SUSTAINABILITY REPORTING IMPORTANT TO US?


Sustainability rests in the heart of PBLs business, and we
trust in being a good corporate citizen in the communities
we operate in. To attain this objective, we take a longterm strategic view of our business and markets. Our
strategy propels our sustainability framework, which
aids us to concentrate on the core areas to administer
a sustainable business and fulfil our obligations towards
our stakeholders. We understand that to be a truly
sustainable company, business strategy must emphasis,
not just on attaining sustained financial growth and
operational excellence, but also on constructing a

187

Annual Report 2014


strong corporate governance and financial controls
environment. In addition, we believe that we must assist
our customers and communities with passion and
commitment, whilst safeguarding the environment for
future generations and supporting communities that
makes us who we are. We are persistently concentrated
on inspiring people, facilitating success and improving
lives of our customers and those in the broader
community. As part of achieving our responsibilities
to all our stakeholders, we believe that we can make
a contribution to protecting the future generation to
come by building our communities and environment a
sustainable place to live.

AT PRIME BANK LIMITED, WE INSPIRE PEOPLE,


FACILITATE SUCCESS, AND IMPROVE LIVES
At PBL, our activities revolve around our goal of
Inspiring People, Facilitating Success, and Improving
Lives. This report details the efforts undertaken by PBL
on social, economic and environmental fronts towards
protecting the future of our stakeholders. At PBL, we
believe in being the leaders in what we do and meeting
the highest standards. In line with this philosophy, we
have prepared this report based on the G4 Sustainability
Reporting Guidelines and Implementation Manual. Our
self-assessment against the G4 guidelines is provided
towards the end of the report. No external assurance
has been taken for preparing this report.
Entities included in the annual report and
sustainability reportG4-17
The entities that have been included in the annual

188

report are Prime Bank Limited and all its subsidiaries.


For the context of the sustainability report, Prime Banks
branches and Head Office have been considered in
most cases, exceptions have been stated otherwise. The
reasons for omission of its subsidiaries are the fact that
they are very small in operation and do not materially
affect the banks activities anyhow. So in regard to this
report, only Prime Bank (Branches and Head Office) are
taken into consideration.
Scope and framework of the report
The report contains the social, economic and
environmental initiatives. The various aspects mentioned
in the G4 guidelines and sector specific guidelines
were evaluated and considered material based on
their significance to our business operations and to
our stakeholders in accordance with the G4 Reporting
Guidelines and Implementation Manual issued by GRI.
Defining Report Content and the Aspect BoundariesG4-18
An external analysis was taken out to categorize general
matters of the most interest. Relevant information
available from the internet was used and an initial
priority was ascertained based on a comparative study
of the sector. Subsequently, the consequences that the
selected topics have for the various stakeholders were
clarified.
An internal analysis was then executed to distinguish
the importance that PBL placed on each of the above
issues. In this connection, the Banks strategic lines were
reviewed together with relevant internal information and
internal dialogues were held with the various divisions
involved in the development of the identified issues.

LIST OF MATERIAL ASPECTS FOR SUSTAINABILITY REPORTING AT PRIME BANK LIMITEDG4-19


With regards to PBL, the material aspects represent four content areas (the best interests of the customer, empowering
society and the community, employees quality of life and well being, and inhabiting with the environment), which
describe impacts on all of the banks stakeholders. The material aspects for the sustainability report are listed below:

1. Promotion of financial independence for


customers (Supplying information, products
and tools, independently tailored service and
consulting, and financial education)

11. Encouraging a culture of conversation and


openness with employees

2. Customer diversity and promotion of sectors


within the Bangladesh economy

12. Promoting diversity, equal opportunities, and


clarity

(Advancement of small and medium-sized


organizations)

(Promotion of gender and sector equality,


prevention of discrimination, and promotion of
diverse employment)

3. Attaining financial freedom in a multichannel


world
(Banking services via Internet, mobile, and
telephone, offering customers better access and
increased control over financial management)
4. Serving a diverse range of clients
(Encouraging a perception of excellence in
service to every customer segment)
5. Availability

(Making the buildings and branches of the bank


as well as banking services reachable to people
with disabilities)

(Arrangement
of
channels
for
organizational dialogue with employees)

13. Personal development and training


(Arrangement of training and learning at the


bank)

14. Supporting an appropriate work environment


(Policies on human capital, remuneration
and benefits, and well-being and caring for
employees in several aspects of the work
environment and of their lives)
15. Power consumption management and energy
efficiency

6. Evolving products and services to encourage


environmental sustainability

(Funding for ventures


environmental causes)

16. Controlling of paper resources

that

encourage

7. Analysing environmental risks in financing


(Supervision of environmental risks when giving
finance)
8.
Responsible
supply
chain
management
(Incorporating CSR and sustainability factors
into procuring activities)

intra-

(Management of activities intended at lowering


the banks consumption of energy)

(The banks determination to reduce the


consumption of paper in its operations)
17. Decreasing environmental impacts

(Environmental management of the bank and


reduction of its environmental effect)

18. Corporate governance and ethics

9. Growing our area of influence (Direct and indirect


economic and social effects on the Bangladeshi
economy and society)

10. Community action

19. Prevention of corruption and money laundering

(The banks assurance to the prevention of


corruption, and presentation of the activity of
the banks compliance unit)

(Spending in the community, as well as funding


of community activities and donations)

(Presentation of the composition and activity of


the board of directors, and assimilating ethics at
the bank)

189

Annual Report 2014


Presentation of Material Aspects for the Report
in Terms of Social, Economic, and Environmental
ImpactsG4 20, 21
The following diagram presents all of the material
aspects reported by Prime Bank based on two points of
view:
Impact Zone Internal or External- does this aspect
affect external stakeholders, internal stakeholders,
or both (the external circle versus the internal circle
in the diagram)

Impact Zone Social, Economic and Environmentaldoes this aspect affect create economic, social or
environmental value, or a combined value.

Customers
1. Promotion of financial independence for customers
2. Customer diversity and promotion of sectors within
the Bangladesh economy
3. Attaining financial freedom in a multichannel world
4. Serving a diverse range of clients
5. Availability
6. Evolving products and services to encourage

190

7.

environmental sustainability
Analysing environmental risks in financing

Community
8. Responsible supply chain management
9. Growing our area of influence
10. Community action
Employees
11. Encouraging a culture of conversation and
openness with employees
12. Promoting diversity, equal opportunities, and clarity
13. Personal development and training
14. Supporting an appropriate work environment
Environment
15. Power consumption management and energy
efficiency
16. Controlling of paper resources
17. Decreasing environmental impacts
Ethics
18. Corporate governance and ethics
19. Prevention of corruption and money laundering

STAKEHOLDERS ENGAGEMENT
ENGAGING OUR STAKEHOLDERS
We intend to form tangible relations with our stakeholders. This is why our reporting perception has transitioned from
an operation-oriented approach to a stakeholder-focused one. Such a focus is one of the purposes why we have
mapped the possible effect that we have on various stakeholder groups before conclusions are made.
We engage with our stakeholders in many ways and at many levels, from the queries that reach us via our website
to face-to-face meetings with government officials and regulators, customers, employees, community groups and
others. Whilst focus on certain issues such as access to finance and customer satisfaction have increased over the
years, most of the topics that stakeholders view as significant have remained consistent.
Moving forward, we expect to have better coordinated discussions with our stakeholders. While the concerns of our
various stakeholder groups do not always overlap with each other or with the business objectives of the company,
dealing with such dilemmas is an everyday part of doing business.
STAKEHOLDER OVERVIEWG4-24
Stakeholder
Group

Their Concern

Dividends and share value


Performance and integrity of
Shareholders and
the Board and management
Analysts
Public goodwill and reputation
of the Bank

Bangladesh
Bank and other
regulators

Good corporate governance


and business ethics
Legal compliance
Support for government policy

Customers

Dealing with PBL is a positive


experience
Information provided by the
Bank is accurate and reliable
Customers privacy is assured
Promises to customers are kept

Employees

Health, safety and well being

Society

Social Investment

Suppliers

Supply chain functions well


Supply chain is sustainable

Our Responsibilities
Generate profits and ensure optimal return on
investment
Proper oversight and control of the Board and
management
Banks Code of Conduct, management oversight and
response
Public affairs management
Develop and communicate a framework that
promotes good governance and ethical behaviour at
all levels
Ensure compliance at all times
Providing timely and accurate information
Immediate response to queries made by authorities
Comply with rules and regulations
Protect the privacy of our customers, including data
protection and confidentiality
Provide a positive customer experience
Comply with company values and Code of Conduct

Ensure that we properly safeguard those who


work for us and those who may be affected by our
operations
Promoting and maintaining an amicable relationship
with all employees
Shape future leaders
Recognize exceptional performers
Ensuring all employees have a proper work life
balance
Investment on Human Resource Information
Systems
Do our part to improve the quality of life for all
members of society
Investment on citizens
Investing in entrepreneurs
Addressing rural youth
Empowering women
Encourage people for saving
Work with suppliers to address issues in the supply
chain

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Annual Report 2014


FREQUENCY OF DIALOUGE WITH STAKEHOLDERSG4-26
Stakeholder

Shareholders and Analysts

Bangladesh Bank and other


regulators

Customers

Employees

Society

Media

Suppliers

Communication channels

Frequency of dialogue

General Meeting of Shareholders


Conferences
Meetings
Stock exchange and press releases
Contact through Internet, e-mail and
phone
Periodic Meetings
Regular Reports
E-Mail
Phone Calls
Website
Branches
Website
Information on statement
Satisfaction Surveys
Intranet
Website
Internal Meetings
Corporate Events
E-mail
Website
Competition and training
Conferences and seminar
Meetings
Website
Press Conference
Press Release
Telephone
E-mail
Periodic Meetings
Phone calls and emails

Once a year
Several times a year
Several times a year
Ongoing
Ongoing
Several times a year
Several times a year
Ongoing
Ongoing
Ongoing
On a daily basis
Ongoing
Several times a year
Monthly/quarterly/yearly and ad hoc
Ongoing
Ongoing
Several times a year
Quarterly/Annually
Ongoing
Ongoing
At least a dozen a year
At least a dozen a year
Several times a year
Ongoing
Several times a year
Several times a year
Ongoing
Ongoing
Several times a year
Ongoing

STAKEHOLDERS ISSUES RAISED AND ACTIONS TAKENG4-27


Stakeholders

Issues Raised

Action Taken by PBL

Shareholders

Transparent activity, instant and


effortless access to information
concerning the Bank.

PBL ensures that the annual reports have been reported in the
most transparent way possible. The bank ensures that there
is efficient exchange of information through communication
with shareholders.

Bangladesh
Bank and other
regulators

192

Proper compliance with


guidelines set by authorities.
Submitting reports on a timely
basis according to guidelines.
VAT and tax calculations
submitted accurately and timely

PBL thoroughly conform to all associated laws and regulations


in all of its activities. PBL follows forums, conferences, and
press news to ensure that the bank is up to date with all
regulations. The bank closely observes developments related
to the banking industry and present its opinions on legislation
amendments to related authorities. PBL has always ensured
all reports are submitted on a timely basis with utmost
compliance.

Employees

Steadiness of employment
and professional growth
opportunities, fair salary and
bonuses and responding
to requests submitted by
employees.

PBL has an officially approved human resource policy with


assessable goals that are observed regularly. The bank
takes initiatives to research on employee needs, motivation
and satisfaction. The HRD department also safeguards that
various channels of contact exists among employees and
management.

Customers

High quality of products and


services offered,fair consumer
practices,safety of deposited
fund and ease of communication
with the Bank.

PBL always tries to offer competitively priced products and


superior quality services that are in line with the clients
requirements. The bank uses techniques that ensure fair and
secure management of client funds and also makes sure that
there are frequent contacts with customers.

Unbiased rules for selecting and


co-operating with suppliers.

PBL uses impartial procedures for selecting vendors. It also


ensures timely performance of agreements from vendors. PBL
has a formal procedure to make sure payments are made on
a timely basis and also keeps constant contact with suppliers.

Suppliers

Ensuring that payments are


made on a timely basis.

PBL provides financial funding for social projects with


emphasis on co-operation with universities. PBL encourages
employees to take part in social campaigns.

Society

Supporting social projects.

Environment

PBL continually monitors its impact on the environment and


Reducing the negative impact on
takes all measures to reduce the impact on the environment
the environment.
as much as possible.

MAPPING OF STAKEHOLDERS OF PRIME BANK LIMITEDG4-25

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Annual Report 2014


COMMUNICATION CHANNEL AMONG STAKEHOLDERS OF PRIME BANK LIMITED

CORPORATE GOVERNANCE
Prime Bank Limited has quite a few committees that
help it to function accordingly. A few of the committees
that are mentioned for the report are as follows:
Board of Directors
Prime Bank obeyed with appropriate guidelines of
Bangladesh Bank and Bangladesh Securities and
Exchange Commission while establishing its board of
directors. The numbers of Board members are 20 out of
whom one is an Independent Director and two members
are from the Depositors. All members of the Board of
Directors are of high competency, with vast academic
knowledge and professional experience in the eld of
business. The Board approves the Banks budget and
business plans and evaluates those on a monthly basis as
to give direction as per changing economic and market
environment. The Board also appraises the strategies
and manuals of several segments of businesses in order
to establish effective risk management in credit and
other key areas of operations.

194

Executive Committee
At PBL, the Board has an Executive Committee which
consists of 7 members. The Executive Committee
assesses policies and guidelines issued by Bangladesh
Bank concerning credit and further operations of the
banking industry. It ensures the implementation of the
policies and guidelines through management. The
Executive Committee accepts the credit proposals as
per the accepted policies of the Board.
Audit Committee
In compliance with the guidelines of Bank Companies
Act & BSEC directives, the Audit Committee has been
functioning as a sub-committee of the Board of Directors
with 5 members. The Audit Committee has been
supporting the Board in safeguarding that the nancial
statements reect a true and fair view of the state of
concerns of the bank. It also carries out the oversight
responsibilities for implementation and compliance
of different policies formulated by the Board and the
Regulators.

Risk Management Committee


Duties and Responsibilities
Recognizing different risks and execute proper
strategies to control those risks, assess existing
risk management principles & procedures and take
corrective measures if necessary

sector, protability of business units, and new business


developments. Based on the Credit Committees analysis
and observation, the proposal will be forwarded to the
Managing Director, Executive Committee or Board of
Directors according to delegation.

Ensure proper organizational structure for risk


management

Form separate committees at Management level


for compliance of instructions under risk related
guidelines and supervision of their activities

Review risk management policies and guidelines,


review loan approval limit and submission to the
Board for necessary revision each year.

Credit Committee
The Credit Committee is made up of knowledgeable
individuals that that examines loan offers in terms of
compliance with legal regulations, banking principles,
the Banks goals and loan policies. The committee will
accept or decline the credit application and will put
observations accordingly.

Examine and approve the preservation of data


and reporting implemented by the management.
Ensure implementation of approved systems.

Inform the Board of Directors about the summary


of minutes of meetings of the committee.

Submit decisions/recommendations of the


Committee to the Board on quarterly basis. If
sought by the committee, internal and external
auditors will submit evaluation report to the
committee.

Shariah Supervisory Committee


Operations of Islamic banking branches of PBL
are supervised by Prime Bank Shariah Supervisory
Committee, comprising of a pool of Shariah experts
and renowned economists of the country. The basic
functions of the committee are to offer views on matters
related to Islamic banking operation of the bank from
time to time and to assist the Board of Directors by
advising them on matters relating to Shariah. Their
recommendation of Shariah Principles is strictly
respected by the Board to run Islamic banking operation
of the bank.
Asset Liability Committee (ALCO)
The Asset-Liability Committee (ALCO) is chaired by
the Managing Director and is responsible for the daily
liquidity and cash management. The ALCO reviews
reports on liquidity risk, market risk and capital
management and takes decisions accordingly. It is also
responsible for deposit-pricing strategy for the local
market and appraises liquidity contingency plans for
the Bank.
Management Committee (MANCOM)
The Management Committee is (MANCOM) responsible
for the global management of PBLs operations.
MANCOM consists of the Managing Director, Deputy
Managing Directors and Head of Divisions. MANCOM
appraises the Banks nancial data, position in the

Green Banking Cell


The Green Banking Cell (GBC) of the Bank has been
formed with the task of developing policies, planning
and overseeing the overall green banking activities of
the bank. Moreover, the Risk Management Committee
(RMC) of the Board has been appointed as the High
Powered Committee for reviewing environmental
policies, strategies and program for governing the
overall green banking activities of the Bank. In this
connection, on 30th September, 2013 the Bank
established an independent Green Finance Cell (GFC)
to dedicatedly look after the Green Financing Issues.
The GFC comprises of the representatives from General
Credit Unit, Export Finance Unit, Structured Finance
Unit, SME Banking and Agri-Culture Support Division.
Roles and Responsibilities of Green Finance Cell are as
follows:
To set annual budget for the Bank for Direct Green
Finance Products as prescribed by Bangladesh
Bank.

Act as one Focal point of the Bank to make


necessary correspondence with external bodies
regarding Green Financing issues.

Ensuring that the projects/enterprises are


in compliance with the Banks environment
requirements.

Introducing green finance for eco-friendly


business activities and energy efficient industries.

ETHICS AND INTEGRITY


Prime Bank has a framework of ethical behaviour namely
the Employee Code of Ethics and Business Conduct.
It has a special focus to establish organization-wide
Uncompromising integrity. This Code of Ethics and
Business Conduct guides employees to set the highest
ethical standards so that customers expectations and
interests are protected in a compliant manner. For
more detail please see the annual report (corporate
governance part).

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Annual Report 2014

ECONOMIC ASPECT
Economic Value Created
ECONOMIC VALUE

Amount in BDT Million

Particulars

2014

2013

Direct economic value generated: revenues

11,906.31

12,883.08

Direct economic value distributed: operating costs

2,290.87

2,287.07

Direct economic value distributed: employee wages and benefits

3,288.41

2,950.61

Direct economic value distributed: payment to providers of capital

1,286.69

935.77

Direct economic value distributed: payments to government

4,465.83

5,121.11

170.34

171.25

6,156.69

7,474.15

Direct economic value distributed: community investment


Economic Value retained
Benefit plans for PBL employees
Prime Bank provides the following benefit plans for its
employees upon retirement according to individuals
entitlement, which are: 1) Provident Fund 2) Welfare
Fund 3) Benevolent Fund and 4) Gratuity. These funds
are controlled by a Trustee Board, and decisions
regarding investing and encashment of these funds
are based on the Boards judgment. The Trustee Board

works to ensure that employees on retirement will get


full coverage of their portion of the fund. Provident Fund
contributions are made by employees (10% of basic
salary per employee) and employer (Same amount as
paid by the employee). Welfare and Benevolent Funds
are deducted from salary based on designation of the
employee. The fund position as of December 31st, 2014
was as follows:
Amount in BDT
as on 31.12.2014

Name of the Funds


Prime Bank Limited Employees Provident Fund

1,661,163,554

Prime Bank Limited Employees Gratuity Fund

1,257,675,652

Prime Bank Limited Employees Welfare Fund

141,704,062

Employees Benevolent Fund

12,201,336

Donations for the year 2014


Sl No.

196

Purpose

Amount in BDT

Eye Camp under banks CSR programs by Prime Bank Foundation

883,000

Blanket Distribution

1,991,600

Blanket Distribution

5,913,000

Blanket Distribution

3,432,000

LakhoKanthe Sonar Bangla Fund

Additional budget of cataract surgeries in the eye camps of PBL as part of


CSR activities

2,397,400

Six outreach eye camps under banks CSR Programs by Prime Bank
Foundation

1,439,400

Donation to Prime Minister's Relief Fund for flood affected people

10,000,000

5,000,000

ENVIRONMENTAL ASPECT

Foreword
Everyone has some form of impact on their natural
environment-- in an industrialized world, this is an
unavoidable reality. However, the extent to which people
negatively impact their environment can absolutely
be mitigated through a number of means. Whether
its making large efforts or simple ones, there are many
ways that everyone can do their part to help preserve
the health of the environment. We belief on sustainable
development and we are looking forward to put our
steps in this regard.
Through Green Financing, bank can ensure less carbon
emission, less use of fossil fuel, less use of harmful
chemical fertilizer and pesticide. Moreover, like other
banks, Prime Bank has also taken initiative to use less
energy, water and paper, which will help to protect
environment for the future generation. When we will be
able to protect our nature and civilization, our finance
will be protected as well as we will be able to achieve
sustainable development through this process.
Agriculture and rural credit
Agriculture is the key driving force of the economy of
Bangladesh. The overall economic development of the
country is closely interlinked with the development of
the agricultural sector. As food security, improvement
of living standard and generation of employment
opportunities of the huge population of the country are
directly linked to the agriculture sector, it is imperative
for greater institutional and policy supports for the
sector. There have been continued efforts by the

Government for the overall development of this sector


to fulfill the food and nutritional demand of the growing
population of the country and to ensure sustainable and
dependable food security. Special emphasis has been
laid on building up a modern agriculture system based
on appropriate technologies.
Agriculture as a sector depends more on credit than
any other sector because of the seasonal variations in
farmers return and a changing trend from subsistence
to commercial farming. In the absence of necessary
working capital for buying water, fertilizer and pesticides,
coupled with it the lack of the knowledge for their
balanced application, farmers often fail to reap a better
harvest from modern technology-led crops.
Prime Bank Limited also believe that if the nations
agriculture and rural base economy walk through a
techno-based eco-friendly process, all the targeted
goals will be achieved in a sustainable way. With the
same vision, Bangladesh Bank (BB) announced a farmerfriendly agriculture and rural credit policy for the fiscal
year 2014-15. The target for disbursement of agricultural
credit has been set at Taka 155.50 billion, which makes
an increase of 6.54 percent over that of the last fiscal
year.
The Central Bank of Bangladesh declared that
disbursement of agriculture and rural loan would
be considered an integral part of assessing the
performance of the countrys banks as agriculture loan
ensures financial stability. Considering priority sector,
Bangladesh Bank (BB) cut the rate of interest against
agriculture and rural credit by 2 per cent to 11 percent.

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Annual Report 2014


It is expected that the farmer friendly credit disbursement
policy of the central bank would help diversify crops,
lead to increased production and consolidate the
success in food production. Bangladesh for the first time
exportedrice to Sri Lanka. After Sri Lanka, Bangladesh

now wants to export rice to neighboring India from its


bulging stock. The Bank has been involved in disbursing
quite a large portfolio of agriculture loans during the
year, which are listed below.

Taka in Million

Sl. no.

Purpose

2014
Disbursement

Outstanding

Crops / Vegetables cultivation

332.74

368.81

Fisheries

103.50

148.33

Livestock

726.29

450.64

Irrigation equipment

2.40

9.30

Farm Machineries

46.90

71.99

Crop storage & Marketing and Others

24.60

34.26

Poverty Alleviation

0.00

34.41

Total

1,236.43

1,117.74

Table: Agriculture Loan by purpose


Cultivation of Maize, Spice and Oil seed

Bangladesh is endowed with a favorable climate and soil


conditions for the production of a variety of crops all the
year round. The major crops cultivated in the country
are rice, wheat, maize, sugarcane, potato, jute, pulses,
oilseeds, spices and vegetables.
For climate change, there is a growing need to change
the cropping pattern in the country. Water efficient high
value crops (such as maize, spices, oilseeds and pulses)
should be promoted in the drought prone region of the
country through distribution of high quality seeds and
saplings at subsidized price along with provision for
agricultural credit at rebate / low interest rate.
The Central Bank has advised to all banks that Credit
facilities shall be allowed at rebate rate (4%) under
interest loss compensation scheme of Government
for cultivation of pulse, oil seeds and spices to reduce
dependency on import and to save huge amount of
foreign exchange incurred for importing the items.
Bank may receive 6% interest loss compensation from
Government through Central Bank after realizing the
loan from borrower in full.
Prime Bank Limited has positive intention to contribute
in flourishing the crop diversification in the country
with a view to attain multifarious output in production,
saving foreign exchange, substituting rice and other
conventional crops.
In line with this the Bank has financed a substantial
amount in cultivation of Maize and spices. Credit facilities
are allowed at rebate rate (4 percent) for cultivation of

198

species and maize to reduce dependency on import


and save huge amount of foreign exchange incurred for
importing the items under interest loss compensation
from Government. During the year of 2014, PBL has

disbursed Tk.1.82 million among 30 farmers at rebate


rate (4 percent) for cultivation of species and maize.

BDT in million
SL

Crop

Loan Disbursed @ 4% interest


(January 2014 to Dec. 2014)

No. of clients

01

Spices

1.12

16

02

Maize

0.70

14

Total

1.82

30

Green Finance
Bangladesh Bank has introduced 47 Green products
under re-finance scheme and Prime Bank Limited has
taken initiative to finance under the products, but major
focus already made under the following.

Bio-gas Plant in existing dairy/poultry farm: To establish


a bio-gas plant in the existing dairy/poultry farm for
production of bio-gas for using the same in resident
or to sell the gas to others commercially. Production
capacity will be Min. 1.2 m3to Max.4.8 m3.

Bio-gas
Small dairy farm of 4 (four) cows and one bio-digester
is very effective in the context of the rural family
environment of Bangladesh and may be considered
as a commercially profitable model. This may result in
self-employment in rural areas side by side employment
of many poor men and women. Almost 17 liters of milk
(for rearing cow), 100 kg organic fertilizer and 100
cubic feet bio-gas may be produced by this model
every day. In order to make this model (cow rearing and
beef fattening) popular, Prime Bank Limited has been
financing to set up Bio-gas plant in the residence or
small dairy farm.

Combined Cow Rearing and Bio-gas Plant: To purchase


4 (four) cows and establish one bio-digester to produce
bio-gas for using the same at their resident or to sell the
same to others commercially. Production capacity will
be 4.8 m3 / bio-digester.
Medium size Bio-gas plant:To establish a Bio-gas plant in
the exiting poultry / dairy farm for production of bio gas
commercially. Production capacity will be 220 m3 / biodigester. Produced bio-gas will be used as raw material
for producing Electricity through generator.

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Annual Report 2014


Vermi-compost

Vermi-compost is the product or process of composting


using various worms, usually red wigglers, white worms,
and other earthworms to create a heterogeneous
mixture of decomposing vegetable or food waste,
bedding materials, and vermicast. Vermicast, also
called worm castings, worm humus or worm manure,
is the end-product of the breakdown of organic matter
by an earthworm.These castings have been shown to
contain reduced levels of contaminants and a higher
saturation of nutrients than do organic materials before
vermicomposting.

vermi-composting with cow dung and successfully


producing compost since last couple of years.
For reducing dependency on chemical fertilizer as well
as improver fertility of the land, which help to meet the
increasing demand of crop/food, Prime Bank Limited
visited Vermi-compost plant and plan to disburse loan
for Vermi-compost production.

Containing water-soluble nutrients, vermicompost is


an excellent, nutrient-rich organic fertilizer and soil
conditioner. This process of producing vermicompost is
called vermicomposting.
In Jhenaidah (kaligonj), Jessore, Magura, Meherpur,
Mymensingh District of Bangladesh, farmers started
Effluent Treatment Plant (ETP)
The state of environment in Bangladesh is rapidly
deteriorating. The key areas of environmental
degradation cover air pollution, water pollution and
scarcity, encroachment of rivers, improper disposal of
industrial medical and house-hold waste, deforestation,
loss of open space and loss of biodiversity. In addition,
Bangladesh is one of the most climate change vulnerable
countries. In line with global development and response
to the environmental degradation, financial sector in
Bangladesh should play important roles as one of the
key stake holders.
Commercial Banks are now required to ensure necessary
measures to protect environmental pollution while
financing a new project or providing working capital to
the existing enterprises.
Industries produce waste water, otherwise known as
effluent, as a bi-product of their production. The effluent
contains several pollutions, which can be removed
with the help of an effluent treatment plant (ETP). The

200

clean water can then be safely discharged into the


environment.
Effluent can be treated in a number of different ways
depending on the level of treatment required. These
levels are known as preliminary, primary, secondary and
tertiary (or advanced). The mechanism for treatment
can be divided into three board categories: physical,
chemical and biological, which all include a number of
different processes.
Physical unit operation include among other processes
screening, flow equalization, sedimentation, clarification
and aeration.
Chemical unit processes are always used with physical
operations and may also be used with biological
treatment processes, although it is possible to have
a purely physico-chemical plant with no biological
treatment. Chemical processes use the addition of
chemicals to the waste water to bring about changes
in its quality. They include pH control, coagulation,
chemical precipitation and oxidation.

Biological treatment is an important and integral part of


any waste water treatment plant that treats waste water
from either municipality or industry having soluble
organic impurities. The obvious economic advantage,
both in terms of capital investment and operating costs,
of biological treatment over other treatment processes
like chemical oxidation; thermal oxidation etc. has
cemented its place in any integrated waste water
treatment plant. The objective of biological treatment
of industrial wastewater is to remove or reduce the

are set up in industrial areas to prevent river water from


being contaminated by chemical-mixed waste and
water.

concentration of organic and inorganic compounds.


Biological treatment process can take many forms but
all are based around micro-organisms, mainly bacteria.
No development work would be sustainable by
damaging the environment. The Government of
Bangladesh also instructed the respective authorities
to ensure that central effluent treatment plants (CETP)
Financing Environment Friendly Brick Kiln
The emission of toxic elements from 7,500 traditional
brick kilns is causing serious health hazards of the country.
The brick kilns spew poisonous and contaminated vapor
containing suspended particulate matters rich in carbon
particles and high concentration of carbon monoxides
and oxides of sulfur that are harmful to eyes, lungs and
throats.
These air pollutants inhibit the mental and physical
growth of children. The growing number of brick fields
not only affect mental and physical health but also the
toxic exhaust of brick fields affects crops and plants in
the areas adjacent to brick fields.

Prime Bank Limited has already started screening in


financing those businesses that may deteriorate the
environment. During 2014, the bank has extended
finance of BDT 6,757.46 million in 24 projects having ETP.
Everyone should come forward to prevent water
contamination and save the environment for healthy life.
The Department of Environment has found that the brick
kilns in the country burn nearly 20 lakh or 2.0 million
tonnes of coal and another 2.0 million tonnes of wood
every year. The government recently ordered the brick
kiln owners to raise their chimneys to a height of 120 feet
in a move to limit the kilns emissions. Bangladesh Bank
introduced Green products related to brick kiln [Hybrid
Hoffman / Tunnel Kiln] and extended refinance to reduce
carbon emission. For new projects bank can approve upto BDT 50.00 million and for improvement of existing
is BDT 5.00 million vide GBCSRD Circular no. 02 dated
01-07-2013, where the rate of interest will not more than
9.00%. Prime Bank Limited also financed in improved zigzag project under refinance scheme.

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Annual Report 2014


Bio Pesticides
Now a days various types of pesticides are being used
in our country largely to control insects and infection of
crops. This massive usage of pesticides is harmful for
health and environment simultaneously. In this context,
to get rid from the dependency of pesticides and to
produce environment friendly, economically viable &
simple usage insecticides, Integrated Pest Management
(IPM) is being used in our country.
Integrated pest management (IPM) is a broad-based
approach that integrates practices for economic control
of pests. IPM aims to suppress pest populations below
the economic injury level. The UNs Food and Agriculture
Organization defines IPM as the careful consideration
of all available pest control techniques and subsequent
integration of appropriate measures that discourage the
development of pest populations and keep pesticides
and other interventions to the level that are economically
justified and reduce or minimize risks to human health
and the environment. IPM emphasizes the growth
of a healthy crop with the least possible disruption to
agro-ecosystems and encourages natural pest control
mechanisms.
M.M. Ispahani Limited is an ISO 9001 certified company,
which was established in 1820. The Company has its
corporate offices in Chittagong, Dhaka and Khulna.
Through its Tea, Foods, Textile, Jute, Match, Real
Estate, Poultry and Shipping Units; the group employs
approximately 5,000 people. Today after 192 years of
business in the sub- continent, the house of Ispahani is
still dedicated to the cause of excellence in providing
high quality goods and services. Ispahani Agro
Limited (IAL), a sister concern of M. M. Ispahani Ltd.
has been operating its agro business with three wings
Ispahani Seeds, Ispahani Biotech and Ispahani Agro
Processing since 2007.

IAL is an integrated approach of supplying agro input


to ensure Safe Food Security. In this backdrop IAL has
started its venture with quality seeds with the motto of
Farmers progress for countrys prosperity under the
finance of Prime Bank Limited. Being a sister concern
of a renowned business conglomerate, IAL feels to

202

develop a complete agro business unit which will


contribute not only to the farmers progress but also to
the harmony of nature and well-being of human being.
And consequently IAL set the goal as Safe food for
better life

In the name of Ispahani-Biotech (IBT), Ispahani has


taken an initiative to disseminate the bio-pesticide
technologies among the farmers. Ispahani Biotech, with
the commitment to maintain the balance of nature,
focuses on research & development of bio-pesticides
and relevant technologies for vegetable, rice, tea and
sugarcane. Starting its journey with different types of
pheromones and bio- control agents, Ispahani Biotech is
also striving to enrich its product line with environment
friendly solution of pest and disease management
approaches.
In the year 2013, we have established business
relationship with this group and have approved a credit
limit of Tk. 1790.00 million, favoring two concerns of this
group namely M. M. Ispahani Limited and Ispahani Agro
Limited. In January 2009, Ispahani Group joined with
the government to fulfill the mission of reducing the
use of chemical products as pesticides. Since then, the
researchers have been striving to develop Integrated
Pest Management (IPM) which is cost effective,
environment friendly and harmless to consumers
health. Under the IPM system, the insects in fruits and
vegetable fields are controlled naturally without using
any chemical. They use the friendly insects to control
the harmful insects.
The parasites of friendly insects are spread in the field
to control the harmful insects. First, they procure/
import chemicals and produce the pheromone bait. The
production procedure is completed within a day. Ispahani
Agro Limited can produce 2000-2500 bait in a day. For
production of beneficial insects, harmful insects are used.
The harmful insects are collected from local sources. It
takes 15 days to complete the entire production process.
Ispahani Ago Limited produces 300 jars at a time. But,
the insects are produced on requirement basis as they
are living things and cannot be store for long. Prime
Bank has financed Tk. 19.00 crore favoring Ispahani Agro
Limited (IAL) for their environment friendly business, and
plan to expand it in the upcoming year.

Organic Cotton
Conventionally grown cotton uses more insecticides
than any crop in the world. It is estimated that each
year cotton producers use as much as 25 percent of
the worlds insecticides and more than 10 percent of
the worlds pesticides; an incredible amount for just one
crop. Organic cotton is grown without the use of toxic
pesticides or fertilizers. It is grown using method and
materials that have a low impact on the environment.
Organic production systems replenish and maintain soil
fertility, reduce the use of toxic and persistent pesticides
and fertilizers, and build biologically diverse agriculture.

number of companies driving the expanded use of


domestic and international organic cotton. In addition,
organic cotton seed is used for animal feed, and organic
cotton seed oil is used in a variety of food products,
including cookies and chips.

Companies around the world are developing programs


that earlier use 100 percent organically grown cotton,
or blend small percentages of organic cotton with
conventional cotton in their products. There are a

Carbon Foot Print


An individuals nations or organizations carbon footprint
can be measured by undertaking a GHG (Green House
Gas) emissions assessment or other calculative activities
denoted as carbon accounting. Once the size of a
carbon footprint is known, a strategy can be devised
to reduce it. e.g. by using more solar energy, using less
paper in the office, consumption strategies in the Bank,
and other.

Scholars suggest the most effective way to decrease


a carbon footprint is to either decrease the amount
of energy needed for production or to decrease the
dependence on carbon emitting fuels. As a believer of
Green and Safe Universe theme, PBL also considers

The mitigations of carbon footprints thought the


development of alternative projects, such as solar
or wind energy or reforestation, represents one way
of reducing a carbon footprint and is often known as
Carbon offsetting. The main influences on carbon
footprints include population, economic output,
and energy and carbon intensity of the economy.
These factors are the main targets of individuals and
businesses in order to decrease carbon footprints.

an extensive focus on Carbon Offsetting and started


its journey in financing in eco-friendly industries. The
following information was collected with regards to the
consumption of energy at the Head Office of the Bank:

Source

Consumption

Mega Joules

CO2 Emission

Electricity

2,210,847 kwh

7,959,049

2,321.39 tonnes

Octane

98,275 Liters

3,144,826

242.73 tonnes

Diesel

6,065 Liters

234,109

17.59 tonnes

Source:
CO2 conversion: www.carbonfootprint.com/calculator.aspx
Mega Joules conversion: www.convertworld.com

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Annual Report 2014


Financing Environment Compliance Ship Breaking
Industry
Until the 1960s, ship breaking was considered a highly
mechanized operation, concentrated in industrialized
countries - mainly in the United States, United Kingdom,
Germany and Italy. From early 1980s to maximize profits
ship owners sent their vessels to the scrap yards of
India, China, Pakistan, Bangladesh, the Philippines
and Vietnam where pay, health and safety standards
are minimal and workers are desperate to work. It is
estimated that over 100,000 workers are employed
at ship breaking yards worldwide. Of the approximate
45,000 ocean-going ships in the world about 700 are
taken out of service every year. At the end of their sailing
life, ships are sold so that the valuable steel - about 95%
of ships mass can be reused.

scrapping around 270 ships. Bangladesh dismantling


210 ships in 2013 became the third largest ship breaking
nation in the world.

Key information about the industry (based on


discussion with the key industry players) as follows:

Number of yards: 140 (according to industry experts


only 60% yards are operative)

Number of Workers: 40,000 approximately

Industry Size : Around USD 1.5 Billion annually

Growth rate: On average 7-10%

Annual local market scrap demand : 2.40 million


MTPA

Annual local market raw materials demand for Rod


manufacturing: 4.00 million MTPA

Ship breaking is a challenging process, due to the


structural complexity of the ships and the environmental,
safety and health issues involved. Due to cheaper labor
costs and fewer health and safety regulations that have
to be followed, the developing world hosts the vast
majority of ship breaking efforts.
The International Maritime Organizations (IMO) Hong
Kong Convention for the Safe and Environmentally
Friendly Recycling of Ships (2009) set out a roadmap for
increased worker safety and environmental protection
but has yet to be fully ratified.

In Bangladesh, the ship breaking industry started its


operations in 1960s when a Greek ship MD Alpine was
stranded on the shores of Sitakunda, Chittagong after a
severe cyclone. The ship remained there for a long time
before the Chittagong Steel House brought the vessel
and scrapped it.
During the Liberation War in 1971, a Pakistani ship
Al Abbas was damaged by bombing. It was later
salvaged and brought to the Fauzdarhat seashore. In
1974, Karnafully Metal Works Ltd bought it as scrap,
introducing commercial ship breaking in Bangladesh.
The industry flourished during the 1980s. Today it has
become large and profitable industry for Bangladesh.
These two incidences are considered to be the
beginning of the ship breaking industry in Bangladesh.
The ship breaking industry gradually grew since then,
and by the mid-80s Bangladesh had become one of the
major ship breaking nations in the world.
Bangladesh was the top ship recycling nation from
2004-2009. Bangladesh became the second in 2012,

204

The Government of Bangladesh has recently introduced


new national policies and legislation to improve the
environmental and occupational health and safety
standards in the ship breaking yards. But there is a long
way to go.
Generally following compliances are related to the ship
breaking:
1. NOR (Notice of Readiness).
2. Port Clearance Certificate (No Objection
Certificate);

3. Rummaging Certificate that ensures due


rummaging of the vessel;
4. A copy of import general manifest accepted by
the Chittagong Customs confirming the Vessel
is for scraping;
5. Original TRIM and stability Book;
6. Gas free Certificate for human entry;
(Certificate stating that the vessel is free from
any Gas harmful for human entry)
7.

Light dues payment receipt issued by Customs;


and

8. Naval Clearance in favor of the importer.


9. Compliance of Clearance Certificate from
Environment Department (Certificate already
obtained).
10. Permission from Directorate General, Shipping
of Bangladesh.
11. Compliance of High Court Division Observation.
12. Proposed importing ship is not included in the
blacklist of Greenpeace.
13. All other required permission related to ship
breaking industry.
Ship breaking generates a lot of jobs, and it is estimated
that some 30,000 to 50,000 people are directly
employed in the ship breaking industry in Bangladesh.
Additionally, another 1, 00,000 are indirectly involved in
the business. Most of the laborers are hired by the ship

yards through local contractors on a ship by ship basis.


A labor earns around 1-3 dollars per day depending on
the type of work. Some 300-500 people are typically
employed on a temporary basis for dismantling a ship,
and many more are employed in downstream activities
for recycling of all kind of materials from the ships.
Ship breaking is therefore a lucrative business with few
risks for the yard owners, investors and money lenders.
The ship breaking industry in Bangladesh is estimated
worth an annual turnover of around 1.5 billion dollars.
Considering the cumulative demand of steel and
potential threat to environment, Prime Bank Limited is
concentrating on financing environment compliance
ship braking industry. The bank has financed this
sector after doing due diligence on Environmental
Risks for each customer and the bank only financed
to those customers, who have obtained membership
license from Bangladesh Ship Breakers Association
and completed all ancillary works, e.g. they also have
obtained Environmental Clearance Certificate from
Environment Department, Chittagong Division. The
customers should have Effluent treatment plane (ETP),
workers recreation center, labor barrack in their yards as
per instruction of Environment Department.
In the year 2014, our Bank financed a substantial amount
in this sector which is around Tk.117.75 crore.

Green Banking at Prime Bank Limited


Prime Bank Limited always believes growing in
a responsible manner maintaining eco-friendly
environment which is essential for our survival. As a
Bank, we play an intermediary role between economic
development and conservation of the environment.
Our Green Banking activities are on multidimensional
areas which include both in-house green activities and
green financing activities to support Green Economy.
Prime Bank Limited as one of the leading commercial
banks of the country is committed to ensure proactive
and prudent management for the environmental
degradation arising from our business activities.
Major Green Banking Initiatives taken by Prime Bank
Ltd
Green Banking Policy
Prime Bank Ltd. has outlined a comprehensive
Green Banking Policy for implementing Green
Banking activities in line with the Bangladesh Banks
BRPD Circular No.02 dated February 27, 2011. During
the year 2014, a revised Green Banking Policy was
approved by the RMC of the Board.

Green Office Guide


The Bank has already developed Green Office
Guide and circulated it to all employees for creating
awareness on green banking activities & providing
instructions on efficient use of energy, water, saving
paper, etc. However it is mentionable that, PBL is in
process of introducing an advanced Green Office
Guide.

205

Annual Report 2014

E&S Policy

Prime Bank Ltd. also engaged FI Konsult s.r.o, a Czech


Republic based consulting company to develop
Environment & Social (E&S) Management policy for
Prime Bank Ltd. which may be implemented at the
end of 2015.

Requisition for printing & stationery, office


stationery, printing of MICR cheque and pool
car are done by online requisition software.

Trade Service Department has been


centralized, which ultimately reduces paper
consumption.

Duplexing (two-sided printing) when possible


as well as limiting printed materials/e-mails/
memos to only what is necessary:

Green Financing
The Green Finance Cell of Prime Bank Limited
is in operation since 2013 to exclusively look after
the Bangladesh Bank enlisted green financing
products. During 2014, the bank has extended
finance of BDT 6757.46 million in 24 projects having
ETP. The bank has further strengthened its green
banking initiatives by financing environmentfriendly Hoffman Kiln and Zigzag based automated
brick fields, which contribute towards a greener
climate. Prime bank disbursed 32.00 million to set
up 4 Hybrid Hoffman Kiln (HHK) projects.

Alternate Delivery Channels


Prime Bank Limited has established various alternate
delivery channels i.e. Online Banking, Internet
Banking facilities, Automated Teller Machine (ATM),
SMS Banking facilities, Biometric Smart Card based
alternate banking service, Cash Back Service etc.
These are the platform that gives our customers
the convenience of banking anytime anywhere
and ultimately reducing the carbon footprint of the
customers by ensuring they do not have to resort to
physical travel to Banks service outlets.

Arranging paperless Credit Review Committee


meeting (both SME & Corporate) by arranging
presentation with Projector.

Use of e-mails instead of letter for internal


communication;

Digital circular archiving solution for archiving


regulatory and internal circulars;

Introduced E-DOC system for Credit


Administration Division, which allows electronic
archiving of security documents along with
reminder system for better monitoring and
control;

Agenda and Compliance Management


Software was introduced, which eliminated
the process of presenting paper based memo
during the meeting of the Executive Committee
of the Board;
Human Resource Division has successfully
launched online ACR (Annual Confidential
Report);

Conserving Energy

Encouraging turning off and/or unplugging all


lights and electronic equipment (computers,
monitors, photocopiers, cell phone chargers,
printers, radios, etc.) when not in use, and fully
utilizing power-saving settings when in us.

Replacing incandescent bulbs with CFLs


when they need to be replaced, internally and
externally.

A circular has been issued by the Human


Resource Division (HRD) for all employees to
encourage staffs for adopting car sharing with
colleagues in order to reduce carbon emission.

The Bank currently has nine (9) branches, which


are well equipped to arrange video conference
which ultimately reduces official travels.

Renewable Energy Usage


The Bank has installed solar panels at 21 branches
as well as 12 ATM booths and SME unit offices as
part of its commitment to the usage of renewable
energy resources.

Paper Consumption Management

206

Training and Education


Human Resource Training & Development Center of
PBL arranged 12 Green Banking training Programs
for 403 employees during 2014 to familiarize with
the Green Banking aspects. Besides that, officials
of the Bank attended Training programs/workshop/
seminars on Green Banking issues arranged by
Bangladesh Bank Training Academy.

Customer Awareness Program to educate clients


The Bank arranged a customer awareness program
on March 19, 2014 to create awareness among
120 participants to protect the environment from
different pollution and hazards.

Disclosure and Reporting of Green Banking


Activities
PBL has been regularly reporting its Green Banking
Activities to Bangladesh Bank on quarterly basis

since 2011. In view of highlighting our Green


Banking activities and creating awareness amongst
the stakeholders, a separate section has been
incorporated in our Annual Report and Banks
official website for disclosing our Green Banking
activities.

of the flood, cyclone and drought prone areas


at the regular interest rate without charging
additional risk premium.

The Bank has allocated a significant amount for


climate risk fund for the coming year.

The Banks distance meetings shall be


conducted through Video Conference rather
than physical visit.

Already solar panels have been installed in


some of our branches, ATM booths & SME Unit
Offices and we are expecting to expand the
number of branches having solar panels.

The Bank is arranging Training/Workshop


related to Green Banking for our employees
and committed to continue the same in the
coming year.

The Bank has planned to arrange more seminars


to make the clients conscious regarding Green
Banking as well as to avail Green Products.

Commitment to the environment


Prime Bank Limited has made some future planning to
make 2015 a productive year for Green Financing, which
are presented below:
The Bank is committed to lessen consumption
of electricity, water, paper, fuel in the upcoming
year and will take necessary actions proactively.

The Bank has allocated a significant amount for


Direct Green Financing for the coming year.

The Bank has allocated a significant amount for


extending support for the economic activities

207

Annual Report 2014

Labor, Society and Human Rights Aspect


Prime Bank has a glorious culture of winning together! From previous experience the Bank is cognizant that if
employees are properly empowered, they become more engaged and go extra miles to fulfil organizations ambition.
Engaged employees are likely to take more responsibility and embrace accountability which helps to achieve the
sustainability strategies.

Motivated and engaged employees


Prime Bank has a diverse group of motivated and
engaged employees. From experience it knows that
if employees are properly empowered, they become
more engaged and go extra miles to fulfil organizations
ambition. Engaged employees are likely to take more
responsibility and embrace accountability which helps
to achieve the sustainability strategies. The Bank has
positioned itself with a performance-driven rewarding
work culture; where employees are treated with respect
and receive plenty of development opportunities. Prime
Bank has a special focus on:

208

Ensuring a balanced diversity

Promoting human capital development

Providing competitive compensation and benefits

Promoting a performance centric culture

Protecting human rights

Ensuring workplace health and safety

Ensuring equal opportunity

All the people related issues in Prime Bank are governed


by the well-defined policies and procedures which are
duly reviewed by the Management time to time.
Diversity in Workplace
Prime Bank believes that diverse, heterogeneous teams
generate greater creativity, innovation and business
development. An inclusive culture maintains and drives
workforce diversity by fostering the exchange of ideas
and collaboration among individuals and across groups.
To speak simply, our constant success depends in part
on maintaining a plurality of perspectives.
Employees by age group and gender:
Age group
Less than 30 years
30 to 50 years
Over 50 years
Grand Total

Grand Total Percentage


605
21.1%
2,134
74.4%
128
4.5%
2,867
100%

We practice equal employment opportunity; for


competent candidates regardless of their gender, age,

locality or ethnicity. While recruiting fresh graduates, the


Bank sources the pool from different recognized public
and private universities; with a view to creating a diverse
work force.
Employees by religion:
Religion
Islam
Hindu
Buddhist
Total

No. of Emp.
2,662
196
9
2,867

Percentage
92.8%
6.8%
0.3%
100%

Besides, our ration of male and female employees has


been increasing over the time. Currently, approximately
21.00% of total employees are female. On the other
hand, 25% of the Board of Directors represents females.
Gender diversity among employees:
Gender
Male
Female
Total

No. of Employees
602
2,265
2,867

Percentage
21%
79%
100%

Increasing percentage of Female over the years:


Year
2011
2012
2013
2014

% of Female Employees
18.59%
19.77%
20.52%
21.00%

% of Female Employees
21.00%

20.52%
19.77%

18.59%
2011

2012

2013

2014

% of Female Employees

Gender diversity among Board members:


Gender
Male
Female
Total

No. of Members
15
5
20

Percentage
75%
25%
100%

New recruitment by gender and age:


Gender
Male
Female
Total

No. of
Employees
259
61
320

Percentage
80.9%
19.1%
100%

Age group
Less than 30
years
30 to 50 years
Over 50 years
Grand Total

Grand Total

Percentage

246

76.9%

72
2
320

22.5%
0.6%
100%

Employee turnover by gender and age:


Gender
Male
Female
Total
Age group
Less than 30 years
30 to 50 years
Over 50 years
Grand Total

No. of
Employees
142
14
156
Grand Total
50
99
7
156

Percentage
91%
9%
100%
Percentage
32.1%
63.5%
4.5%
100%

For the year 2014, the turnover rate is 5.57%.


Learning & Development
In Prime Bank, Human Resources (HR) Division regularly
undertakes effectively designed training programs
targeting the right group of employees through proper
training need assessment. Prime Bank believes that
continuous efforts should be given so that employees
acquire and develop the right set of skills required to
face the challenge of ever changing market.
In Prime Bank, the employee development plan is based
on proper training need assessment. In 2014, Banks
internal HR Training and Development Centre arranged
training on different topics for 4,370 enthusiastic
participants. Besides, a total of 644 employees were
sent to participate in various training programs/
conferences in home and abroad. In total, the number of
participants who participated in trainings / conferences
has increased by 48% over the last year. Average
number of hours of training per year per participant is
approximately 32.5 hours.
The banking sector is complex and diverse with evolving
nature of threats and the risks. So, the training module
is updated time to time for employees of the Bank in the
changing context of financial market.
Compensation & Benefits
To maintain the market competitiveness, the
compensation and benefits of Prime Bank are regularly
reviewed through market and peer group study. The
well-crafted total rewards help the Bank to attract,
motivate and retain talent.

209

Annual Report 2014


In PBL, the Board of Directors is not eligible for any
compensation. They are paid honorarium for attending
meetings only. On the other hand, all employees are paid
competitive remuneration package. The remuneration
policy of the Bank does not allow any discrimination
between male and female employees. In addition,
employees are paid bonus based on yearly business
performance.
In addition to monthly competitive base pay and a good
number of allowances (e.g., House Rent allowance,
Medical allowance, Conveyance allowance etc.),
Prime Bank has variety of market-competitive Benefits
schemes designed to motivate the employees. The
various cash and non-cash benefits include:

Company provided car for top level Executive


employees

Car allowance for all Executive level


employees

Leave fair assistance allowance

Medical treatment allowance

Maternity benefits

Car loan facility

House loan facility

Staff loan at reduced interest rate

Hard furnishing allowance

Mobile phone allowance

Travel allowance

Technical allowance

Festival bonus

Allowance for employees meritorious


students

Annual leave

Maternity leave

Study leave etc.

The Bank also provides long-term as well as retirement


benefits to employees:

Leave encashment

Provident fund

Gratuity benefit

Retirement benefit

Partial and full disability benefit

Death benefit to family members etc.

The total compensation and benefits system of Prime


Bank tracks costs and is linked with performance, while
maintaining a balance with the business affordability.

210

Performance Management Program


Prime Bank has a comprehensive performance
management program that evaluates employees yearly
performance against business targets at the year-end. In
addition, their functional and leadership competencies
are also rated by the line management. This appraisal
process also identifies the competency gap and training
needs of employees. All employees (except employees
under probation or training) of the Bank undergo
annual performance appraisal process. The process
ensures that clear feedback on improvement points
(performance and professional capabilities) is provided
to employees by their Managers to promote employees
long-term career development and improved
contribution to organizational performance. All regular
employees undergo the annual performance and career
development review.
Work-life Balance
Prime Bank wants it employees to balance the work
and personal life and has organization-wide practices
and policies that actively support employees to achieve
success at both work and home. Management is also
open and shows flexibility in regard to a balanced worklife.
In Prime Bank, employees are entitled to sufficient annual
leave and sick leave with pay. To enjoy vacation with
family, Bank provides Leave Fare Assistance Allowance
to employees. All female employees are eligible for
Maternity Leave (Parental Leave) with pay for a period
of six months. In 2014, a total of 54 female employees
availed Maternity leave. After completion of the leave,
they returned to work and are still continuing with the
organization.
Culture
Culture plays a vital role to create a high performance
environment that supports sustainability strategy
implementation. Prime Bank carefully develop, shape
and impact organizational culture by: practicing values
appropriate for the bank; defining working relationship
and communication pattern between superior and
subordinates; governing rules and regulations which
control employees behaviour; promoting a strong
employer brand through which employees identify
with the organization; maintaining effective reward
system that affects employees loyalty and empowering
employees to demonstrate their innovativeness not only
to be competitive in the market but also to achieve a
sustainable growth.
Healthy and Safe Work Environment
In Prime Bank, the physical, mental and social well-being
of the employees always get priority. Healthy, productive

and motivated employees are the foundation of a


successful organization. Prime Bank helps employees
to assume responsibility for their own personal
behaviour in health-related matters, and support healthpromoting general conditions within the Company. We
continuously focus on improving health and safety of
employees that includes proper work place design and
decoration of head office and branches, maintaining the
cleanliness at work space, holding awareness session
related to physical and psychosocial well-being, email
communication on various health and safety related
topics, sending alerts to employees on emergency
situations, arranging fire drill sessions, financial
support for medical care etc. Because of the nature of
operations, Bank employees are not usually exposed
to work-related injury, occupational diseases or fatality.
Yet, the Bank remains cautious so as not to create any
hazardous work condition.
Decent Workplace
Prime Bank has a decent work environment where
employees can work with dignity, have the freedom
to express opinions, can participate in the decision
making process that affect their lives, and receive equal
treatment and opportunity. The Bank is committed to
ensure the best practices in compliance with the labour
code of the country. Bank Management believes that
the business can grow favourably if the organization
enables employees through creating and maintaining a
decent workplace.
In Prime Bank, employees have the right to exercise
freedom of association or collective bargaining
following the legal procedure of country laws. However,
employees have never formed or wanted to form any
collective bargaining agency.
The Bank follows non-discriminatory approach in all
HR policies and practices. The salary of an employee is
determined based on his/her competency, experience
and performance.
During the period of 2014, neither any incident regarding
discrimination nor any grievance related to labour
practices nor human right has been reported.
The Bank neither employs child labour nor has any
provision for forced labour. Employees have the right
to resign from their employment serving proper notice
period and following the internal procedures.
Ensuring a decent workplace also encompass Banks

investment decisions as well as agreements with the


suppliers and contractors. For instance, human right, as
appropriate, is covered as an integral part of decision
making for major financial investments. Among all the
significant investments, garments and manufacturing
industry contain major stakes where issues related to
human rights are more relevant and critical. Hence, any
such investment agreement is subject to screening of
human right issues along with other criteria.
On the other hand, all the agreements of Prime Bank
with suppliers or contractors undergo due assessment
process which requires complying with Labour Code
and other applicable laws of the country. Moreover, the
procurement decisions are also subject to conformity
with International Labour Conventions. The team
involved in procurement visits suppliers and contractors
premises on need basis to monitor working conditions
and other relevant issues like labour practices, human
right etc.
The security personnel employed by the Bank are
formally trained and aware of policies and procedures
regarding human right issues. The training requirement
also applies to third party organizations that provide
security personnel to the Bank.
Openness in communication for a better employeemanagement relation
Employee communications and consultation are
the lifeblood of any business. Proper exchange of
information and instructions helps the Bank to function
more efficiently and provides the opportunity to build
greater trust among employees and management in
discussing issues of mutual interest. To ensure effective
employee communications, management takes a
positive lead.
In addition to day to day regular communication,
Prime Bank arranges Regional Town Hall Conference,
Managers Conference etc. to allow employees with
the opportunity to interact with the Management and
Board of Directors. This helps to build an improved
management-employee relation.
Any operational changes are properly planned and
managed. Management follows a participative
approach during any major transformation followed
by prior communication to the employees. Since there
is no trade union or employee association, no notice
period regarding operational change is stipulated by
any collective agreement.

211

Annual Report 2014

Product Responsibility Aspect


Prime Bank ensures that all products are compliant as
per Bangladesh Bank, the central bank, product program
guideline. The divisions that are jointly responsible
for ensuring that all products are properly developed
and compliant are: Business Divisions (Retail Banking,
Corporate Banking, SME Banking, Cards Division, Islamic
Banking Divisions, Alternate Delivery Channels Divisions,
and Centralized Clearing Cell), Research & Development
Division Marketing Division and Operations Division. The
Marketing Division has a draft brand guideline which
they follow to ensure all marketing communications are
adherent to all the relevant laws and regulations.
However, no matter how much innovative a banks
products are, quality customer service defines the
forefront in building and maintaining profitable banking
relationship. As competition in the banking industry is
intense, there is no alternative in providing differentiated
customer service. Providing differentiated and superior
customer service requires continuous tracking of service
of an organization. In this regard, Prime Bank Ltd. one
of the largest private commercial banks of Bangladesh,
has conducted a comprehensive Customer Satisfaction
Survey at our branch level covering all divisions of
Bangladesh in 2014.
The objectives of the study wereto assess customer
satisfaction and perception of our banking service
personnel,to identify customer satisfaction and
perception of our banks products and services, to
determine customers satisfaction and perception on
fees, charges and rates of products/services compared
to other competitor Banks offerings, to determine
customer satisfaction and perception on preferred
channels (Branch, ATM, Online/Internet banking,
mobile banking etc.).The Overall Satisfaction Score was
derivedfrom performances on (a) Customer Service

About this Report


Effect of any restatements of information provided
in previous reportsG4-23
Prime Bank would like to state that there have been
no significant restatement of any information. All
information is relevant for the year 2014, and there
have been no significant restatements. If there are any
restatements, it is because the matter is still material
as it was in 2013. But there have been no significant
restatements overall throughout the report.
Significant changes from previous reporting periods
in the Scope and Aspect BoundariesG4-22

212

(b) Products and services (c) Pricing and (d) Preferred


Channels.
Quantitative approach has been followed to conduct
the structured questionnaire survey. Stratified random
sampling has been followed covering all geographic
regions with sample size of 800. It has been observed
that customers priority factors are in order of preference
are ATM Booth availability, Customer Care, Convenient
Branch Location, Goodwill and Security of Money from a
Bank while deciding to open an account. Prime Bank has
done well mostly in Customer Care segment achieving
rating points around 5.8-6.1 out of 7, while in Banking
Fees & Charges it has scored points of 5.1-5.3 out of 7. In
general, Prime Banks image is also acceptable as they
achieved rating points of 5.7-5.8 on an average. Prime
Banks customer satisfaction and recommendation are
also on an acceptable level as in both cases Prime Bank
achieved rating points of 6 out of 7.The data collection
and analyses were conducted by a third party research
agency so that authentic, unbiased findings could
be derived from the survey. R&D division of the bank
monitored the overall data collection by the third party
agency.
After the survey, findings were submitted to the top
management. The management then recommends
remedial actions required to increase the level of
satisfaction of the customers. Major problems and
complaints are dealt by specifically communicating with
the Head of Branch/Branch Manager. Thus corrective
actions are taken and customer satisfaction at all points
is ensured. Prime Bank would also like to state that there
have been no issues of non-compliance with regulatory
bodies in 2014. There were no reported incidents or
there have been no significant payment of fines to
regulatory bodies during the year.

There have been no significant changes in the reporting


period in the Scope and Aspect Boundaries for this year.
This year we are issuing the Sustainability Report based on
GRI G4 and are trying to improve our reporting standards.
But there have been no significant changes from the
previous period regarding Scope and Aspect boundaries,
and throughout the report it can been seen that many of
our material aspects are still similar as the previous year.
Information related to the Sustainability Report
2014G4-28, 29,30,31,32, 33
Prime Bank would like to clearly mention that the
Sustainability Report refers to the year 2014 only
(meaning from January 1, 2014 to December 31, 2014).

The Sustainability Report for 2013 was reported under


the GRI G3.1 basis and successfully went through the
Application Level B check, and this year we have tried
our out most to report on the GRI G4 standards. The
Reporting cycle for all our sustainability reports are on
a yearly basis. Any questions regarding this report can
be reached to Mr. Shahjahan Majumder, FCA, Head of
Financial Administration Division.
Prime Bank would like to clearly state that we have

reported on the GRI G4 Core Option for the


Sustainability Report 2014. No external assurance was
given for the Sustainability Report 2014. Assurance
providers are not available in Bangladesh, hence there
was no way to get assurance for this report.
The Global Reporting Initiative has verified the
integration of information relative to relevant aspects
and scope, as well as stakeholder implication
Materiality Disclosures Service

213

Annual Report 2014

GENERAL STANDARD DISCLOSURES

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

STRATEGY AND ANALYSIS


G4-1

Statement from the most senior decision- Managing Director's Statement, Annual Report
maker of the organisation
page no. 34

No

ORGANIZATIONAL PROFILE
G4-3

Name of the organisation

Prime Bank Limited

No

G4-4

Primary brands, products, and services

Products and Services, Annual Report page no.


182

No

G4-5

Location of the organisation

Organization Profile

No

G4-6

No. of countries where the organisation


Organization Profile
operates

No

G4-7

Nature of ownership and legal form

Prime Bank has been operating as a public


listed company since its inception.

No

G4-8

Markets served

Prime Bank serves the Bangladesh, Hong


Kong, Singapore and UK markets through its
branches and subsidiaries. Other markets are
served by liaisons, but not directly through
Prime Bank.

No

G4-9

Scale of the organisation

Organization Profile

No

G4-10

Workforce

Organization Profile,

No

G4-11

Percentage of total employees covered by


Organization Profile
collective bargaining agreement

No

G4-12

Supply chain

No

G4-13

Significant changes during the reporting There have been no significant changes in the
period
reporting period

No

G4-14

Precautionary approach

No

G4-15

External charters, principles or other initiatives PBL does not subscribe to any of these charters

No

G4-16

List of Membership of Associations

Organization Profile

No

Organization Profile

Organization Profile

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES


G4-17

Entities included in the


consolidated performance

organisations

pg. 188

No

G4-18

Process for defining report content and aspect


pg. 188
boundaries

No

G4-19

Material aspects

pg. 189

No

G4-20

Aspect boundaries within the organisation

pg. 190

No

G4-21

Aspect boundaries outside the organisation

pg. 190

No

G4-22

Effects of any restatement

pg. 212

No

G4-23

Significant changes during the reporting


pg. 212
period

No

STAKEHOLDER ENGAGEMENT

214

G4-24

Stakeholder groups engaged by the


organisation

pg. 191

No

G4-25

Basis for identification

pg. 193

No

G4-26

Approach to stakeholder engagement

pg. 192

No

G4-27

Key topics and concerns raised by


stakeholder

pg. 192

No

General Standard
Disclosures

Standard Disclosure Title

External
Assurance

Page Number

REPORT PROFILE
G4-28

Reporting period

pg. 212

No

G4-29

Date of the most recent previous report

pg. 212

No

G4-30

Reporting cycle

pg. 212

No

G4-31

Contact point for questions regarding report

pg. 212

No

G4-32

In accordance option chosen

pg. 212

No

G4-33

Assurance

No, pg. 212

No

Governance structure of the organisation

Corporate Governance

No

Ethics and Integrity, Corporate Governance


Annual Report page no.

No

GOVERNANCE
G4-34

ETHICS AND INTEGRITY


G4-56

Organisations value principles and norms of


behaviour

SPECIFIC STANDARD DISCLOSURES


DMA and
Indicators

Standard Disclosure Title

Page Number
CATEGORY: ECONOMIC

MATERIAL ASPECT: ECONOMIC PERFORMANCE


G4-DMA

Generic Disclosures on Management


Approach

G4-EC1

Direct economic
distributed

G4-EC2

Financial implications and other risks and


opportunities for the organization's activities
due to climate change

No

G4-EC3

Coverage of the organization's defined benefit


Economic Aspect
plan obligations

No

G4-EC4

Financial assistance received from


government

value

No

generated

and

Economic Aspect

No financial
government

assistance

No

received

from

No

MATERIAL ASPECT: MARKET PRESENCE


G4-DMA

Generic Disclosures on Management


Approach

No

G4-EC5

Ratios of standard entry level wage by


gender compared to local minimum wage at Not applicable for Banks.
significant locations of operation

No

G4-EC6

Proportion of senior management hired from


the local community at significant locations of All senior management are from Bangladesh.
operation

No

MATERIAL ASPECT: INDIRECT ECONOMIC IMPACTS


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EC7

Development and impact of infrastructure


investments and services supported

No

G4-EC8

Significant indirect economic


including the extent of impacts

No

No

impacts,

MATERIAL ASPECT: PROCUREMENT PRACTICES


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EC9

Proportion of spending on local suppliers at All suppliers are local suppliers, no suppliers
significant locations of operation
are from other countries.

No
No

CATEGORY: ENVIRONMENTAL
MATERIAL ASPECT: MATERIALS
G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN1

Materials used by weight or volume

No

G4-EN2

Percentage of materials used that are recycled


input materials

No

Environmental Aspect

No

MATERIAL ASPECT: ENERGY


G4-DMA

Generic Disclosures on Management


Approach

No

215

Annual Report 2014

General Standard
Disclosures

Standard Disclosure Title

Page Number

G4-EN3

Energy consumption within the organization

G4-EN4

Energy consumption
organization

G4-EN5

Energy intensity

No

G4-EN6

Reduction of energy consumption

No

G4-EN7

Reductions in energy requirements of products


and services

No

outside

of

Environmental Aspect

External
Assurance

the

No
No

MATERIAL ASPECT: WATER


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN8

Total water withdrawal by source

G4-EN9

Water sources significantly


withdrawal of water

G4-EN10

Percentage and total volume of water recycled


and reused

No
No

affected

by

No
No

MATERIAL ASPECT: BIODIVERSITY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN11

Operational sites owned, leased, managed in,


or adjacent to, protected areas and areas of
high biodiversity value outside protected areas

No

G4-EN12

Description of significant impacts of activities,


products, and services on biodiversity in
protected areas and areas of high biodiversity
value outside protected areas

No

G4-EN13

Habitats protected or restored

No

G4-EN14

Total number of IUCN Red List species and


national conservation list species with habitats
in areas affected by operations, by level of
extinction risk

No

No

MATERIAL ASPECT: EMISSIONS


G4-DMA

Generic Disclosures on Management


Approach

No

G4-EN15

Direct greenhouse gas (GHG) emissions

No

G4-EN16

Energy indirect greenhouse gas (GHG)


emissions

No

G4-EN17

Other indirect greenhouse gas (GHG)


emissions

No

G4-EN18

Greenhouse gas (GHG) emissions intensity

No

G4-EN19

Reduction of greenhouse gas (GHG)


emissions

No

G4-EN20

Emissions of ozone-depleting substances


(ODS)

No

G4-EN21

NOX, SOX, and other significant air emissions

No

MATERIAL ASPECT: EFFLUENTS AND WASTE

216

G4-DMA

Generic Disclosures on Management


Approach

No

G4-EN22

Total water discharge by quality and destination

No

G4-EN23

Total weight of waste by type and disposal


method

No

G4-EN24

Total number and volume of significant spills

G4-EN25

Weight of transported, imported, exported, or


treated waste deemed hazardous under the
terms of the Basel Convention Annex I, II, III,
and VIII, and percentage of transported waste
shipped internationally

No

G4-EN26

Identity, size, protected status, and biodiversity


value of water bodies and related habitats
signifcantly affected by the organization's
discharges of water and runoff

No

No significant spills have happened due to the


Bank's finance in 2014.

No

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

MATERIAL ASPECT: PRODUCTS AND SERVICES


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN27

Extent of impact mitigation of environmental


impacts of products and services

No

G4-EN28

Percentage of products sold and their


packaging materials that are reclaimed by
category

No

No

MATERIAL ASPECT: COMPLIANCE


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN29

Monetary value of significant fines and total


number of non-monetary sanctions for noncompliance with environmental laws and
regulations

No

No

MATERIAL ASPECT: TRANSPORT


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN30

Significant
environmental
impacts
of
transporting products and other goods and
materials for the organization's operations, and
transporting members of the workforce

No

No

MATERIAL ASPECT: OVERALL


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN31

Total environmental protection expenditures


and investments by type

No
No

MATERIAL ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN32

Percentage of new suppliers that were


screened using environmental criteria

No

G4-EN33

Significant actual and potential negative


environmental impacts in the supply chain and
actions taken

No

No

MATERIAL ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-EN34

Number of grievances about environmental


impacts filed, addressed, and resolved through No grievances have been found in 2014.
formal grievance mechanisms

No
No

CATEGORY: SOCIAL
SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK
MATERIAL ASPECT: EMPLOYMENT
G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-LA1

Total number and rates of new employee hires


and employee turnover by age group, gender Human Resource Aspect
and region

No

G4-LA2

Benefits provided to full-time employees


that are not provided to temporary or partHuman Resource Aspect
time employees, by significant locations of
operation

No

G4-LA3

Return to work and retention rates after


Human Resource Aspect
parental leave, by gender

No

MATERIAL ASPECT: LABOR/MANAGEMENT RELATIONS


G4-DMA

Generic Disclosures on Management


Approach

Human Resource Aspect

No

G4-LA4

Minimum notice periods regarding operational


changes, including whether these are specified Human Resource Aspect
in collective agreements

No

217

Annual Report 2014

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

MATERIAL ASPECT: OCCUPATIONAL HEALTH AND SAFETY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-LA5

Percentage of total workforce represented


in formal joint management-worker health
and safety committees that help monitor and Not Reported
advise on occupational health and safety
programs

No

G4-LA6

Type of injury and rates of injury, occupational


diseases, lost days, and absenteeism, and total
Human Resource Aspect
number of work-related fatalities, by region
and by gender

No

G4-LA7

Workers with high incidence or high risk of


Human Resource Aspect
diseases related to their occupation

No

G4-LA8

Health and safety topics covered in formal


Not Applicable
agreements with trade unions

No

Human Resource Aspect

No

MATERIAL ASPECT: TRAINING AND EDUCATION


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-LA9

Average hours of training per year per


The participants are selected based on
employee by gender, and by employee
training need; regardless of gender
category

No

G4-LA10

Programs for skills management and


lifelong learning that support the continued
Human Resource Aspect
employability of employees and assist them in
managing career endings

No

G4-LA11

Percentage of employees receiving regular


performance and career development reviews, Human Resource Aspect
by gender and by employee category

No

Human Resource Aspect

No

MATERIAL ASPECT: DIVERSITY AND EQUAL OPPORTUNITY


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-LA12

Composition of governance bodies and


breakdown of employees per employee
category according to gender, age group, Human Resource Aspect
minority group membership, and other
indicators of diversity

No

MATERIAL ASPECT: EQUAL REMUNERATION FOR WOMEN AND MEN


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-LA13

Ratio of basic salary and remuneration of


women to men by employee category, by Human Resource Aspect
significant locations of operation

No

MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-LA14

Percentage of new suppliers that were


Human Resource Aspect
screened using labor practices criteria

No

G4-LA15

Significant actual and potential negative


impacts for labor practices in the supply chain Human Resource Aspect
and actions taken

No

MATERIAL ASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS


G4-DMA

Generic Disclosures on Management


Approach

Human Resource Aspect

No

G4-LA16

Number of grievances about labor practices


filed, addressed, and resolved through formal Human Resource Aspect
grievance mechanisms

No

SUB-CATEGORY: HUMAN RIGHTS


MATERIAL ASPECT: INVESTMENT
G4-DMA

218

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

G4-HR1

Total number and percentage of significant


investment agreements and contracts
Human Resource Aspect
that include human rights clauses or that
underwent human rights screening

No

G4-HR2

Total hours of employee training on human


rights policies or procedures concerning
aspects of human rights that are relevant Not Applicable
to operations, including the percentage of
employees trained

No

MATERIAL ASPECT: NON-DISCRIMINATION


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR3

Total number of incidents of discrimination


Human Resource Aspect
and corrective actions taken

No

MATERIAL ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR4

Operations and suppliers identified in which


the right to exercise freedom of association
and collective bargaining may be violated or at Human Resource Aspect
significant risk, and measures taken to support
these rights

No

MATERIAL ASPECT: CHILD LABOR


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR5

Operations and suppliers identified as having


significant risk for incidents of child labor, and
Human Resource Aspect
measures taken to contribute to the effective
abolition of child labor

No

MATERIAL ASPECT: FORCED OR COMPULSORY LABOR


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR6

Operations and suppliers identified as having


significant risk for incidents of forced or
compulsory labor, and measures to contribute Human Resource Aspect
to the elimination of all forms of forced or
compulsory labor

No

MATERIAL ASPECT: SECURITY PRACTICES


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR7

Percentage of security personnel trained in


the organization's human rights policies or Human Resource Aspect
procedures that are relevant to operations

No

MATERIAL ASPECT: INDIGENOUS RIGHTS


G4-DMA

Generic
Disclosures
Approach

on

Management

Not Applicable

No

G4-HR8

Total number of incidents of violations


involving rights of indigenous peoples and Not Applicable
actions taken

No

MATERIAL ASPECT: ASSESSMENT


G4-DMA

Generic
Disclosures
Approach

on

Management

Not Applicable

No

G4-HR9

Total number and percentage of operations


that have been subject to human rights Not Applicable
reviews or impact assessments

No

MATERIAL ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENT


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR10

Percentage of new suppliers that were


Human Resource Aspect
screened using human rights criteria

No

G4-HR11

Significant actual and potential negative


human rights impacts in the supply chain and Human Resource Aspect
actions taken

No

219

Annual Report 2014

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

MATERIAL ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS


G4-DMA

Generic
Disclosures
Approach

on

Management

Human Resource Aspect

No

G4-HR12

Number of grievances about human rights


impacts filed, addressed, and resolved through Human Resource Aspect
formal grievance mechanisms

No

SUB-CATEGORY: SOCIETY
MATERIAL ASPECT: LOCAL COMMUNITIES
G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO1

Percentage of operations with implemented


local community engagement, impact
assessments, and development programs

No

G4-SO2

Operations with significant actual and potential


negative impacts on local communities

No

No

MATERIAL ASPECT: ANTI-CORRUPTION


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO3

Total number and percentage of operations


asessed for risks related to corruption and the
significant risks identified

No

G4-SO4

Communication and training on


corruption policies and procedures

No

G4-SO5

Confirmed incidents of corruption and actions


taken

anti-

No

No

MATERIAL ASPECT: PUBLIC POLICY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO6

Total value of political contributions by country No political contributions have been made by
and recipient/beneficiary
PBL in 2014.

No
No

MATERIAL ASPECT: ANTI-COMPETITIVE BEHAVIOR


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO7

Total number of legal actions for antiNo legal actions have been filed regarding this
competitive behavior, anti-trust, and monopoly
issue.
practices and their outcomes

No
No

MATERIAL ASPECT: COMPLIANCE


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO8

Monetary value of significant fines and total


number of non-monetary sanctions for non- No fines or sanctions have been filed in 2014.
compliance with laws and regulations

No
No

MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO9

Percentage of new suppliers that were


screened using criteria for impacts on society

No

G4-SO10

Significant actual and potential negative


impacts on society in the supply chain and
actions taken

No

No

MATERIAL ASPECT: GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-SO11

Number of grievances about impacts on


society filed, addressed, and resolved through No grievances have been found in 2014.
formal grievance mechanisms

No
No

SUB-CATEGORY: PRODUCT RESPONSIBILITY


MATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY
G4-DMA

220

Generic
Disclosures
Approach

on

Management

No

General Standard
Disclosures

Standard Disclosure Title

Page Number

External
Assurance

G4-PR1

Percentage of significant product and service


categories for which health and safety impacts
are assessed for improvement

No

G4-PR2

Total number of incidents of non-compliance


with regulations and voluntary codes
concerning the health and safety impacts of Not Applicable for Financial Institutions.
products and services during their life cycle,
by type of outcomes

No

MATERIAL ASPECT: PRODUCT AND SERVICE LABELING


G4-DMA

Generic
Disclosures
Approach

G4-PR3

Type of product and service information


required by the organization's procedures for
product and service information and labeling,
and percentage of significant product and
service categories subject to such information
requirements

No

G4-PR4

Total number of incidents of non-compliance


with regulations and voluntary codes
No such incident has occurred in 2014.
concerning product and service information
and labeling, by type of outcomes

No

G4-PR5

Results of
satisfaction

No

surveys

on

Management

measuring

customer

No

Product Responsibility

MATERIAL ASPECT: MARKETING COMMUNICATIONS


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-PR6

Sale of banned or disputed products

No

G4-PR7

Total number of incidents of non-compliance


with regulations and voluntary codes
concerning
marketing
communications, No such incident has occurred in 2014.
including
advertising,
promotion,
and
sponsorship, by type of outcomes

No

No

MATERIAL ASPECT: CUSTOMER PRIVACY


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-PR8

Total number of substantiated complaints There have been no complaints regarding


regarding breaches of customer privacy and customer privacy and losses of customer data
losses of customer data
in 2014.

No
No

MATERIAL ASPECT: COMPLIANCE


G4-DMA

Generic
Disclosures
Approach

on

Management

G4-PR9

Monetary value of significant fines for noncompliance with laws and regulations No fines regarding products and services have
concerning the provision and use of products been filed in 2014.
and services

No

No

221

Annual Report 2014

OUR ACHIEVEMENT FOR THE SUSTAINABILITY


REPORT 2013

222

223

Annual Report 2014

Prime Bank
Foundation
CEOs Note
Prime Bank Foundation (PBF), together with its
partnering organisations, works to develop unique
programmes that deliver tangible and lasting results in
the communities we work in.
Corporate Social Responsibility (CSR) is a long-term
approach to business that addresses the needs
of communities, people and their employers. CSR
provides frameworks for successful enterprises that are
harmonious with their surroundings. CSR also provides
an opportunity to generate honest, authentic goodnews stories that a business and its community can
be proud of. We believe that CSR must be sustainable
and be a fundamental part of our business regardless
of changing fortunes. Through health and education
programmes we help the Foundation connect with local
communities in a way that no one else can.
When it comes to CSR, there are no easy answers on
what to do or how to do it. A companys interactions and
interdependencies with society are many and complex.
However, it is clear that approaching CSR as a feelgood or quick-fix exercise runs the risk of missing huge
opportunities for both the business and society. Taking
a step-by-step approach offers us a way to identify
and drive mutual value creation. It requires greater
focus, work, and long-term commitment than do many
standard CSR pet projects, philanthropic activities, and
propaganda campaigns, but the rewards are potentially
much greater for both sides.
PBFs undying commitment to incubating innovative
approaches to address some of Bangladeshs
seemingly intractable problems has endured the test
of time and created measurable impact for thousands
of Bangladeshis. Throughout our journey, we have
continually adapted our approach from venture
philanthropy to effective programme and service
delivery through partnership, knowledge sharing,
and skill development. Our programme approach has
enabled PBF to evolve a path of growth and gracefully
handle transitions while maintaining a razor-sharp
focus on our mission to catalyse impactful social and
in Bangladesh.
economic

224

Dr. Iqbal Anwar


CEO, Prime Bank Foundation

Every moment, everything in the universe changes,


whether we are aware of it or not
is the most
important aspect in the world. Especially living beings
like us change mentally, physically, intellectually, etc.
Change makes life go forward. What is there in a life
where there is no change? But we should ensure that
whatever change takes place, it should be for the better,
not otherwise.
Precious few of us imagine that we may change the
world through our jobs. We may be good at what we do
but not many of us have the opportunity to be involved
in a work which makes a positive impact in the lives of
others. There is now a growing realisation that what we
do at work - and what our business does in its day to day
pursuit of prosperity - makes a real impact on society.
At the Prime Bank Foundation, we are focusing on
where we can make the greatest difference. PBF gives
our beneficiary a positive boost to begin their journey
with us, launching them into the time of feeling good
and having a safe journey with PBF with enthusiasm
for the opportunities they know are out there. In the
journey with PBF, they start experiencing the feeling
of motivational inspiration needed to refresh their goal

in life and to check their To Do list and as such, they


are on their way, with direction, focus, purpose and
enthusiasm to make a difference in life. This is how our
life changing programme support for our beneficiary
gets them off to a flying start. They realise that their
lives have transformed from a black and white sketch
into a full color painting not because it changed, but
because their awareness and daily living skills changed.
They notice so much more of this incredible life they
are having; this experience of being alive is now fully
available to them, in rich, vibrant colours and high
fidelity sound. This is a time for reflection on their lives,
and celebration of their successes and achievements.
It is an opportunity to make a huge contribution to the
lives of our priority target groups who are experiencing
educational under-achievements, a high level of
deprivation and whose futures are genuinely at risk.
We continue to work toward our goal of providing
significant funding for the purpose of advancing eye
care in our community through assisting and supporting
Prime Bank Eye Hospital patients, purchasing facilities
and technology at our eye hospital, and providing eye
health education for our staff and community. I am
very proud of our Foundation Management Committee
which is becoming more and more adept at leveraging
our capacity and strategising successful and impactful
initiatives. We are making immense strides, and our
potential for growth is enormous!
We are ambitious about the future, we have a vision,
we look for the unexpected, we inspire and we push
boundaries to make things happen. We are a team of
professionals inspired to do more and determined to
succeed.
Philanthropy and charitable gifts are becoming more and
more important to non-profit organisations everywhere,
and Prime Bank Foundation is no exception. Revenue
from care and service provided does not allow a margin
to cover the costs of uncompensated care, equipment
and technology purchases, and the necessities and
improvements that are vital to the provision of quality
care. Serving as CEO of the Prime Bank Foundation
has been my privilege and an honour. The generosity
of Prime Bank Limited, the major contributor of funds
to PBF has allowed us to continue our support for our
health, education and other programmes including
sports in 2014. I am continually impressed with the
quality and scope of care available in our health and
education programmes for our priority target groups.
The Foundation will continue to work hard at spreading
the word about what a fantastic service delivery we

have in our long term supply side financing health and


education projects, namely: Prime Bank Eye Hospital,
Prime Bank English Medium School and Prime Bank
Nursing Institute. Please take a look at our report and
find out what we have been able to accomplish this year.
So many lives have been touched by the terrific projects
we have been proud to implement. We are committed
to expanding our efforts to touch even more lives in the
years to come.
To be writing the CEOs Report on the CSR component
for the 2014 Annual Report of Prime Bank Limited is a
privilege personally and professionally, since it provides
the opportunity to reflect on the significant responsibility
that the Foundation carries.
As I reflect on PBFs accomplishments for 2014, I want to
share a favourite analogy of mine. I want you to picture
a watch with the hands pointing to the time. When you
look at those hands, there is so much more to think of
than just what time it is. The hands are simply the visible
components that everyone sees, out front telling the
story. But without all the gears and key components
in the back working in perfect synergy, there would be
no story to tell. So, instead of my normal state of the
Foundation comments, I want to simply thank the many
people who are behind the scenes shaping PBFs story!
As you review our 2014 Annual Report, you will read about
many of the programmes and services we provide. While
this work is extremely important, it simply cannot be
accomplished without the people who make it happen.
I am personally very grateful to each person who has
helped the Foundation with its outreach programmes.
You are the ones who made our story happen. And its
all thanks to you-our CSR projects implementing teams,
partners and FMC for caring about others!
Before I conclude, I extend my kind thanks to you all for
taking the time to review our activities this year and for
sharing with us a sense of optimism for what we make
possible. As this report reveals, we hope to continue to
make important and exciting changes and look forward
to updating you on further progress in the years to
come.
Sincerely yours,

Dr. Iqbal Anwar


Chief Executive Officer
Prime Bank Foundation

225

Annual Report 2014

PBF Projects in Brief


Prime Bank Foundation (PBF) is a staunch believer of empowerment rather than aid. That is why the foundation has undertaken
a variety of projects in education, health and other sectors of the country with the objective of removing access barriers which
the marginalised sectors of the society face. We are proud to say that our programmes have made a phenomenal difference in
the lives that they have touched. PBF hopes to expand its sphere of influence and provide more opportunities of better health
and education in order to ensure equal opportunities for the less privileged people of our society.
Over the past eight years, PBF has relentlessly pursued a range of
activities with the sole purpose of benefitting its target people. The
foundation has invested its resources in initiatives which will
the future of many. It has opened new doorways to better health
and education-opportunities which were only dreams for countless
people.

Education Support Programme (ESP)

Countless underprivileged, yet meritorious students fail to pursue


higher studies due to poverty, the ESP project is designed to
support such students through a long term renewable scholarship
programme. Over the last few years, the number of students who
have become established and employed due to the ESP has been
overwhelming.

ESP

Prime Bank English Medium School (PBEMS)

This English medium school provides quality English education at a


minimum cost as well as a holistic syllabus which equips the students
to tackle and comprehend the world. The schools popularity and
demand has led to the existence of a total of two branches in Dhaka
city.

PBEMS

Prime Bank Nursing Institute (PBNI)

Considering the dire need of a large number of qualified nurses,


PBNI began its journey in affiliation with a leading nursing institute
of Philippines. The modern equipments, IT facilities and qualified
teachers all follow international standards which prepare the
students to pursue a noble career. The institute aims not only to
increase employment but also to contribute to the health sector of
the country.

PBNI

Prime Bank Eye Hospital (PBEH)

Ophthalmic health is often ignored, but is integral for overall


wellbeing. PBEH has a highly trained team of consultants and staff,
and international standard equipments and operation theatres to
provide excellent eye-care services at a minimum cost. PBEH also
carries out screening camps, and free eye camps throughout the
country, especially in remote areas to reach out to eye patients. The
hospital has also adopted several awareness-raising campaigns to
promote health-seeking behaviour.

Prime Bank Cricket Club (PBCC)

PBEH

The PBCC is a platform for young athletes to gain professional


experience through the game as well as from the seasoned players
who are also part of the team. PBCC provides excellent logistical
support, a professional and systematic approach and best practices
which set it apart and highlights its exceptional standards.

Other Activities

Along with the ongoing projects, Prime Bank Foundation is actively


involved in countless activities which are undertaken to support
emergency needs of the country.

226

PBCC

Prime Bank
Foundations CSR
Prime Bank Foundation (PBF) has been working
relentlessly since 2007 in the Corporate Social
Responsibility (CSR) sector as a responsible corporate
citizen. While providing support to the disadvantaged
people of the country is a core focus, the larger
goal of the Foundation is to push forward a broader
process of change in order to ensure meaningful and
lasting progress. PBF envisions a country where no
one is deprived of their basic needs and rights, where
everyone can live with dignity and has the opportunity
to fulfill their potential. In order to realise this vision,
the Foundation has taken initiatives to remove barriers
to accessing essential services, as well as to foster an
enabling environment for the marginalised to support
their capacity to uplift themselves and
their lives
for the better.
On March 04, 2014 Prime Bank Foundation was awarded
the prestigious Asia Responsible Entrepreneurship
Awards (AREA) 2014 for its exemplary contribution in
corporate social responsibility under the category of
Health Promotion. Dr. Iqbal Anwar, Chief Executive
Officer, Prime Bank Foundation was invited to the official
awards ceremony at JW Marriott, New Delhi, India to
receive the award.
Enterprise Asias Asia Responsible Entrepreneurship
Awards (AREA) recognises and honours Asian
businesses for championing sustainable and responsible
entrepreneurship in the following categories: Green
Leadership, Investment in People, Health Promotion,
Social Empowerment, SME, CSR and Responsible
Business Leadership. The awardees must demonstrate
their commitment, advocacy, integrity and leadership
in incorporating responsible and ethical values in their
businesses. This award itself speaks volumes about the
considerable role that PBF is playing in the CSR sector
of the country. Gaining international recognition for
its commendable eye-care initiative in the form of the
Prime Bank Eye Hospital has established the fact that
PBF is truly a
maker and is committed to sustainable
and responsible practices. In a developing country
like Bangladesh where there is great potential but
enormous deprivation, millions of people live below the
poverty line and lack access to fundamental services.
PBF recognises the talents, capabilities and potential of
those it serves, and believes that the underprivileged can
be the agents of their own advancement. Based on this
conviction, the Foundation emphasises empowerment
more than aid, and designs all its activities to address

Dr. Iqbal Anwar, CEO, PBF (right) receiving AREA award

both immediate needs as well as a longer term, more


widespread development vision.
As we enter yet another year, we can look back and
reflect on the considerable
and improvement that
PBF has made in the lives of many marginalised families.
Educational, health, and socio-cultural development
are the main areas of focus of PBF. Since its inception,
the Foundation has been undertaking innovative
programmes to promote development in these areas
and reach out to those unable to afford such services.
Some of PBFs core ongoing programmes include
the Education Support Programme (ESP), designed
to support higher education, the Prime Bank English
Medium School (PBEMS) initiative, for the development
of a new model for primary & secondary education, the
Prime Bank Eye Hospital (PBEH), intended to provide
direct healthcare at minimal cost and the Prime Bank
Nursing Institute (PBNI) which offers Diploma in Nursing
and Midwifery at a comparatively affordable rate.
As the next few pages will show, PBF is focused on
real and measurable results, and always maintains a
pragmatic stance. The Foundations activities have
produced compelling results, turning out many
inspiring stories of success and overcoming adversity.
The outcomes of these activities have been shared as
well. PBF is an agent of positive
which illuminates
the way for countless people whose lives were darkened
by unfavourable circumstances. As always, PBF will
continue broadening the scope of its impact through its
groundbreaking social programmes. It is continuously
exploring methods of extending the reach and
effectiveness of its endeavours in order to fulfill its long
term vision of a better and more equitable Bangladesh.

227

Annual Report 2014

Education
Education Support Programme (ESP)

Dr. Atiur Rahman, Governor, Bangladesh Bank giving a speech as the


Chief Guest

deserving students to pursue higher studies (graduation


and post-graduation) by ensuring a much needed, long
term but renewable scholarship programme.
This unique programme was launched in 2007 to
remove the access barriers faced by many deserving
yet destitute students. 2014 marks the 8th year of the
programme where another 401 underprivileged but

2014 mvj mevP msLK 401 Rbmn


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dvDkb wkvew c`vb KiQ

Without education, an entire nation can become


paralysed. Education is an essential component for
human development and empowerment this is the
core belief behind Prime Bank Foundations (PBF)
Education Support Programme (ESP).
The youth of Bangladesh can reach great heights if they
are equipped with essential academic qualifications. This
has been proved year after year through the professional
and academic success achieved by the recipients
of the scholarship under ESP. That is why Prime Bank
Foundation vigorously pursues its ESP which provides
a ray of hope to thousands of underprivileged yet
meritorious students to
their plight. The ESP allows

228

meritorious students were awarded stipends. This figure


represents the highest number of recipients in one year
since ESPs inception.
This year, like every year, the selected students
attended an award giving ceremony where renowned
personalities like Prof. Abdullah Abu Sayeed, Prof.
Jamilur Reza Choudhury, Father Benjamin Costa and
Barrister Rafique-ul Huq as well as others were present.
The ceremony was held on September 21, 2014 at
LGED Auditorium (Level-2), LGED Bhaban, Agargaon,
Sher-EBangla Nagar, Dhaka-1207. To encourage and
congratulate these brilliant students from all over the
country, Prof. Abu Sayeed made a speech in which
he stated the importance of pursuing ones dreams
despite adversities. He also emphasised that if someone
remains sincere about achieving their target, they will
definitely succeed.
The highlight of the ceremony was the handing over
of the first installment of the scholarship to each of
the selected student through an electronic medium.
This was the first time that students received their first
installment through the Automation method. It took only
one click to disburse the first installment simultaneously
to all the bank accounts of the students selected in
2014. Dr. Atiur Rahman, the Chief Guest and Honourable
Governor of Bangladesh Bank, initiated the Automation
process.
The selected students will be provided with a monthly
stipend of Tk. 2,400 for completing their graduation
and post graduation level studies in the countrys
public universities, medical colleges/engineering and
agriculture universities. Thus, the ESP ensures a reliable
financial support for students who feared that they
might have to sacrifice their education due to economic
hardships.
With the inclusion of these students, the total number of
poor but meritorious students who are the recipients of
Prime Bank Foundation stipends now stands at 2,072.
For awarding stipends in 2014, the same process of the
previous years was followed: applications were invited
from extremely poor but meritorious students through
advertisements in the countrys leading national
dailies and potential candidates were selected by the
Foundations Advisory Committee.
The Foundation continues without fail, to acknowledge
the contributions made by its Advisory Committee,
which was constituted in 2007 for selecting awardees.
The Advisory Committee consists of three distinguished
personalities of Bangladesh, namely Prof. M. Q. K.
Talukder, Chairman, Centre for Women and Child

Health and Chairperson, Bangladesh Breast Feeding


Foundation (Chairperson of the Advisory Committee),
Prof. Jamilur Reza Choudhury, Educationalist (member
of the Advisory Committee) and Father Benjamin Costa,
Educationalist (member of the Advisory Committee).
PBF maintains a database which has been constructed
to preserve all relevant information of the applications
based on which the compilation sheet is generated
which is then provided to the Advisory Committee of
PBF for its ESP. The Advisory Committee then develops
a set of criteria for the selection and recommendation
of the most deserving students. After the Advisory
Committee set the minimum combined CGPA marks
which will make the stipend candidate eligible, the PBF
Officers individually conduct a one-to-one Validation
Exercise (VE) on the primarily selected applicants.
Through this process PBF Officers validate their
infromation, academic papers, economic hardship
and how derserving each student is, including other
sources of income along with the applicants dire
necessity.
The ESP follows strict guidelines where gender equality
is concerned; the female to male ratio of 3:7 must be
maintained to ensure that a sufficient number of both
genders receive assistance.
Considering the huge number of applicants, one of the
major challenges of the whole process is to select the
most deserving students. Yet PBF has been pursuing, its
target of providing helpless students the chance to
their misfortune and shape their future in a steadfast
manner.
In keeping with this years theme, the next portions of the
report will portray to what extent this unique initiative of
PBF has changed young lives.
Many of the recipients of the PBF stipend have
completed their education and are now established
doctors, engineers, teachers of universities/colleges,
employed in the BCS, bankers or involved in the nongovernmental sector. They have improved not only their
own lives, but also their families lifestyle and status.
They are contributing to the benefit of the society and
are examples of what hard work and dedication can
achieve. Many of these established individuals have
expressed their gratitude to Prime Bank Foundation
for the significant role it played in helping them to fulfill
their dreams when they had lost all hope. Prime Bank/
PBFs contribution towards the betterment of thousands
of financially challenged students lives as well as their
families future is and will always be regarded as a highly
commendable activity.

229

Annual Report 2014

Following are some stories of such individuals whose lives have completely changed because of
Prime Bank Foundations stipends:

Kvwnbx - 1

Rashida Sultana:
The small house in Balyani, Pabna was the only asset of
Rashida Sultana and her family of five, which included
her parents and two brothers. Her father was a fourth
class employee at Narsingdis USC Jute Mills. Simply
fulfilling his familys daily needs seemed impossible at
times, it is needless to say that supporting his childrens
education was clearly a massive challenge!!

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Kvwnbx - 2

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Rashida Sultanas Life Now:


Rashida Sultana was selected for the PBF stipend in
2007, laying the foundation for a brighter future. She
expressed her gratitude to PBF thus: Not only did
PBFs scholarship help me tremendously, I earnestly
believe PBF was a guide as well as a guardian. A status
report regarding the academic performance must be
sent every 3 months-this encouraged me to maintain
good grades. I believe this process helps the recipients
to maintain good results as well as provide a steady
economic support. This stipend has made the struggle
to pursue higher studies bearable for many desperate
students like me. Today I am a Medical Officer at Birol
Upazillas Health Complex, my profession has brought a
massive improvement in my family. The crucial role that
PBF played in my life will never be forgotten. My prayers
and best wishes will always be with the people involved
with PBF.

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230

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Golam Sarowar:
Golam Sarowars father was an ordinary sharecropper
for whom even managing the daily costs was a burden.
Golam Sarowar did not even have a good set of clothes
after managing to gain admission at the prestigious
University of Dhaka. As a student, there were days
when arranging even two square meals a day had been
impossible for him.
Studying in a university is only a distant dream for
students who come from families like mine. Considering
the difficulty my father was facing to support our family,
my decision to study in the university was similar to
committing suicide. There was simply no way my
family could help me bear the costs of studying in the
University of Dhaka. I have no idea what my fate would
have been if I hadnt been selected for the stipend from
PBF that year, but I am quite certain that my dream of
having a job like this would have remained just a dream!
After Employment:
Today, my family no longer suffers from crippling
poverty, the days of hardship are now over and we have
gradually risen in the eyes of our society. Our status
has improved, people of different classes now consult
with my father regarding their problems. The man
who was once regarded as a destitute person is now
respected among all the levels of society in our area.
These changes began when I started receiving the
stipend, that is why I am forever grateful to PBF. Prime
Bank has undertaken a highly commendable initiative
which will help not only extremely needy students but
their helpless families as well.

Kvwnbx - 3

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bvRgv Rvweb, mnKvix Kwgkbvi, Kvg

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Najma Jabin:
Every single recipient of PBFs scholarship is extremely
meritorious and in dire need of financial assistance. PBF
tries to make the rocky road of higher education slightly
bearable for such students; Najma Jabin was one such
student.
Najma Jabin became a recipient of the PBF stipend from
2008 and completed her graduation & post-graduation
in English Literature with distinction marks from the
University of Dhaka. I have no hesitancy in saying
that PBF has assisted me considerably in reaching the
position that I am in now, said Najma Jabin, now a proud
BCS Customs Officer. I consider PBF as one of my best
guardians. My frustration and tension began decreasing
ever since I received the stipend and my result also
significantly improved from there on. I became a selfconfident person who had received the opportunity to
pursue her dream. Even today I mention PBFs unique
programme to everyone and the immense role it has
played in my life. I will truly be grateful if I ever have the
chance to be of any assistance to PBF.

231

Annual Report 2014

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Kvwnbx - 4

There are many students who are not fortunate enough to have a proper meal or a good set of
clothes, yet they fight and overcome such obstacles in their desperation for better education.
Following are the stories of some such students.

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`p cZqx RyjwdKvi kZ AfveI `g hvqwb:

Despite Countless Obstacles, Zulfikar Could Not be Held Back:

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Zvi Dci cvivjvBwmm GK cv Lywoq nuvU|

Zulfikar Ali Nawab hails from the village of Bakunda in Thakurgaon.


His family consists of three sisters and his parents. Apart from a
small piece of land and a small hut, they have no other belongings.
Despite being uneducated, his family was well aware of the
importance of education; yet supporting Zulfikar was a painstaking
ordeal for them. His father Md. Mujibur Rahman is affected by
paralysis and age-related complications, but still continues to limp
and toil away daily in order to support his family.

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232

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The small piece of land they owned had to be sold to cover


the expenses of his two elder sisters marriages. Since both
his sisters are also struggling to make ends meet, they cannot
share the familys financial burden. Zulfikars younger sister
gives private tuition to students of the area to help pay some of
Zulfikars expenses.
Since Zulfikar was a meritorious student, the villagers would
help him occasionally by giving him zakat or fitra. Despite his
hardships, nothing could prevent Zulfikar from steadfastly
pursuing his studies; consequently he achieved Golden A+ in
both his SSC and HSC and managed to be selected in Rajshahi
Medical College. In order to pay the admission fees, he had to
sell the two cows his mother was raising. Breaking down into
tears, his mother recalled all the backbreaking labour she had to
do for her sons education. She had to resort to digging, breaking
bricks, thrashing rice and any other odd jobs which would give
her some money, however trivial. She has been depending on
the rags that people would give her to wear and cannot recall the
last time she wore new clothes. This is a family which was not
fortunate enough to eat meat or fish even once a year. They had
to rely on the edible vegetations/weeds growing on roadsides
which were the only thing they could get for free. Despite severe
gastric pain, Zulfikars mother never bought a medicine worth Tk.
10 for fear of wasting money.
Ever since Zulfikar gained admission in Rajshahi Medical College,
her new fear was how to cope with the high education costs

of studying in the city. Tension and anxiety has made her weak
and ill; desperate to support her sons education, she borrowed
money from whoever was willing to lend some and somehow
managed the costs for a few months. Yet the future had become
dreary since borrowing until the completion of Zulfikars studies
was not a feasible option.
However, after Zulfikar started recieving the PBF stipend, his
mother has had some relief. Without this financial support, she
might have had to ultimately sell the small hut they own. Every
time she prays, she thanks Almighty Allah for this immense
blessing and begged the authorities to continue the stipend
which has been a life-saver for her son.

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ej ZvK| Aekl ewwU cj Rvevq`yj Bmjvg| Gidj Zvi
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evsK Gi mvBbevW `wL Mfxi kvq ZvwKq _vwK, PvL Rj
Gm hvq|
Wherever I See a Signboard of Prime Bank, I Regard it
With Immense Respect
Omor Ali lived in the char village of Putimari Kajaldanga
in Chilmari, Kurigram with his family. His family owns a
small shack and he used to support his family by working

Kvwnbx - 5

as a day-labourer. However, after Omor Alis death in


2005 a painful struggle began for his already struggling
family, especially his meritorious son, Jobaidul Islam.
Even on the day before his SSC exam, when all other
students were busy with last minute revisions, Jobaidul
Islam worked as a day-labourer. He has also had to
work as a saw mill labourer, helper of mason and a road
constructor to support his family. Despite his hardships,
he managed to receive Golden A+ in his SSC. With the

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fund raised by his school teachers he got admitted for his


HSC; however, fearing that he would not be able to cope
with the studies of the Science division, considering the
fact that he had to work as a day-labourer in his free
time to support his family, he shifted to the Humanities
Group.
Jobaiduls father passed away on the day before his HSC
exam. Despite such an emotional blow, he succeeded
in getting a Golden A+ in his HSC as well. He fulfilled his
dream of studying in a university and gained admission
in the Social Science department of Rajshahi University.
Although a classmate somehow helped him with his
expenditures after joining university, he had to go back
to his village in search of some source of income. He
started working as a day labourer on alternate months
and attended classes in between. This , however, led to
a drastic decrease in his class attendance which was
very alarming.
That is when he learned about PBFs ESP advertisement
from a friend. After being selected as a recipient of the
stipend the uncertainty in Jobaiduls life significantly
decreased, so have his hardships. That is why every time
he comes across a signboard of Prime Bank, he regards
it with immense respect for the significant role it has
played in his life.

233

Kvwnbx - 6

Annual Report 2014

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GB ewUv Avgvi Rxebi gvo Nywiq w`qQ :

This Scholarship has Been a Turning Point in My Life

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ej hvb bvRbxb bvnvi|

At one point, begging on the streets had become an impending


possibility for Mosammet Naznin Nahar and her family. Naznin
belongs to a poverty-stricken family of Nilphamari. After her
father passed away due to a heart attack in 2005, their financial
situation went from bad to worse. Their only belonging was the
ramshackle hut made of mud, wood and bits of tin. After her
fathers death her mother started working in a rice mill where
her grandmother and aunts also worked. None of her relatives
were in a position to provide any kind of financial help to her
family since everyone faced the same hardships.

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234

bvRbxb bvnvii gv, vbxq GKwU avbi Kji kwgKv

Naznin Nahars younger sister works as a maid in someones


house and her younger brother can no longer go to school as
he has only torn rags to wear and a uniform is beyond their
means.
Arranging sufficient food for her family is a daily challenge since
her mothers salary from the rice mill is meager compared to
their needs. Having a proper meal with fish or any other protein
is only a dream for this family which sometimes survives on
nothing.
Despite all these hurdles, Naznin Nahar managed to secure
Golden A+ in her SSC and become the centre of discussion
in her area.
Even though she wanted to, she did not dare to apply to any
college located in the town for admission. With the help of her
school teacher she got admitted in Syedpur Local Kamar Pukur
College and achieved a Golden A+ in her HSC as well.
Due to her excellent result and keen desire to pursue her
studies, her mother sold her cow, their only other asset to meet
the costs of admission to Rangpur Carmichael College. Fearing
the costs, she did not apply anywhere better.
At one point, meeting the expenditures of Rangpur Carmichael
College was becoming impossible. Unable to move forward
due to financial constraints, Naznin was seriously considering
stopping her studies. That is when a life changing event
occurred - she was selected as a recipient of the PBF
scholarship.
Naznin now dreams of studying in a university, she has been
selected at Haji Mohammad Danesh Science and Technology
University. She has even restarted her younger brothers school.
Naznins mother expressed her heartfelt gratitude to PBF for
helping her daughter to continue her studies. Their situation
had become so dire that she had been thinking she might have
to send Naznin to work in a garments factory to help support
the family. But that is no longer an option, thanks to PBF.

Why ESP of PBF is Unique :

Every year in the month of April we publish advertisements in two of the highly circulated daily
newspapers in the country.

Prerequisites for eligibility are mentioned in the advertisement like GPA, necessary papers, parents
income, place and date of submission, etc.

Application forms, newspaper advertisements and the list of preliminary and finally selected awardees
are uploaded in the foundations website.

The applicant gets one months time to submit applications, then all applications are checked manually
to detect any error against the prerequisites after which the data entry of valid applications begins.

A strong database is being used which helps to sort out applications according to division/district/
upazilla/gender/science/humanities/commerce/any special group/CGPA/parents income etc.

In the database a lot of personal information such as the students name, parents name, address,
account number and branch, how many students passed out, completed graduation, dropped out,
current awardees, academic status, outstanding performance, subject, institution, etc. are preserved

Any wrong information can also be checked through the database.

PBF conducts one to one Validation Exercise as per the guidelines set by the Advisory Committee.

The Validation Exercise is a process to identify the most deserving and appropriate applicants by on site
and off site interviews of the primarily selected candidates in the branch of PBL nearest their residence
and at their institutions.

Through this (VE) process project officers validate their information, academic papers, economical
hardships, other sources of income and appetite for the stipend of applicants.

Annual service charge of bank account (not ATM) of the awardees is waived

After successful completion of their higher studies PBF helps the awardees to avail internships and
apply for jobs in PBL and PBF

Following are Depictions of the Daily Ordeals that the families of Some Recipients of the PBF Stipend Face:

The mother and grandmother of scholarship recipient,


Md. Najmul Islam cry as they describe their daily hardships

The father of a student of Rangpur Medical College works


as a labourer

This aged man works as a bidi maker, he is the father of a


student of Bangladesh Agriculture University

Fahima Milis father continues to support his family by


working in a tea stall

235

Annual Report 2014

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236

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Prime Bank English Medium School (PBEMS)


PBEMS Prepares Pupils for Lifelong Learning
Being the new principal of Prime Bank English Medium
School (PBEMS), we started the school-year in August
2014 with a series of training-workshops for the teachers
on the Methods of Teaching. Having studied education
and being a licensed teacher in the Philippines, it is
my desire to enhance our teachers skills by making
them understand the basic concepts and practices of
education since most of our teachers have studied in
different fields.
I am glad to mention that a huge number of students
have enrolled in our two branches (in Mirpur and Uttara)
and more are expected to be admitted in the upcoming
year. In the Mirpur campus, the student population
has doubled, while in Uttara, enrolment has increased
by thirty percent (30%). PBEMS will be glad to serve
more and more students in the future, that is why we
are planning to introduce morning and day shifts at the
Uttara campus to facilitate the increasing number of
students.
This year, a monthly general faculty meeting was held
regularly apart from the class level cluster monthly
meetings. Doing so will ensure that the needs and issues
of each student will be addressed and the teachers will
have a forum to raise issues of concern.
Flag-raising ceremony and singing of the national
anthem also commenced this school year. One of the
schools aims is to develop each student to become a
good citizen of the country; singing the national anthem
is a simple yet important endeavour to develop the
students respect and love for their country.
Aside from field trips, classes went on educational
exposure trips. Class 6, for instance, visited the Pan Pacific
Sonargaon Hotel for the US Trade Fair and a tour of the
hotel. This trip was related to their Geography and History
classes. It was also intended to develop their social skills.
When Class 5s Science lesson was about the parts of
the human body, they visited the anatomy laboratory of
Prime Bank Nursing Institute (PBNI). Class 4 also visited
PBNIs nutrition laboratory when they tackled nutrition in
Science class. Such learning experiences deepened the
understanding of the topics because they became more
meaningful to the students.
Teachers were also encouraged to attend educational
trips. We provided them with a schedule of activities
in the city such as exhibits, concerts, literary fairs, etc.

Mr. Blas Ofelie S. Descallar, Principal, PBEMS

The more the teachers are exposed to such activities,


the more their horizons will widen. The more they are
inspired, the more interactive and engaged their lessons
will become.
As PBEMS is concerned about the safety and protection
of students, teachers, and staff, we held fire and
earthquake drills during the first semester. Despite
the difficulty in organising this event, courage and
determination won over, and the drills were finally staged
on October 13, 2014 to commemorate the International
Day for Disaster Reduction in collaboration with the Fire
Service and Civil Defense Ministry. The activity aimed
to prepare everyone on what to do when unforeseen
disasters such as fires and earthquakes arise.
We also celebrated Universal Childrens Day for the first
time this year on November 20 through a presentation
of the students talents, a debate for Classes 5 and 6,
and a movie date for parents and children. Before the
movies, the parents were advised on how to select
appropriate shows for children and to screen cartoon
shows before letting their children watch. Parents were
made to understand that many children learn violent acts
through watching cartoons with violent and offensive
scenes. After the show, the parents were encouraged
to discuss the movie with their children, particularly the
values depicted there and how the children can apply
them.
A health programme was introduced this school year.
Students from Prime Bank Nursing Institute taught our
students the proper ways to take care of the body and
how to live a healthy life.

237

Annual Report 2014


participants from 32 countries. The conference theme
was Inspiring Teaching, Inspiring Learning. Discussions
were focused on the attributes of a Cambridge teacher:
being confident, reflective, responsible, innovative, and
engaged. While listening to the keynote speeches and
workshop discussions, I realised that what Cambridge
is espousing is actually not new to PBEMS. Our school
has long been working hard to inculcate and develop
these attributes in our teachers, and in various activities
of the school.

An official from Fire Service & Civil Defence staged a Drill for Fire &
Earthquake at PBEMS premises

Counseling not only to students but to teachers and


parents is also underway from this year. Guidance and
counseling is an integral part of every school in most
parts of the world so we are integrating it as we are
striving hard to set international standards.
To inspire our teachers in their profession, we also
arranged a one-day retreat at a serene location in
Gazipur District. The first activity that day was a selfreflection on their motives and purpose for teaching.
Here, they discovered why they want to teach and their
decision to teach was reinforced. They also reflected on
how they can improve as teachers. After the individual
reflections and small group sharing, the teachers
watched an inspirational Chinese movie entitled Not
One Less.
We also organised a training-workshop for our support
staff to help enhance their ability to care for our students.
I am hoping that all the pupils will benefit to the fullest
from all the endeavours that the school is undertaking
this year and in the coming years.
Recently I attended the Cambridge Schools
Conference in Colombo, Sri Lanka with more than 300

In one of the series of training sessions I conducted


for the school teachers, one teacher asked me which
method of learning would be of great help in preparing
students for the O and A level examinations. During
that time, we were discussing the differences between
two types of learning: the traditional and the progressive
(interactive methods). Prime Bank English Medium
School adopted the later while most, if not all, schools in
the country used the traditional method.
All the class activities are done in an interactive
way, which have been adopted by PBEMS since its
inception in 2008. This prepares the pupils adequately
for the O and A level exams. The recent additional
activities and practices have made PBEMS more in
tune with Cambridges goal of developing teachers
who are confident, reflective, responsible, innovative,
and engaged. Despite the challenges and limitations
faced by PBEMS in employing a high and international
standard of education, PBEMS is determined to strive in
preparing pupils not only for the O and A level exams
but most importantly, for lifelong learning so that they
excel wherever they may be and in whatever profession
they will take up in the future.

Blas Ofelie S. Descallar


Principal

Prime Bank English Medium School - We care


Prime Bank English Medium School (PBEMS) is an
ideal institution to form a child into a shape which is fit
for serving the nation in the future. It is an institution,
where we encourage a child to be an architect of his
own life, to serve the country properly in the future
and to be a responsible adult. The school follows the
Interactive Learning Method which includes the process
of interacting, where the students act and learn very

238

spontaneously, not according to a fixed syllabus. All


the students have the opportunities to act freely, they
have the room to show their talent and flourish. The
school follows a holistic approach-it means we make
the students work physically, mentally, emotionally and
spiritually; such an approach engages and develops the
whole person.

students to the nearby field twice or thrice a month for


sports and games. They get the chance to enjoy the
natural view as well as have some physical exercise.
PBEMS promotes group work, collecting study materials,
creative writing and presentation skills. Group work
helps them to learn sharing, to care about each other
and develop a sense of purpose; thus they are groomed
to be good citizens and responsible individuals.

Teacher Ismat Zerin Khan with Class Six Students of PBEMS

A child has conscious and unconscious aspects and


rational and irrational aspects. We support a child and
try to develop their unconscious aspects in a caring way.
We support our students to use all of their intelligence
and insight rationally, logically, creatively and in a
harmonious manner.
PBEMS focuses on individual development. We
involve each child in various activities like the annual
sports day where every student participates. Such
activities help to develop the students confidence
level. Whenever the students perform something and
are appreciated and rewarded, it motivates them in a
positive way. It raises their courage and adds positive
thinking in their minds.
PBEMS is different from other schools because we
discourage our students to memorise and recommend
reading more. Students do not take their books home for
further studies, instead, they are assigned some project
work, creative writing or some activities related to their
lessons. They are obliged to go through many books or
other resource materials to complete the project. This
allows them to widen their area of knowledge, enrich
their vocabularies, and gather information. This process
also helps to reduce the pressure of studies which is a
common phenomenon in Bangladesh.
Nowadays, coaching centres have become part and
parcel of many childrens daily routine; most of such
centres add an extra burden of studies on the students
as well as on the budget of parents. The students
eventually become exhausted by the end of the day
and dependent on the coaching centres. A valuable
portion of their childhood is spent memorising notes
supplied by coaching centres. PBEMS offers students
the opportunity to enjoy their childhood completely,
and gain a wholesome education in the process. As
our school campus has space limitations, we take our

PBEMS focuses on social development and community


services. The students are involved in a campaign
called Give Love This Winter which distributes winter
clothes and blankets to the poor and destitute. Such
involvements help to make a child aware of the plight of
poor people who are in dire need of basic necessities.
We engage our students in recycling things. The schools
recent programme A Second Look at Garbage educates
students on how to take care of the environment by
disposing garbage properly. The programme teaches
the students how to keep their community clean, they
also learn to use things properly. Our duty is to make
your child a responsible, sensible and honest citizen of
the country. If they love themselves, they will also love
their country. If they take care of their own things, they
will cultivate the love and care for others as well.
PBEMS is an institution which offers quality education
at an affordable price; many families dream of sending
their kids to an English Medium School but fail to do
so only because of high tuition fees. Taking this into
consideration, PBEMS offers quality education at a price
which caters to the masses. This unique school strives
to provide education to those who once thought that
an English Medium Education was beyond their reach.
An educated nation has a rich history and culture, which
is why PBEMS places great emphasis on cultivating
knowledge on both these sectors. Through performing
arts, a child flourishes and develops interest in areas
other than just studies. Historically and culturally
significant days are commemorated with enthusiasm
and ardour not only because of their importance but
also to develop a sense of awareness and understanding
amongst the young learners.
PBEMS hopes to touch many other young lives and
shape the future of many leaders. As teachers, we can
only hope to guide them and serve a greater good.
Ismat Zerin, Teacher, PBEMS

239

Annual Report 2014

Kvwnbx - 1

A school that truly cares and child-centered


My childs early childhood education: My daughter,
Aparajita Parin studied from Play Group to KG in a
renowned English Medium School at Mirpur for 3
years. There she had to face various problems. She
often got homework which she was not prepared for.
Punishments such as caning was a common practice
among the teachers in that school. The behaviour of
some teachers was beyond tolerable. Attempts to
make changes failed as teachers and administrators
were reluctant to sit for dialogue and plan for
improvement.
Discovering PBEMS: Hearing about PEBMS from a
relative, I became interested and admitted her in Class
1 in July 2013. She was able to cope with her class
immediately as the environment was friendly. She
enjoyed the field trips, music, art and computer classes
and the teachers and management were open and
friendly, enabling us to share our feelings with them.
Deciding for an English version school: But after
six months I and my wife suddenly decided to
transfer our daughter to a newly opened English
version school which is closer to our residence at
Mirpur Cantonment. She was admitted in Class 1 in

Aparajita Parin with her father

January 2014. We and our daughter were happy at

interest in going to school. My wife and I reflected on

the beginning because the school was under the

the situation and decided to bring our daughter back

management of the Defence Ministry. The schools

to PBEMS.

playground and canteen were big and the building


was good. However, day by day, we got negative

Returning to PBEMS: In July 2014, we sought

feedbacks about the school and observed those

readmission of my daughter at PBEMS. Now, she is in

feedbacks personally. One example is the use of slang

Class 2 and always excited to go school. She always

language by the teachers to the students. Punishing

shares what happened in class every day with lots

students by letting them stand on the table while

of excitement . Thanks to Prime Bank Foundation for

holding their ears was another concern. There was

taking the initiative to establish a school which uses an

also discrimination towards civilian students, home

interactive and child-centered methodology under the

works were not checked, sister/ayas behaviour was

Cambridge Curriculum.

improper, girls could not play on the playground and


students could not go to the library. Moreover, the

Kazi Rajibul Haque

age difference was too high in Class 1, which ranges

Father of Aparajita Parin

from 6 to 10 year olds. My daughter had reached the

Student of Class-2

point of not coping with that kind of environment

PBEMS-Mirpur

anymore. She cried almost every day and lost her

240

Kvwnbx - 2

Prime Bank English Medium School (PBEMS)


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A school that provides quality education to all

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Thoughts on beginnings: In July 2008, as I was driving


around Sector 6 in Uttara passing through Road 13, an
attractive neon sign on a building attracted my attention.
I stopped to check the information posted. Upon
entering the building, I saw a lady sitting on a wooden
chair. I asked the woman who the office belonged to
and for what. She humbly welcomed me and briefed me
about Prime Campus which is presently known as Prime
Bank English Medium School (PBEMS). In her briefing,
some special features attracted me. First, the school
was founded by Prime Bank Foundation. Secondly,
the Principal Dr. William C. Engels, was an American
educator. Thirdly, the cost is surprisingly affordable
since English medium schools which are sprouting like
mushrooms in the city have skyrocketing school fees.

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My sons future: At that time, I thought of my dear son


Nafiu Zahid Tanjim. In my heart, I wondered whether
my son could get the opportunity to be admitted in
the school since he is physically challenged. Due to
a lot of challenges, many children are deprived of
their basic right to education. I bore the heavy load of
my sons denial of admission in many schools. I was
desperately waiting for the day when I could put my son
in the mainstream society. I could not find an alternative
education for Nafiu so I dared to seek his admission at
PBEMS.
Finding a ray of hope: After some time, the lady took
me to the Principals office. That time, along with the
Principal, there were two other elderly American ladies
sitting in the room. They all welcomed me and gave me
more information in details about the school. I told them
that my son cant walk as he is physically challenged. I
asked them whether he could be admitted in the school.
To my surprise, they all assured me that he could join the
school. I knew right there and then that this school was
right for my son.
Nafius admission: After learning all the details about
Prime Campus, I registered my son and he was admitted
in Nursery class. During the first parents meeting, the
Principal explained the goals of the school which are
actually similar to what I envisioned for my son. Now, I
see my expectations being realised. I see that the school
is heading to its ultimate destination. Im extremely
grateful to the school authorities for giving my son a
chance to attend school.

241

Annual Report 2014

Prime Bank English Medium School (PBEMS)


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242

My feelings about Nafius studies:

I am grateful and very pleased about my sons


admission at PBEMS and in seeing his learning progress.
He has acquired good English speaking skills. When
my foreign business colleagues visit our residence,
they speak in English with my son and spend most of
their time with him. My heart overflows with joy when
I see my sons confidence in speaking with foreigners.
My son was admitted in this school in 2008 and he is
walking together with his physically-able classmates in
the path of learning and is now studying in Class-V. I
am hoping that each year he will complete a new level
successfully and finally move on to appear for O and A
level examinations.

My confidence in PBEMS:

Personally, I hope that the authorities of Prime Bank


Foundation are experimenting PBEMS in Uttara as a
pilot school and will replicate this noble project in other
places. I am delighted to know that a campus in Mirpur
has been running for three years. I wish that more
and more PBEMS will sprout like mushrooms not only
in the capital but throughout the entire country. I also
hope that more and more dedicated teachers and staff
members will work tirelessly to ensure that students of
PBEMSs will become responsible and good citizens of
Bangladesh. Teachers at PBEMS have taken the initiative
in moulding the childrens attitude and behaviour by
making them courteous, morally strong and advocates
of culture and heritage. All the endeavours being
initiated make this school unique and better than any
other modern English Medium Schools in the country.
Parents of physically challenged students need to be
more aware about their childs rights. A disability doesnt
mean that children dont have a future. Rather, we need
to give psychological and social support to these children
and have a positive attitude. Our physically challenged
children can live a normal and functional life if we get
a support system such as PBEMS. My son is not the
only physically challenged student at PBEMS. I am very
grateful that this school welcomes and cares for every
child who knocks at its door.

Conclusion:

For six years, I have been facing a lot of questions from


parents/guardians of students who do not understand
the different set up and methods use in PBEMS. I tried
my best to make them understand the unique nature
of the school as it is really different from most of the
traditional schools in the country. The administrators
of Prime Bank English Medium School are seasoned
educators whose desire is to mould each child not
only to be academically sound but also to be morally
upright and better citizens of the country. Nowadays,
I notice that the questions are disappearing. A unique
opportunity awaits each child in PBEMS.
Students Name: Nafiu Zahid Tanjim
Class V, ID No. 00002
Fathers Name: Md. Zahidul Alam
Prime Bank English Medium School, Uttara, Dhaka

Prime Bank Nursing Institute (PBNI)


Prime Bank Nursing Institute (PBNI) is a commendable
initiative of Prime Bank Foundation, a concern of Prime
Bank Limited. This international standard nursing
education centre was inaugurated on 13 April 2013 with
an aim to prepare knowledge based skilled nurses who
will provide high standard medical services to all classes
of people of the society. Bangladesh, as well as the
whole world faces a huge shortage of skilled nurses and
in this period of crisis, PBNI as stepped in to
this
social problem. By placing equal emphasis on technical
knowledge, skills, and the development of character
and values, PBNI seeks not only to produce competent
nurses, but to raise the standards of and expectations
from health workers across the country. The institute
currently provides a three-year diploma training to
students at a comparatively low cost, thereby providing
students an opportunity to
their and others lives
through a noble profession.
PBNIs journey started in 2013 with 40 students of
Diploma in Nursing Science and Midwifery. Every year a
large number of meritorious students seek admission in
this institute, especially those who cannot spend a huge
sum for their higher education. Prime Bank Foundation
has extended a helping hand to the general people
by providing an excellent opportunity for technical
learning; scholarships are also available for deserving
students in each batch.
As a result of its quality education, the Ministry of Health
and Family Welfare, Government of Bangladesh has
approved the plan to upgrade this institute into Prime
Bank College of Nursing and offer B.Sc. in Nursing (4
years basic and 2 years Post-Basic) courses. Courses will
be offered as soon as the affiliation with the University
of Dhaka is complete. Plans for introducing M.Sc. in
Nursing as well as short Nursing Certificate courses for
different professionals are also being contemplated.
In order to produce highly qualified nurses it is
extremely necessary to provide high quality faculties, a
well disciplined administration, modern lab facilities and
clinical practice in specialised hospitals for practical
experience and hands-on training.

Technical Assistance:

USA. She was assigned as a consultant for a Project


named Establishing Prime Bank College of Nursing
as the Nursing Education Centre of Choice for the
Potential Nursing Students of the Country and Beyond.
She made a deliberate analysis of the institutional
practices and presented elaborate recommendations.
The purpose of the project was to establish and
run a high standard nursing training institute for the
development of highly skilled nurses needed to meet
the increasingly high demand of qualified nurses by
different health care service providers in the country and
beyond. PBNI is trying its best to properly implement the
recommendations given by the consultant in order to
improve the quality of education of the institute.
A MoU has also been signed with the Cebu Normal
University of Philippines to ensure high-quality technical
assistance to sustain the persistent effort to upgrade
and improve the institute.

Lab Facilities:
All the facilities of modern teaching and accommodation
are available for students such as a well-furnished
female students hostel, well equipped classrooms
with multi-media and projector, fully air conditioned,
modern library, well equipped medical laboratory,
modern English language lab, large computer lab with
full internet access, etc.

Clinical Practice:
Nurses must have sufficient practical experience of
hospitals before they begin their career. For this purpose,
PBNI has arranged clinical practice visits to a variety of
hospitals for its students. Such visits allow students
to actively participate in clinical procedures and learn
through observation. Along with textbook knowledge,
PBNI places great importance on clinical practices. That
is why PBNI has made an arrangement with Kurmitola
General Hospital (KGH) which is the first of its kind.
KGH is a service- oriented project of the civil-military
partnership financed by the Health Ministry, supervised
by the Defence Ministry, PBNI is the first nursing institute
to gain access for clinical practice at this renowned
hospital. This in itself is a great achievement for PBNI.

Professor Ratna Prakash, Ph.D. (Consultant) is the


Principal, Pal College of Nursing & Medical Sciences,
Haldawani, Uttarkhand State, India. She is also adjunct
Professor of School of Nursing, Minnesota University,

243

Annual Report 2014

Visits by PBNI Students for Clinical Practice to Different Specialised Hospitals:

244

A Teacher is showing the student the appropriate technique of drawing


blood at kurmitola General Hospital (KGH), Dhaka.

Students directly asses the patients condition at Kurmitola General


Hospital (KGH)

A student is giving nasogastric tube feeding to a patient at Dhaka


Shishu Hospital

A student is observing the Infusion set in the child ward at Kurmitola


General Hospital (KGH)

A student is giving oxygen inhalation to a patient at Dhaka Shishu


Hospital

Students are preparing medicine for patients with the assistance of


Senior Staff Nurses at Kurmitola General Hospital (KGH).

Kvwnbx - 1

PBNI - a Beacon of Hope and a Pathway to a Brighter Future:


Anannya Modak is a second year student of Prime

round-the-clock security and are designed to provide

Bank Nursing Institute, without PBNI, Anannya would

a safe and homely environment. The skilled lecturers

have sacrificed her dream to become a nurse. Family

who are led by the Principal and Vice Principal of the

hardships and unfavourable circumstances were making

institute have been most supportive and helpful; to

higher studies seem like an impossible option for her.

Anannya they are not only teachers but guardians who

Yet now, her dreams are about to be realised after being

have brought forth an enormous

enrolled at the prestigious Prime Bank Nursing Institute.

teaching methodology that the institution employs

in her life. The

engages students in the learning process and creates


She pointed out that Prime Bank Nursing Institute

inquisitiveness. The faculty also closely supervise the

provides students with exceptional learning facilities,

students progress and provide necessary guidance.

modern

learning

Anannya added that all these facilities are providing her

environment. She also mentioned the state of the art

with an effective learning and understanding of nursing.

technology

and

conducive

facilities, which include different nursing education


nutrition,

Anannya believes that the nursing profession has the

microbiology and midwifery. In addition, there is also a

power to make a huge difference in todays health

well-equipped computer lab and an English language

care system. Nursing advocates for the individual and

lab which facilitates her with language skills to keep

focuses not only on the treatment component, but

pace with global standards.

also on prevention and health promotion. After joining

related

labs

like:

simulation,

anatomy,

this institution Anannya is learning the complexity of


accommodation

the profession and how nursing is a key component

provided to her by the Prime Bank Nursing Institute. To

of the health care system. PBNI has opened up a new

her, PBNIs hostel for the female students is like a second

opportunity for Anannya, she can now pursue a noble

home. The accommodations are fully furnished with

career and be an independent woman.

Anannya

highly

appreciates

the

245

Annual Report 2014

Health
Prime Bank Eye Hospital (PBEH)
Low vision and blindness can have negative impacts
on individuals, families, and communities. Impacts may
range from a decrease in the quality of life and increased
mortality to large-scale economic consequences. From
the cultural perspective, blindness is often stigmatised,
further alienating the afflicted from their communities.
The social disadvantages which occur due to blindness
or low vision are also significant because it leads to a
loss of social standing and decision-making authority; a
large proportion of blind women note a loss of authority
within their families. It is needless to say that the
impact of blindness and poor vision on quality of life is
quite alarming for those living in poverty. It is often the
impoverished people who are more likely to become
blind due to lack of access to health services. Due to the
lack of awareness regarding eye health, they also tend to
be more susceptible to eye infections and diseases.
Considering these aspects and the dire situation of
eye-health in Bangladesh, Prime Bank Foundation took
the noble step of opening the Prime Bank Eye Hospital
(PBEH) which started its journey from January 21, 2012
with a view to provide eye care services to all at an
affordable cost. To strengthen its service, PBEH has
signed a MoU with Aravind Eye Care System (AECS), a
centre of excellence in eye care, as Technical Assistance
Partner for receiving necessary guidance. Under their
guidance, PBEH is equipped with the most modern
ophthalmic equipment, staffed with a renowned group
of clinical and non-clinical personnel and is located in
the heart of the city at House # 82, Road # 8A, Satmasjid
Road, Dhanmondi, Dhaka-1209.
Among its many unique characteristics are PBEHs
experienced and caring team of eye specialists and
para-professionals; a one-stop approach to provide
a wide range of eye care services; its latest modern
ophthalmic equipments; its accessibility to all, with
a provision of safety-net for those who cannot afford
the treatment; the hospital is tailored to needs and is
set up to cater to people belonging to different socioeconomic strata; the pricing is at a sliding scale for
sustainability and cross-subsidisation if needed; 90% of
the surgeries are done on day care basis; VIP Cabins,
shared cabins and separate wards for both male and
female exist and there is also a medicine shop, optic
shop and a cafeteria. Without doubt, PBEH provides the

246

A session with Muslim religious leaders

services that any renowned eye hospital may have.


Prime Bank Foundation was awarded the prestigious
Asia Responsible Entrepreneurship Awards (AREA)
2014 for its exemplary contribution in corporate social
responsibility under the category of Health Promotion.
It is because of PBEHs activities and performance
that the Foundation gained international recognition
through this award. Enterprise Asias Asia Responsible
Entrepreneurship Awards (AREA) recognises and
honours Asian businesses for championing sustainable
and responsible entrepreneurship; it is indeed a great
achievement for a considerably new hospital like
PBEH to come into the international limelight because
of its commendable contribution to healthcare and
responsible practices.
Seeing the highly visible impact made in the society
through the outreach eye camps, which supplement
the base hospital, Prime Bank Limited (PBL) has been
assisting PBEH since 2013. Under the leadership of the
Head of Branch of the corresponding area, this support
continued in the year 2014 too. This year, PBL financed
24 outreach eye camps, the number of patients
examined and selected for free surgery was significantly
high compared to the year 2013. As a result, many more
patients were seen and huge numbers of patients
received surgery at PBEH with the financial support
of PBL. To reach more people, PBEH conducted a
significant number of screening programmes in schools
and industries in 2014. The screening programmes help
to reach out to more patients, cover different locations
of the city and promote the hospital as well. Outreach
camps and screening programmes have been a new
strategic shift which substantiate the activities of the
hospital.

Recently, PBEH purchased a 3D OCT (Optical Coherence


Tomography) with the aim of expanding its services; the
OCT assists in providing full confirmation of Glucoma.
In order to make the hospital personnel more capable,
PBEH sent two of its Consultants to Singapore to receive

the goals defined by the Vision 2020 initiative of the


World Health Organisation, PBEH is actively involved in
raising awareness of and generating demand for eye
health in order to promote the prevention and control
of avoidable blindness in the country. To implement its
mission to promote health seeking behaviour and early
detection and prevention, PBEH regularly runs outreach
and screening camps across the country. This is in
recognition of the fact that lack of awareness regarding
eye health is one of greatest causes for widespread
eye diseases, but also to address the practical issue of
physical accessibility for those unable to come to the
capital to benefit from PBEHs services.

Reaching More People for Eye Services

A session with Hindu, Christian & Buddist religious leaders

training on the OCT so as to provide its patients with


international standard services.

Eye problems in Bangladesh are increasing rapidly, as


a result, the countrys development rate and socioeconomic wellbeing is being hindered. The statistics
given below will help shed a clearer light on the present
condition:
Sl.

This year, the Administrative Officer of PBEH was


also sent to AECS, India, to receive training on
Management Training and System Development for
Hospital Administrators. This course equips hospital
administrators with the knowledge and skills necessary
to effectively manage an eye hospital both in its day to
day operations and to develop a hospital according to
the needs of the community it serves. Such trainings
help the employees of PBEH to provide better services
to the patients and be more competent administrators.
PBEH clearly leaves no stone unturned when it comes
to providing better care, equipment or services to its
patients.
A recent promotional strategy of PBEH has been to
create awareness about eye care and eye diseases
among different religious leaders of the society. The
religious leaders were invited to PBEH to attend a
presentation by the hospitals doctors where curable
diseases of the eye were highlighted. By sensitising
different religious leaders and representatives of the
community, Prime Bank Eye Hospital hopes to raise
awareness regarding common eye diseases which are
easily curable but remain undetected. Open discussions
were held between the leaders and the facilitators of the
programme to clear any misconceptions on common
eye diseases.
Prime Bank Foundations activities in the area of
healthcare, and ophthalmic health in particular, extend
beyond providing reactionary treatment to those
already suffering from eye diseases. Aiming to meet

Particulars (in Bangladesh) Information


Visually impaired

Visually impaired (children)

Children visually impaired due


to cataract

Incidence rate (every year)

Visually impaired aged over 30


years

Sufferig from Cataracts

Having Refractive Error (people)

Having Refractive Error

15,00,000 (1.1%)
40,000
12,000
1,50,000
7,50,000 (1.53%)
6,50,000
33,00,000
13,00,000

(children)
9

Annual Cataract Surgery Rate

1100 per 1 million

People having eye problems are not very interested in


availing eye care treatment from any nearby eye care
centre/hospital. The common reasons behind their
hesitancy are:

fear of surgery

the wrong assumption that eye problems are an


age related matter and is natural

inability to bear the treatment costs

no accompanying person

bad transport facilities

the closest eye service centre is very far

fatalistic attitude (eye defects are Allahs will, and


that they will survive somehow even with acute
eye problems)

tension
about
obeying
recommendations properly

post-operative

247

Annual Report 2014


throughout the country. About 60,000 (sixty thousand)
patients have been examined by these camps and
almost 3,000 cataract patients have undergone
operations at Prime Bank Eye Hospital.
This great humanitarian role makes PBEH/PBF a
Gateway for eye patients to obtain necessary eye
care. PBEH has gained significant popularity within the
short span of time it has been functioning because
of its ethical approach, humanitarian goals and
unconventional facilities which are available at minimum
cost.

A patient with cataract

The reason why people are reluctant to seek eye


care treatment varies with geographical and cultural
settings. From our experience, we believe there is a
huge demand for eye care treatment in and around the
country but the supply side facilities are not sufficient.
Lack of awareness of available eye care treatment and
lack of understanding of eye services are some of
the root causes for which people are not availing eye
services.

Dr. Anthony Albert, Consultant & Project Director performing surgery


in the Operation Theatre (OT), PBEH

To address the above causes, Prime Bank Eye Hospital


(PBEH) has taken different steps to eliminate the doubts
and confusions usually seen in eye patients. Initiatives
of PBEH include:

Top class eye care services through Prime Bank Eye


Hospital (base hospital)

Outreach Eye Camps (throughout the country)

School Screening Camps (in and around Dhaka)

Industry Screening Camps (within 30 km radius of


the base hospital)

Outreach Eye Camp of PBEH:


PBEH itself and with the financial support of Prime Bank
Limited (PBL), has been providing eye care services
among poor people through outreach eye camps

248

From our brief experience as a new hospital it is clear


that people having eye problems need to be motivated
to seek eye care treatment. When viewed in context,
many of the reasons given above start to make sense.
That is why we are actively pursuing industrial and
school screening campaigns throughout the country,
these are elaborated below:
School Vision Screening Programme of PBEH:
Childhood blindness is a severe problem in our country. A
research study has revealed that about 40,000 children
are blind of which 12,000 are due to congenital cataract.
The other causes of childhood blindness are vitamin-A
deficiency, glaucoma, retinal disease, amblyopic, low
vision etc. Besides this, about 9,925 children in every 1
million are suffering from refractive error which could
easily be corrected with glasses.
Myopia is one of the most common eye problem faced
by children/students. About 59% of child blindness in
Bangladesh is preventable, treatable and curable. Child
cataract is treatable by timely intervention. The purpose
of a school vision screening programme is to identify
students with possible visual impairments. Visual
problems can and do affect the physical, intellectual,
social, and emotional development of students. The
key to successful treatment is early identification and
intervention which may prevent educational problems
and permanent vision impairments. Even mild vision
impairments may be educationally and medically
significant. Therefore, vision screening programmes
should be an integral part of the total school health
programme.
Since PBEH has significant experience in eye care with
the technical support of Aravind Eye Care System
of India, it has enough opportunity to conduct eye
screening of students for all schools (Pre-primary,
Primary and Secondary) in Dhaka City. On the day of
the school screening, a team from our hospital visits the
school with eye screening kits in order to indentify visual
acuity problems for the students. After preliminary

screening by a trained Optometrist, those who are


identified with eye defects are counseled and advised
by the PBEH team to seek further treatment at our base
hospital.
PBEH adopted the School Vision Screening programme
since its inception and the performance of the last two
years is given below:

Year

Schools
Screened

Students
Screened

Problem

Service
received
from PBEH

2012

02

141

50

04

2013

10

3,632

417

73

2014

13

3,399

279

90

Total

25

7,172

746

167

Plan of operation for School Vision Screening:


Teachers Orientation: Optometrists, nurses and
Field Coordinator/Organiser visits the schools to train
all teachers about common eye diseases and vision
testing. Eye screening kits, including standard Snellen
and illiterate eye charts are provided to teachers for
vision screening.
Explanation to Students: It is important that students
understand the purpose of vision screening, and their
role in the activity. School health personnel should plan
time to review the purpose of periodic vision screening,
and demonstrate screening procedures prior to the
screening for early elementary students.
Preliminary Vision Screening by Trained Teachers:
Teachers will screen their classes for refractive errors and
ocular diseases, and keep a record of such students.
Vision Screening by Eye Health Team: An eye health
team visits the schools and conducts additional exams
of pre-screened children to confirm the diagnosis while
those requiring further investigation will be referred to
the PBEH eye hospital.
Parent/Guardian Notification for Referral of the
Identified Students: The success of the programme
depends on the implementation of a systematic
follow-up procedure including notification to parents/
guardians in writing.
School health personnel may precede this with a
telephone call, and/or through a parents conference
regarding screening results requiring a professional
vision examination. The aim is to refer the student
to an eye care professional and avoid making any

recommendation to a specific individual, or a specific


class of practitioner (ophthalmologist or optometrist.).
Treatment and Spectacles Prescribed to the Referral
Students: Glasses will be prescribed to children and
provided at a subsidised rate at PBEH. Other students
(except those with refractive error) will be treated by
Consultants as per PBEH policy.
Reference to Other Hospitals (if needed): Low Vision,
Childhood Cataract and other complicated students (if
needed) will be referred to other service centres where
the required services are available.
Preliminary Screening of New and Defective Students
by Teachers: Following the initial training, teachers
will screen new and defective students every year and
normal students on alternating years. Reports will be
provided to the PBEH for screening by the eye health
team. It is our belief that training of the class teachers
to conduct eye screenings will reduce undetected
ocular defects in school children and increase the
likelihood of students adhering to follow-up requests at
eye hospitals. This initiative has the potential to greatly
reduce needless visual disparities among Dhaka City
school children.

Industry Eye Screening Programme of PBEH


WHO estimates that 153 million people worldwide
and 3.3 million people in Bangladesh live with visual
impairments due to uncorrected refractive errors.
Refractive errors cannot be prevented, but they can
be diagnosed by eye examination and treated with
corrective glasses, contact lenses or refractive surgery.
The purpose of vision screening in industries is to identify
employees in need of ophthalmic services. By having
the employees referred to the proper practitioners helps
reduce employee fatigue, increases quality control
and reduces the risk of accidents. In this context, it is
necessary to mention that there are many workers who
are not even aware of the problem in their eye sight and
continue to suffer from easily curable problems.
PBEH started the eye screening camp for industry
workers from January of 2014. Three industrial screenings
were held this year where 379 workers were screened. A
total of 181 workers were identified with Refractive Error,
spectacles were prascribed to 174, 67 spectacles were
dispansed and 25 workers were advised for referral.

249

Annual Report 2014

School Vision Screening Programme

250

Counseling Teachers about School Vision Screening

Counseling Teachers/Students

Preliminary Vision Testing by Teachers

Vision testing by the PBEH team

School Children who have Refractive Error (RE) are at PBEH


to received further treatment

PBEH Optometrist identifying Refractive Error of a student

PBEH Industry Screening Programme

Vision testing to identify visual problems

Vision testing with a Snellen chart

Eye examination by a Doctor

Doctor speaking with a patient

Spectacles are prescribed by an Optometrist

Spectacles are being dispensed

251

Annual Report 2014

Service Delivery
Direct treatment costs have been a major concern for
service users and their families, especially for those
belonging to the lower socio-economic classes. Thus,
PBEH follows the model of cost plus at a very reasonable
price. As a result, patient flow at the base hospital
(PBEH) is increasing remarkably day by day. PBEH is
well equipped with the most sophisticated ophthalmic
equipment. Recently, PBEH has introduced 3D Optical
Coherence Tomography (OCT) service at the base
hospital in order to provide high class service to patients
who have Glaucoma. In order to prepare more accurate
medical reports on OCT, two senior Ophthalmologists
from PBEH were sent to Singapore for advanced training.
PBEH sincerely pursues any avenue which will enhance
the performance of its staff and the overall hospital
since it aims to provide international standard services
to all its patients, regardless of their financial status.

Conclusion:
Prime Bank Eye Hospital aims to raise awareness about
the low use of cataract services, and adopt strategies
that will promote equality in eye service delivery, access

252

A patient is being examined by OCT

and use. Our target people are those who do not use
or have access to basic eye services. Despite the
hurdles, Prime Bank Eye Hospital has performed very
efficiently and is committed to continue its eye service
as long as there is a demand for it. The main objective of
PBEH continues to be a desire to provide international
standard services to all.

Sports &
Culture
Prime Bank Cricket Club (PBCC)
Prime Bank Foundation believes that sports is
not only a source of entertainment but is also
connected with the mental and physical health,
and the character development of the nation. As a

whole, Prime Bank has long been a patron of culture


in Bangladesh, having sponsored several sporting
events over many years. Cricket, no doubt, is a
passion of the entire nation.

The exuberant team after winning the Dhaka Premier League

To offer players a chance to experience the life of


professional cricket and to improve their skills, the
Prime Bank Cricket Club (PBCC) was formed in 2011.
PBCC involves world class players in its team as well as
gives an opportunity to local young players a chance to
experience the international flavour.
Subsequent plans involve the development of an
integrated cricket development programme that has
created a pathway for continued athletic progress for
promising talents. In addition, PBF was also involved in
the general promotion and popularisation of cricket all
over the country through participation in various other
cricket events/tournaments.
The highlights of the achievements made by PBCC in
the 2014 are briefly outlined below:

In 2014 the Prime Bank South Zone defeated the


BCB North Zone by 213 runs in the final round of
the tournament and became the champion of
Bangladesh Cricket League which is considered

the 2nd highest event in the field of 1st class Cricket


Tournament. In this tournament Cricketer Imrul
Kayes of Prime Bank South Zone was selected as
the Man of the Match.

Dhaka Premier League is the countrys oldest and


premium most club cricket competition. The Cricket
Committee of Dhaka Metropolis (CCDM) organises
the competition annually and since its inception,
DPL is considered as the lifeline of Bangladeshs
domestic cricket. Major sports clubs participate in
the battle every year for the prestigious trophy of
DPL; DPL has been the nucleus for emerging stars
that have later graced the field for Bangladesh.
PBCC became the unrivalled champions of the
Dhaka Premier League (DPL) 2014-2015 season
after winning 13 out of a total of 16 matches
and gaining 26 points. The team has been led
by Mr. Mahmudullah Riyadh, one of the most
promising players of national cricket team. Such
an achievement must be attributed to the proper
leadership of the teams coach, Mr. Khaled Mahmud
Sujan, ex national player and captain of Bangladesh

253

Annual Report 2014

The exceptional players of Prime Bank Cricket Club (PBCC)

that young and promising players must be given


a chance to excel as well as learn from veteran
players. PBCC provides excellent logistical support,
a professional and systematic approach and best
practices which set it apart and highlights its
exceptional standards.

Cricket Team. Organisational professionalism


and excellent logistical support were very much
instrumental for boosting the motivation of the
players in order to be victorious.

254

Prime Bank Cricketers Taskin Ahmed, Soumya


Sarkar, Mahmudullah Riyad and Taijul Islam have
been selected to represent Bangladesh in the
Cricket World Cup 2015. This clearly indicates the
high quality and skills of the players of PBCC.
PBCC has a unique blend of players which
includes both seasoned performers and budding
new talents-this enforces the Foundations belief

By becoming the DPL champions, PBCC has proved


that its management and coaching methods are
truly on par with international standards. A lot is
yet to be achieved, but PBCC is slowly but steadily
moving towards recognition and fame.

Executives of Prime Bank Foundation

CSR Contribution Conducted Directly by Prime Bank Limited (PBL) During the Period Jan-Dec, 2014

Sports
Donation to Fahad Rahman, youngest FIDE Master
of the world for attending 2 tournaments in India in
May and June, 2014

Sponsorship of Ghatail Golf Cup Tournament

Sponsorship of
Tournament 2014

Indoor

University

Sponsorship of Beach Football


organised by Impress Telefilm

Tournament

Disaster Management
Distribution of 35,000 blankets among poor people

Cricket

Arts & Culture


Sponsorship of an International Seminar on History
and Tradition organised by Itihas Academy

Others
Sponsorship of month long Autism Awareness
Programme in April organised by Positive Thinking,
an organisation for children with special needs

Sponsorship of 3rd Leadership Summit organised


by Brand Forum

Sponsorship of International Seminar on Sustainable


SME Development in Bangladesh organised by SME
Consultant, Bangladesh Bank

Sponsorship of Police Week 2014 organised by


Bangladesh Police

Donation to Government of Bangladesh for


organising Lakho Kontha Sonar Bangla

Sponsorship of Sadhinata Utshob organised by BD


Communication

Sponsorship of National Science Olympiad-2014

Sponsorship of Pitha Utshab organised by Baridhara


Society

Co-sponsorship of live programme of Borsho Boron


& Borsho Biday organised by Channel-i

255

Annual Report 2014

Made education more accessible to the target population we work for, both access and
quality in education have been given attention, as education programmes continued
to be implemented.
Sizeable increases of our programme reached all sixty four districts of the country including
the very hard-to-reach areas through ESP, a programme to respond to the needs of the
grad/post-grad level, under privileged but meritorious students of the country.

Goal 1

Three Strategic Goals

Availability of low cost quality education to a much larger number of children through
Prime Bank English Medium School, Uttara & Mirpur.
Signing of an MoU with Cebu Normal University, one of the centres of excellence for
nursing education in the Philippines to have them as a technical assistance partner for
Prime Bank Nursing Institute, a new initiative of Prime Bank Foundation which began
year and aims to develop highly skilled nurses at an affordable price needed to meet
the increasingly high demand of nurses by different healthcare service providers in the
country and beyond.

Make education
more accessible
to the target
population we
work for

Availability of high quality nursing education at an affordable cost through enrolment


of the first batch of students at Prime Bank Nursing Institute after its formal launching
from the beginning of 2013.

Completed the set up of Prime Bank Eye Hospital in Dhaka, a well equipped eye
hospital staffed with a skilled workforce with the technical assistance from Aravind
Eye Care System of India to provide a wide range of eye care services to all.

Goal 2

Make health more accessible to the target population we work for.

Where cost is an issue, eye care is not out of reach, Prime Bank Eye Hospital, an
initiative of Prime Bank Foundation, from the beginning of 2012 has started providing

Build a strong and dynamic organisation, capable of facilitating effective education,


and other components of health programme. Creating positive impact on public
opinion, policies and practices.
Our capacity development endeavour, is envisioned to institutionalise learning
processes and systematically organise sharing of information, experiences, best
practices and lessons learned with our project level people and the organisation
we work with. We aim to institutionalise the core values of responsible corporate
citizenship into the way of doing business, to mould future business and to
professionalise the practice of CSR.
Monitor, measure and report on the impact of the work that we do.
Implemented information sharing and communication sharing and communication
systems to lead our people and programmes.
Increased efficiency in managing organisational resources.
Continued building capacity of project staff and systems to support our target people.

256

Make health more


accessible to the
target population
we work for

Goal 3

high quality eye care services as part of its Corporate Social Responsibility.

Build a strong and


dynamic organisation,
capable of facilitating
effective education,
eye and other
components of health
programme

04

stakeholders information

257

Annual Report 2014

Stakeholders
Information
Distribution of Shareholdings in 2014
Number of Shares

Types

2014

% of Shares
2013

2014

2013

Sponsors

417,229,033

416,508,783

40.53%

40.46%

Financial Institutions

225,681,418

188,617,995

21.92%

18.32%

Foreign Investors

14,055,207

51,108,455

1.37%

4.97%

3,991,569

3,752,285

0.39%

0.36%

368,391,389

369,361,098

35.79%

35.89%

1,029,348,616

1,029,348,616

100.00%

100.00%

Non- Resident Bangladeshi


General Public
Total

Types of Shareholding

Ge
ne
r
35 al Pu
.79 blic
%
,

Foreign
Investors,
1.37%

Financial Institutions
Foreign Investors
Non-resident Bangladeshi

Financia
l
Institutio
ns,
21.92%

Non-resident
Bangladeshi,
0.39%

Sponsors

s ors ,
Spon 3%
.
40 5

General Public

Shares Held by Directors in 2014


Sl

Name of the directors

Opening
position

Closing
position

Change

Mr. Azam J Chowdhury


(Representative of East Coast Shipping Lines Ltd.)
Mr. Khandker Mohammad Khaled

Vice Chairman

28,570,378

28,570,378

0.00%

Mr. M. A. Khaleque

Vice Chairman

21,846,820

21,846,820

0.00%

Quazi Sirazul Islam

Director

20,616,158

20,616,158

0.00%

Mr. Md. Nader Khan

Director

38,019,361

38,019,361

0.00%

Mr. Md. Shirajul Islam Mollah

Director

20,644,922

20,644,922

0.00%

Mr. Mafiz Ahmed Bhuiyan

Director

20,591,099

20,591,099

0.00%

Director

27,811,583

27,811,583

0.00%

Director

20,760,250

100.00%

10

Mr. Md. Shahadat Hossain


Mr. Mizanur Rahman Bhuiyan
(Representative of Uniglory Cycle Industries Ltd.)
Mrs. Marina Yasmin Chowdhury

Director

20,882,328

20,882,328

0.00%

11

Mrs. Nazma Haque

Director

20,678,053

20,678,053

0.00%

Chairman

20,601,158

20,601,158

0.00%

12

Mrs. Nasim Anwar Hossain

Director

23,365,749

23,365,749

0.00%

13

Mrs. Salma Huq

Director

32,254,341

32,254,341

0.00%

14

Mrs. Muslima Shirin

Director

20,587,749

20,587,749

0.00%

15

Mr. Nafis Sikder

Director

25,826,178

25,826,178

0.00%

16

Mr. Imran Khan

Director

20,588,337

20,588,337

0.00%

17

Prof. Ainun Nishat

Independent Director

18

Mr. Manzur Murshed

Independent Director

29,277

29,277

0.00%

19

Prof. Dr. Mohammed Aslam Bhuiyan

Independent Director

20

Mr. Ahmed Kamal Khan Chowdhury

Managing Director

362,913,491

383,673,741

5.72%

Total

258

Status

Redressal of Investors Complaint

Investors are informed of avenues to raise their


complaints within the organization;

Prime Bank Limited is strongly committed to equitable


treatment of every shareholder, whether they are major
or minority shareholders, institutional investors, or foreign
shareholders. To ensure equal treatment of all shareholders
the bank created various mechanisms, such as:

Complaints are treated efficiently and fairly;

PBL employees work in good faith and without


prejudice, towards the interests of the investors.

Way of Redress Investor Complaints

Investor can complain through email info@


primebank.com.bd;

An Investor can make a written complaint through


letter;

The Company maintains investor grievance file in


which full detail of every written complaint shall
enter;

We have 3 designated person look after the investor


grievances in due time;

The full detail of the written complaint must be


passed to the concerned department and inform
the compliance officer of the Company as soon as
it is received;

A letter or email must be written to all the investor


who have submitted written complaints by
the designated person or Compliance Officer
acknowledging receipt of the complaint and
informing them it will be dealt with;

Audit & Compliance Department will obtain all


information available on the complaint which is
considered necessary for a proper investigation,
look into all the necessary information and resolve
these soon as possible;

Shareholders who are unable to attend the shareholders


meeting, the bank provides proxy forms which allow
shareholders to specify their vote on each agenda. The
proxy forms, which are in accordance with the standard
format, are sent along with the annual report.
The shareholders meetings proceed according to the
order of the agenda, without adding new and uniformed
agenda, in order to give the opportunity to shareholders
to study the information on the given agenda before
making a decision. Moreover, there are no changes to
the important information in the shareholders meeting.
The bank sees the importance of the consideration of
transactions which may have conflict of interest or may
be connected or related transactions, and abides by
good corporate governance principles, including the
rules and regulations of the Bangladesh Securities and
Exchange Commission and the Dhaka Stock Exchange
and the Chittagong Stock Exchange transactions,
Directors, management and those who are related
persons do not participate in the consideration to
approve such transactions.
The bank provides a channel for minority shareholders
to propose issues deemed important and appropriate
to include in the agenda of the banks annual general
meeting of shareholders and to nominate candidates
with appropriate knowledge, abilities and qualifications
to be considered for the position of Director.
Complaint redressal is supported by a review
mechanism, to minimize the recurrence of similar issues
in future.
PBL follows the following principles:
Investors must be treated fairly at all times;

Complaints raised by investors must be dealt with


courtesy and in a timely manner;

The bank continues to have regular communication


with the shareholders through periodic updates of
performance and at any other time when it believes it to
be in the best interest of shareholders generally.
Investors inquiries / Complaint
Any queries relating to shareholdings for example transfer
of shares, changes of name and address, and payment of
dividend should be sent to the following address:

Share Department
Sarker Mansion (8th Floor)
29, Rajuk Avenue, Dhaka 1000
Phone: 9567265/261

259

Annual Report 2014

Financial Highlights - Group & PBL


Prime Bank Limited
Performance during the year

2014

2013

Taka in

Taka in

million

million

Group
Change

2014

2013

Change

Taka in

Taka in million

million

18,446

22,011

-16.20

18,468

22,036

-16.19

6,157

7,474

-17.63

6,228

7,732

-19.46

Provision for loans and assets

2,877

4,029

-28.60

3,075

4,030

-23.69

Profit after provision before tax

3,280

3,445

-4.80

3,152

3,702

-14.85

887

1,616

-45.10

907

1,664

-45.50

2,393

1,829

30.80

2,246

2,038

10.17
5.24

Interest income
Profit before provision and tax

Tax including deferred tax


Profit after tax
At the year end

24,461

23,030

6.21

24,582

23,359

204,838

201,907

1.45

204,804

201,811

1.48

147,367

153,589

-4.05

152,719

159,010

-3.96

72,642

56,940

27.58

74,496

58,751

26.80

6,613

6,407

3.21

6,649

6,457

2.97

254,912

243,869

4.53

256,349

245,507

4.41

Total shareholders' equity


Deposits
Loans and advances
Investments
Property, plant and equipment
Total assets
Statutory Ratios (%)

6.71

6.97

-0.26

6.71

6.97

-0.26

Statutory liquidity ratio

29.83

38.39

-8.56

29.83

38.39

-8.56

Capital adequacy ratio

12.71

12.04

0.67

12.68

12.03

0.65

Cash reserve ratio

Share Information
2.32

1.78

30.34

2.18

1.98

10.10

Dividend (%)

15.00

12.50

2.50

15.00

12.50

2.50

Net assets value per share (Taka)

23.76

22.37

6.21

23.88

22.69

5.24
2.43

Earnings per share (Taka)

Ratios (%)
7.61

5.09

2.52

7.34

4.91

10.08

8.35

1.73

9.37

9.20

0.17

0.96

0.76

0.20

0.89

0.84

0.05

Non performing loans


Return on average shareholders' fund
Return on average assets

Constituents of Assets of PBL

Constituents of Liabilities & Capital of PBL

7.47

63

3.

2.59%

5.56
%

4.04%

7.04%

1%
3.0

28.50%

80.35%
57.81%

Paid-up Capital

Reserves & Surplus

Borrowings

Deposit

Other Liabilities

Constituents of Liabilities & Capital of Group

Loans & Advances

Investments

Fixed Assets Liquid Assets

Other Assets

Constituents of Assets of Group

8%

7.4

2.59%

5.57

4.02%

7.37%

5%

3.1

1.30%

29.06%

79.89%
59.57%

Paid-up Capital

260

Reserves & Surplus

Deposit

Borrowings

Other Liabilities

Loans & Advances

Investments

Fixed Assets

Liquid Assets

Other Assets

Financial Highlights - PBL


Gross Revenue

Profit Before Tax

(Taka in million)

(Taka in million)
5,000

25000

4,000

30,561

30000

3,000

10000

2,000
1,000

5000

0
2013

3,280

15000

27,480

20000

3,445

35000

2013

2014

2014

Total Capital Fund


(Taka in million)
28,000
24,000

12,000

27,313

16,000

26,495

20,000

2013

2014

8,000
4,000
0

Taka in million
Particulars

2014

2013

Gross revenue

27,480

30,561

Operating income

11,906

12,883

Profit after tax

2,393

1,829

Total capital

27,313

26,495

204,838

201,907

147,367

153,589

Total deposits
Total loans & advances
Total assets
No. of deposits accounts
No. of loans & advances accounts
Return on assets (%)

254,912

243,869

1,208,249

1,083,793

48,044

49,594

0.96

0.76

Return on equity (%)

10.08

8.35

Statutory liquidity ratio (%)

29.83

38.39

Capital adequacy ratio (%)

12.71

12.04

2,867

2,710

122

117

18

17

Long -term

"AA"

"AA"

Short-term

ST-2

ST-2

Long -term

"AA2"

"AA2"

Short-term

ST-2

ST-2

No. of employees
No. of branches
No. of SME branches/centers
Rating (CRISL)

Rating (CRAB)

261

Annual Report 2014

Graphical Presentation - PBL

Earnings per Share


(Taka)

2013

2014

24.54

2010

2011

23.76

2012

22.37

2011

22.21

2010

2.32

1.78

2.88

29.27

4.70

5.69

Net Asset Value per Share


(Taka)

2012

2013

2014

Shareholders' Equity
(Taka in million)

13.53

20.19

21.65

24,461

23,030

20,787
2012

2013

2014

2010

2011

2012

Return on Assets (%)

10.08

2011

8.35

2010

19,095

16,908

Return on Equity (%)

2013

2014

Operating Profit

6,157

0.76

0.96

1.24

6,176

7,427

7,474

8,551

2.05

2.22

(Taka in million)

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Profit after Tax


(Taka in million)

2010

262

2011

2012

2013

9,034

8,551

8,081

5,473

1,829

7,498

2,393

2,699

3,101

3,634

Non-Interest Income
(Taka in million)

2014

2010

2011

2012

2013

2014

Investment Income

36.94

35.75

36.62

2010

2011

2012

41.98

6,194

5,583

4,633

2014

2,632

4,157

(Taka in million)

48.29

Cost-Income Ratio (%)

2013

2014

2010

2011

2012

2014

201,907

Loans & Advances


Deposits

2013

147,367

138,848

159,816

124,574
2010

116,057

2012

2,840

3,447

2011

Deposit & Advance


(Taka in million)
2,968

3,341

2,841

Fee based Income


(Taka in million)

2013

204,838

2013

153,589

2012

182,053

2011

160,890

2010

2014

Non-Performing Loans
(Taka in million)

11.23

10.54

10.46

12.26

7,815

12.28

2010

2010

2011

2012

2013

2014

1,908

1,368

6,168

11,215

Savings Deposit as % of Total Deposit

2011

2012

2013

2014

Branch Network

140

2012

2013

2014

43

81

134

2014

130

160

2013

119

151

2012

108

134

Number of ATM

2010

2011

2010

2011

263

Annual Report 2014

Stock Performance - Market Price Information


The reported high and low prices and volume of shares of Prime Bank Limited traded during the year 2014 on
Dhaka Stock Exchange and Chittagong Stock Exchange are given below:
DSE
Month

High

Low

Taka

Taka

January

27.90

CSE
Volume

23.80

5,352,529

High

Low

Taka

Taka

28.00

Total Volume
Volume

22.00

on DSE & CSE

129,479

5,482,008
20,646,896

February

27.50

24.10

20,524,583

27.50

23.50

122,313

March

26.00

22.50

3,864,720

25.20

20.00

180,239

4,044,959

April

24.70

20.00

19,675,302

25.00

19.20

117,690

19,792,992

May

24.80

22.20

15,900,993

25.00

19.20

388,614

16,289,607

June

24.90

22.40

16,014,580

25.00

20.50

141,170

16,155,750

July

24.50

23.10

4,536,459

24.00

21.60

75,718

4,612,177

August

24.00

19.00

27,165,224

23.10

18.20

165,204

27,330,428

September

22.00

19.10

7,423,096

21.80

17.20

147,366

7,570,462

October

22.70

19.50

13,899,134

22.50

18.50

120,348

14,019,482

November

24.50

18.60

5,883,613

21.00

17.20

140,341

60,23,954

December

20.50

18.00

6,104,124

20.80

18.00

167,816

6,271,940

Price Earning Ratio (Times)


Market Capitalization
(Taka in million)

12.85

14.57

16.60

54,572

34,624
26,660

8.43

8.34

9.47

34,702

20,175
2009

2010

2011

2012

2013

2010

2014

2011

2012

Market Price per Share

2010

264

2011

2012

2013

19.60

25.90

37.00

44.50

94.45

(Taka)

2014

2013

2014

Segment Analysis
Operating Revenue

PBL

6.84%

91.85%

1.31%

Conventional Banking

Islamic Banking

Off-shore Banking

Profit before Tax

Assets Employed

20.27%

6.51%
89.83%

3.66%

75.69%

4.04%

Conventional Banking

Off-shore Banking

Islamic Banking

Conventional Banking

Islamic Banking

Off-shore Banking

Operating Revenue

6.67%

89.54%

1.27%
0.63%
1.89%

Conventional Banking
Off-shore Banking

Group

Islamic Banking

Local Subsidiaries (PBIL, PBSL)

Assets Employed

Profit before Tax

6.23
86.02%

21.09%

3.51%
3.29%

78.76%

4.20%

0.95%
-6.60%
2.55%

Conventional Banking
Off-shore Banking

Islamic Banking

Local Subsidiaries (PBIL, PBSL)

Conventional Banking
Off-shore Banking

Islamic Banking

Local Subsidiaries (PBIL, PBSL)

265

Annual Report 2014

Horizontal/Vertical Analysis - Key Financial Data & Key Business Ratios - PBL
Taka in million
Particulars

2010

2011

2012

2013

2014

Operating Performance (Income Statement)


Interest income

12,147

16,709

22,822

22,011

18,446

Interest expenses

7,824

12,648

17,410

17,678

15,574

Net interest income

4,323

4,061

5,411

4,332

2,872

Investment income

2,632

4,157

4,633

5,583

6,194

Commission, exchange and brokerage

2,262

2,689

2,429

2,155

2,033

579

652

1,018

813

806

Operating Income

9,795

11,559

13,492

12,883

11,906

Operating expenses

3,618

4,132

4,941

5,409

5,750

13,643

19,666

23,024

21,422

19,187

Profit before provision and tax

6,177

7,427

8,551

7,474

6,157

Provision for loans and assets

540

661

3,216

4,029

2,877

Other Operating Income

Earning before interest, depreciation and tax

Profit after provision before tax

5,637

6,766

5,335

3,445

3,280

Tax including deferred tax

2,535

3,132

2,636

1,616

887

Profit after tax

3,102

3,634

2,699

1,829

2,393

10,000

10,000

25,000

25,000

25,000

5,776

7,798

9,358

10,293

10,293

Balance Sheet (Financial Position)


Authorized capital
Paid-up capital
Total shareholders' equity

16,908

19,095

20,787

23,030

24,461

Deposits

124,574

159,816

182,053

201,907

204,838

Long-term liabilities

47,918

63,379

84,827

91,424

104,040

Loans and advances

116,057

138,848

160,890

153,589

147,367

Investments

20,484

39,172

45,862

56,940

72,642

Property, plant and equipment

1,695

3,975

4,363

6,407

6,613

137,577

179,537

212,204

211,399

221,521

7,349

2,262

2,735

15,023

21,064

Total assets

154,342

199,950

236,833

243,869

254,912

Total liabilities

137,434

180,856

216,046

220,839

230,451

Earning assets
Net current assets

Current ratio

1.09

1.02

1.02

1.12

1.17

Gearing ratio

76.98

77.88

80.97

80.67

81.42

1.09

1.01

1.01

1.12

1.17

Quick ratio

6.70

6.22

6.06

6.97

6.71

Statutory liquidity ratio

Cash reserve ratio

26.00

32.96

34.02

38.39

29.83

Equity debt ratio (%)

12.30

10.56

9.62

10.43

10.61

Import

147,704

174,384

168,532

133,219

126,571

Export

Other Business

266

106,943

133,396

143,612

127,091

110,096

Remittance

28,433

36,890

42,443

32,628

39,484

Guarantee business

29,000

27,844

29,391

31,170

30,155

Taka in million
Particulars

2010

2011

2012

2013

2014

Capital Measures (Consolidated)


183,747

194,380

205,103

222,791

216,324

Core capital (Tier-I)

Total risk weighted assets

15,791

18,744

20,664

21,708

22,611

Supplementary capital (Tier-II)

5,692

5,485

5,252

5,104

4,812

21,483

24,229

25,916

26,812

27,424
10.45

Total capital
Tier-I capital ratio

8.60

9.64

10.08

9.74

Tier-II capital ratio

3.09

2.82

2.56

2.29

2.23

Total capital ratio

11.69

12.46

12.64

12.03

12.68

1,368

1,908

6,168

7,815

11,215

1.18

1.37

3.83

5.09

7.61

1,463

1,725

2,025

1,691

1,741

642

778

1,949

3,733

4,586

94.45

44.50

37.00

25.90

19.60

Credit Quality
Non-performing loans (NPLs)
NPLs to total loans and advances (%)
Provision for unclassified loans
Provision for classified loans
Share Information
Market price per share (Taka)
No. of shares outstanding (Million)

577.64

779.81

935.77

1029.35

1029.35

No. of shareholders (actual)

19,748

26,030

23,964

25,632

23,102

Earnings per share (Taka)

5.69

4.70

2.88

1.78

2.32

Dividend:

40%

30%

20%

12.50%

15.00%
15.00%

Cash

5%

10%

10%

12.50%

Bonus

35%

20%

10%

49.52

40.21

21.82

13.10

15.00

1.42

1.57

1.44

1.42

1.55

Effective dividend ratio (%)


Dividend cover ratio (times)
Dividend yield (%)

4.23

6.74

5.41

4.83

7.65

54,572

34,702

34,624

26,660

20,175

Net asset value per share (Taka)

29.27

24.49

22.21

22.37

23.76

Price earning ratio (times)

16.60

9.47

12.85

14.57

8.43

Net interest margin (NIM)

4.21

3.19

3.61

2.75

1.91

Net non-interest margin on average earning assets

1.50

2.12

1.60

1.48

1.52

Earning base in assets (average)

88.66

89.51

89.69

88.12

86.80

Gross profit ratio

43.33

Market capitalization

Operating Performance Ratio (%)

55.60

47.75

43.66

42.15

Net interest income as a percentage of working funds

3.10

2.29

2.48

1.80

1.15

Profit per employee

2.89

3.24

3.36

2.76

2.15

Operating profit as a percentage of working funds

4.43

4.19

3.92

3.11

2.47

Cost-income ratio

36.94

35.75

36.62

41.98

48.29

Credit-deposit ratio

93.16

86.88

88.38

76.07

71.94

Cost of funds on average deposits

6.39

8.15

8.75

8.80

7.36

Yield on average advance

11.76

13.09

15.17

13.85

12.09

Return on average assets

2.22

2.05

1.24

0.76

0.96

Return on average equity

21.65

20.19

13.53

8.35

10.08

9.53

9.01

8.10

6.53

4.79

94

102

113

117

122

Return on capital employed


No. of branches
No. of SME branches/centers

14

17

17

17

18

Number of ATM

43

81

134

151

160

2,139

2,292

2,544

2,710

2,867

621

644

660

661

638
216,460

No. of employees
No. of foreign correspondents
Average earning assets

123,741

158,557

195,871

211,802

Average total assets

139,574

177,146

218,392

240,351

249,391

Average deposits

115,765

142,195

170,934

191,980

203,372

102,654

127,452

149,869

157,239

150,478

14,327

18,002

19,941

21,908

23,745

Average loans & advances


Average equity

267

Annual Report 2014

Statement of Value Added and its Distribution


Taka in million
Particulars

2014

2013

Income from banking services

27,480

30,561

Less: Cost of services & supplies

(17,701)

(19,838)

Value added by banking service

9,779

10,723

(2,877)

(4,029)

6,902

6,695

To employees as salaries & allowances

3,288

2,951

To providers of capital as dividend & reserve

2,200

1,976

1,180

1,616

Retained profit by the entity

193

(146)

Depreciation

333

298

(293)

233

152

6,902

6,695

Non-banking income
Provision for loans & off-balance sheet exposure

Distribution of value addition

To Government as income tax


To expansion and growth

Deferred taxation

Total

Distribution of value addition-2013

44.08%

To employees as salaries
& allowances
To providers of capital as
dividend & reserve

To providers of capital
as dividend & reserve
To Government as
income tax
Retained profit
Depreciation

29.51%

.10

-4.24%
4.83%
2.79%

4 .46%

17
To employees as salaries
& allowances

24.14%

268

Distribution of value addition-2014

0%

-2.19%

Deferred taxation

47.64%
31.88%

To Government as income tax


Retained profit by the entity
Depreciation
Deferred taxation

A n n u al R eport 2 0 1 4

Economic Value Added Statement



Economic value added is a measure of profitability which takes into consideration the cost of total invested equity.
Shareholders / equity providers are always conscious about their return on capital invested. As a commercial banking
company, we are deeply concerned for delivery of value to all of our shareholders / equity providers.
Taka in million
2014
Shareholders' equity

2013

2012

24,461

23,030

20,787

7,416

6,514

4,082

31,877

29,543

24,869

30,710

27,206

23,734

Profit after taxation

2,393

1,829

2,699

Add: Provision for loans / investments, off-balance sheet exposure and


Off-shore Banking Units

2,877

4,029

3,216

(2,123)

(2,541)

(404)

3,147

3,318

5,511

12.90%

12.90%

13.46%

Cost of average equity

3,961

3,509

3,194

Economic value added

(814)

(192)

2,316

-325.27%

-108.27%

87.33%

Add: Cumulative provision for loans / investments, off-balance sheet


exposure and Off-shore Banking Units
Average shareholders' equity
Earnings

Less: written-off during the year


Average cost of equity (based on weighted average rate of Shanchay
Patra issued by the Government of Bangladesh) plus 2% risk premium.

Growth over last year

Taka in million

Maturity analysis

Below 1 year

Interest earning assets

1-5 years

Above 5 years

Total

139,637

50,770

31,115

221,521

7,704

4,500

21,187

33,391

147,341

55,269

52,302

254,912

117,882

53,825

37,856

209,564

8,394

1,290

11,203

20,888

126,276

55,116

49,059

230,451

Maturity Gap

21,064

153

3,243

24,461

Cumulative Gap

21,064

21,218

24,461

Non-interest earning assets


Total assets

Interest bearing liabilities


Non-interest bearing liabilities
Total liabilities

Market Value Addition

Economic Value Addition

(Taka in million)

(Taka in million)

2,316

1,800

20,175

24,461

2,800

800

1,237

-192

-200

-814
Book Value

Market Value

Value Addition

-1,200

2011

2012

2013

2014

269

Annual Report 2014

Economic impact report



The banks overall mission is to deliver optimum value to its customers, employees, shareholders and the nation
and the business strategy is geared towards achieving this. This section covers the value the bank delivers to its
shareholders and the nation at large.

The banks policy has been to deliver optimum value in a manner that is consistent with the highest levels of fairness
and transparency. For the bank, it has not been a case of building financial value and enhancing the bottom line at
any cost, but rather participating in a process of creating value through fair and ethical means. Building sustainable
value of all stakeholders is an important corporate goal.
Some of the measures taken to create, sustain and deliver optimum value are as follows:

Maintaining capital adequacy


Capital adequacy symbolizes the financial strength and stability of a bank. It limits the extent up to which banks can
expand their business in terms of risk weighted assets. Like all commercial institutions, banks too constantly look at
ways of expanding their operations by acquiring property, plant and equipment, opening branches, in addition to
mobilizing deposits, providing loans and investing in other assets.

Regulatory capital requirements are therefore necessary to prevent banks from expanding beyond their ability to
manage (over trading), to improve the quality of banks assets, to control the ability of the banks to leverage their
growth and to lead to higher earnings on assets, leading to peace of mind of all the stakeholders. The bank keeps a
careful check on its capital adequacy ratios.

12.03

2011

2012

2013

12.68

12.64

2010

12.46

11.69

Capital Adequacy Ratio (%)

2014

Core Capital and Supplementary Capital - 2014


Taka in million

ary

nt

12 me
4,8 pple l
Su pita
Ca

22,611
Core Capital

270

The capital adequacy computation on consolidated basis as at December 31, 2014 is given below:
Taka in million
Details of Capital Fund

2014

2013

Tier-I: Core capital


Paid-up capital

10,293

10,293

Share premium

2,241

2,241

28

28

Statutory reserve

8,185

7,529

Surplus in consolidated profit and loss account / Retained earnings

1,864

1,616

22,611

21,708

General provision maintained against unclassified loans / investments

1,664

1,659

General provision maintained against off-balance sheet exposure

1,088

1,090

78

32

231

68

752

756

1,000

1,500

4,812

5,104

27,424

26,812

216,320

222,791

10.45

9.74

2.23

2.29

12.68

12.03

General Reserve
Minority interest in subsidiaries

Total Tier-I capital


Tier-II: Supplementary capital

General provision maintained against Off-shore Banking Units


Revaluation gain / loss on investment (50% of total)
Revaluation reserve for equity instruments (10% of unrealized market gain)
Revaluation reserve for fixed assets (50% of total)
Subordinated bond
Exchange equalization account
Total Tier-II capital
Total capital
Total risk-weighted assets
Core capital ratio (%)
Supplementary capital ratio (%)
Total capital adequacy ratio (%)

Maintaining liquidity
The liquidity policy of the bank has always been to carry a positive mismatch in the interest earning assets and
interest bearing liabilities in the 1 to 30 days category. Our liquidity remained at optimum levels during the year. The
liquid assets ratio stood at 29.83% (required 13% of total demand & time deposits) in December 2014.

The assets and liabilities committee (ALCO) of the bank monitors the situation and maintains a satisfactory trade-off
between liquidity and profitability.

271

Annual Report 2014

Payment of dividends


The dividend policy of bank has always been to pay a decent dividend to its shareholders while ploughing back
sufficient profits to fund growth and capital adequacy requirements. As a result of this prudent dividend policy, the
bank has been able to build up its shareholders fund base to satisfactory levels.
Considering the performance of the bank over the past year, the Board has recommended cash dividend of 15% for
the year 2014.

Stock Dividend (%)

50
40
35

Cash Dividend (%)

5
5

30
25
20

10
35
10

15
20

10

15

12.5

10

5
0
2010

2011

2013

2013

2014

Market share information of the Banks Product/ Services


Prime Bank-Deposit

250,000

Industry - Deposit

Taka in million

2011

1012

2013

2014

Industry - Loans and Advances

2010

2011

182,053
1012

2014

Prime Bank-Loans and Advances

Taka in million

Taka in million

180,000

6,000,000

120,000
100,000
80,000
60,000

147,367

5,451,495

4,386,156

3,105,453

3,782,471

3,000,000

4,761,510

4,000,000

153,589

140,000

160,890

160,000

5,000,000

40,000
20,000

0
2010

272

204,838

2010

1,000,000

201,907

2,000,000

2013

50,000

138,848

1,000,000

116,057

2,000,000

100,000

2,343,147

3,000,000

150,000
159,816

4,170,647

4,000,000

200,000

124,574

5,006,825

5,000,000

5,806,965

6,000,000

6,588,516

7,000,000

2011

2012

2013

2014

2010

2011

2012

2013

2014

Disclosure for Non-Performing Assets


Movements of NPA
Particulars
Opening Balance

Amount in Taka (Million)


2014

2013

7,814.50

6,168.50

Add: Addition NPA during the period

11,939.86

14,768.88

Less: NPA recovered during the period

(2,209.31)

(1,824.96)

Less: NPA declassified/regularized as performing during the period

(3,648.76)

(8,542.39)

Less: NPA written-off during the period

(2,681.65)

(2,755.53)

Closing Balance (NPA)

11,214.64

7,814.50

Sector-wise Break up of NPA


Particulars

Amount in Taka (Million)


2014

2013

Corporate

6,014.47

5,257.70

Retail

1,453.83

1,144.36

SME

3,637.60

1,322.90

108.73

89.54

11,214.64

7,814.50

238

96

Credit Card
Total NPA
No. of rescheduled loans during the year (incl. Retail Banking Div. & SME
Banking Div.)
Movement of Provisions made against NPA
Opening Balance

1,949.08

Add: addition during the year

4,318.50

Less: Adjustment during the year

(2,534.53)

Closing Balance

3,733.05

96 Accounts was rescheduled during the year


Statement of Value Added and its Distribution
Government as Taxes
Tax

1,862.25

TDS

2,796.31

VAT

462.55

Total

5,121.11

Shareholders as Dividend
Employees as bonus/remuneration

935.77
2,950.61

Retained by the entity

Market Share information of the Company's product/ services

Economic value added

273

Annual Report 2014

Financial Calendar 2014


Quarterly Results
Audited consolidated results for the 4th quarter ended 31 December 2013

Announced on

4th March 2014

Unaudited consolidated results for the 1st quarter ended 31 March 2014

Announced on

14th May 2014

Unaudited consolidated results for the 2nd quarter and half-year ended 30
June 2014

Announced on

23rd July 2014

Unaudited consolidated results for the 3rd quarter ended 30 September 2014

Announced on

29th October 2014

Dividends
Distribution of cash dividend of 12.50% in respect of financial year ended 31 December 2013
Notice of Annual General Meeting

1st April 2014


4th March 2014
30th March 2014

Annual General Meeting


Stock Details
Particulars

DSE

CSE

PRIMEBANK

PBBANK

Company Code

11116

22013

Listing year

2000

1999

Stock Symbol

Market category

Electronic share

Yes

Yes

1,029,348,616

1,029,348,616

Market lot
Total number of securities

Availability of information about PBL


Annual Report 2014 and other information about PBL may be viewed on PBLs website www.primebank.com.bd
PBL provides copies of Annual Reports to the Bangladesh Securities and Exchange Commission, Bangladesh Bank,
Dhaka Stock Exchange and Chittagong Stock Exchange for their reference. Investors may read them at their public
reference room or library.
Market Value Added Statement
Market Value Added (MVA) statement is the difference between the total market value and the total book value of
shares of a bank. A high MVA indicates that the bank has created substantial wealth for the shareholders. MVA is
equivalent to the present value of all future expected economic value added. The share market value of banks shares
stood at Tk. 20,175 million whereas the book value of the shares stood at Tk 24,461 million, resulting a Market Value
reduce of Tk. 4,286 million as of December 31, 2014. The calculation of Market Value Added is given below:
Particulars

Value in Taka

Taka in million

Market value

1,029,348,616

19.60

20,175

Book value

1,029,348,616

23.76

24,461

Market value added

274

No. of shares

(4,286)

Glimpses of
19th AGM

275

Annual Report 2014

276

05

financial statements

277

Annual Report 2014

Independent Auditors Report


to the shareholders of Prime Bank Limited

Report on the Financial Statements


We have audited the accompanying consolidated financial statements of Prime Bank Limited and its subsidiaries (the
Group) as well as the separate financial statements of Prime Bank Limited (the Bank), which comprise the consolidated
and separate balance sheets as at 31 December 2014, and the consolidated and separate profit and loss accounts,
consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for
the year then ended, and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements and Internal Controls
Management is responsible for the preparation of consolidated financial statements of the Group and also separate
financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting
Standards as stated in note # 2.18 and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that
are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 and the Bangladesh
Bank Regulations require the Management to ensure effective internal audit, internal control and risk management
functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud
internal controls and report to Bangladesh Bank on instances of fraud and forgeries.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate
financial statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh
Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements of the Group and
separate financial statements of the Bank are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements of the Group and separate financial statements of the Bank. The procedures
selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements of the Group and separate financial statements of the Bank, whether due to fraud
or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation
of consolidated financial statements of the Group and separate financial statements of the Bank that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group
and also separate financial statements of the Bank.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank
give a true and fair view of the consolidated financial position of the Group and the separate financial position of the
Bank as at 31 December 2014, and of its consolidated and separate financial performance and its consolidated and
separate cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards as stated
in note # 2.18.
Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991 and
the rules and regulations issued by Bangladesh Bank, we also report the following:
a. we have obtained all the information and explanation which to the best of our knowledge and belief were
necessary for the purpose of our audit and made due verification thereof;

278

b. to the extent noted during the course of our audit work performed on the basis stated under the Auditors
Responsibility section in forming the above opinion on the consolidated financial statements of the Group and
the separate financial statements of the Bank and considering the reports of the Management to Bangladesh
Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Managements
Responsibility for the Financial Statements and Internal Controls:
i.

internal audit, internal control and risk management arrangements of the Group and the Bank, as disclosed
in note # 2.11 & 2.19 (i & ii) of the financial statements, appears to be adequate except for the effects of the
immaterial control deficiencies as identified by us and being submitted to the management of the Bank via
management report;

ii.

nothing has come to our attention regarding material instances of forgery or irregularity or administrative
error and exception or anything detrimental committed by employees of the Bank and its related entities
other than matters disclosed in note # 2.19 (iii) of these financial statements;

c. financial statements of two subsidiary companies namely, Prime Bank Investment Limited and Prime Bank
Securities Limited have been audited by Howlader Yunus and Co. Chartered Accountants and another three
subsidiary companies namely, Prime Exchange Co. (Pte) Limited, Singapore, PBL Exchange (UK) Limited and PBL
Finance (Hong Kong) Limited have been audited by C.C Yang & Co., Chartered Accountants, Reddy Siddique &
Kabani, Chartered Accountants, and T.O. YIP & Co. Limited, Chartered Accountants respectively and have been
properly reflected in the consolidated financial statements;
d. in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as
it appeared from our examination of those books;
e. the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance
sheet and separate profit and loss account of the Bank dealt with by the report are in agreement with the books
of account;
f.

the expenditure incurred was for the purposes of the Banks business;

g. the consolidated financial statements of the Group and the separate financial statements of the Bank have
been drawn up in conformity with prevailing rules, regulations and Bangladesh Financial Reporting Standards as
explained in note 2.18 as well as with related guidance, circulars issued by Bangladesh Bank and decision taken in
tripartite meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the Management, Prime
Bank Limited held on 25 February 2015.
h. adequate provisions have been made for advances which are, in our opinion, doubtful of recovery;
i.

the records and statements submitted by the branches have been properly maintained and consolidated in the
financial statements;

j.

the information and explanations required by us have been received and found satisfactory; and

k.

we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 6,850 person
hours for the audit of the books and accounts of the Bank.

ACNABIN
Chartered Accountants

Syful Shamsul Alam & Co


Chartered Accountants

Dhaka, 26 February 2015

279

Annual Report 2014

Consolidated Balance Sheet


as at

Particulars

Notes

Amount in Taka
31.12.2014

31.12.2013

01.01.2013

2,365,051,461

2,705,924,415

2,069,226,315

PROPERTY AND ASSETS


Cash

In hand (including foreign currencies)


Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies)
Balance with other banks and financial institutions

15,194,723,820

14,958,779,761

14,117,939,937

17,559,775,281

17,664,704,176

16,187,166,252

In Bangladesh
Outside Bangladesh
Money at call and short notice

Investments

Government
Others

272,467,219

370,140,473

239,695,022

1,331,769,386

709,510,273

1,466,724,570

1,604,236,605

1,079,650,746

1,706,419,592

70,928,312,066

56,147,165,851

44,936,697,967

3,567,999,947

2,603,960,634

3,065,827,910

74,496,312,013

58,751,126,485

48,002,525,877
156,374,907,982

Loans, advances and lease /investments


Loans, cash credits, overdrafts etc./ investments

145,825,411,559

150,378,169,432

Bills purchased and discounted

6,893,824,341

8,631,546,764

8,667,419,387

152,719,235,900

159,009,716,196

165,042,327,369

Fixed assets including premises, furniture and fixtures

6,648,653,116

6,456,759,073

4,419,804,836

Other assets

10

3,144,775,578

2,545,075,883

2,790,186,731

Non - banking assets

11

176,340,640

256,349,329,133

245,507,032,559

238,148,430,657

8,083,203,317

4,273,597,629

21,149,348,118

Current / Al-wadeeah current deposits

27,556,891,987

26,525,056,611

27,294,074,815

Bills payable

2,942,889,234

2,081,417,055

3,421,438,111

Savings bank / Mudaraba savings deposits

25,106,122,963

21,125,908,174

19,188,831,632

Term deposits / Mudaraba term deposits

Total assets
LIABILITIES AND CAPITAL
Liabilities
Borrowings from other banks, financial institutions and agents

12

Deposits and other accounts

13

149,197,612,596

152,078,311,714

132,046,235,924

Bearer certificate of deposit

Other deposits

204,803,516,780

201,810,693,554

181,950,580,482

Other liabilities

14

18,881,002,879

16,064,222,050

14,086,694,880

231,767,722,976

222,148,513,233

217,186,623,480

15.2

10,293,486,160

10,293,486,160

9,357,714,690

Share premium

15.8

2,241,230,396

2,241,230,396

2,241,230,396

Minority Interest

15.9

60

65

67

Statutory reserve

16

8,184,646,579

7,528,626,614

6,839,527,566

Total liabilities
Capital / Shareholders' equity
Paid -up capital

Revaluation gain / loss on investments

17

461,794,800

135,671,362

42,034,865

Revaluation reserve

18

1,503,518,556

1,511,486,306

251,603,567

Foreign currency translation gain

19

4,510,188

General reserve
Surplus in profit and loss account / Retained earnings

280

20

4,892,900

3,646,693

28,002,888

28,002,888

1,864,033,818

1,616,368,842

2,225,185,837

Total Shareholders' equity

24,581,606,157

23,358,519,326

20,961,807,176

Total liabilities and Shareholders' equity

256,349,329,133

245,507,032,559

238,148,430,657

Consolidated Balance Sheet


as at

Particulars

Notes

Amount in Taka
31.12.2014

31.12.2013

01.01.2013

OFF - BALANCE SHEET EXPOSURES


Contingent liabilities

21

Acceptances and endorsements

21.1

26,742,389,739

30,869,304,940

33,064,522,464

Letters of guarantee

21.2

61,408,149,593

55,438,139,259

44,031,123,130

Irrevocable letters of credit

21.3

20,698,448,178

20,885,957,458

30,602,172,770

Bills for collection

21.4

9,262,180,366

9,221,494,133

10,094,765,189

118,111,167,876

116,414,895,790

117,792,583,553

Documentary credits and short term trade -related


transactions

Forward assets purchased and forward deposits placed

Undrawn note issuance and revolving underwriting facilities

Undrawn formal standby facilities , credit lines and other


commitments

Liabilities against forward purchase and sale

118,111,167,876

116,414,895,790

117,792,583,553

Other contingent liabilities


Other commitments

Total Off-Balance Sheet exposures including contingent liabilities

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman

Director

Director

Managing Director

See annexed auditors report to the Shareholders of the date.

ACNABIN
Chartered Accountants

Syful Shamsul Alam & Co


Chartered Accountants

Dhaka, 26 February 2015

281

Annual Report 2014

Consolidated Profit and Loss Account


for the year ended 31 December 2014
Particulars

Notes

Amount in Taka
2014

2013

Interest income / profit on investments

23

18,467,920,602

Interest / profit paid on deposits, borrowings, etc.

24

(15,629,158,843)

(17,738,761,514)

2,838,761,759

4,296,842,423

Net interest / net profit on investments

22,035,603,937

Investment income

25

6,258,530,291

5,863,198,678

Commission, exchange and brokerage

26

2,233,954,643

2,332,258,137

Other operating income

27

882,869,884

880,802,275

12,214,116,577

13,373,101,513

28

3,394,371,944

3,050,300,291

Total operating income (A)


Salaries and allowances
Rent, taxes, insurance, electricity, etc.

29

627,590,438

595,222,912

Legal expenses

30

39,566,713

40,451,700

Postage, stamp, telecommunication, etc.

31

120,248,747

141,707,735

Stationery, printing, advertisements, etc.

32

216,460,016

231,679,549

Managing Director's salary and fees

33

8,674,785

11,590,000

Directors' fees

34

4,082,879

4,443,241

Auditors' fees

35

2,097,114

1,631,427

Charges on loan losses

36

Depreciation and repair of Bank's assets

37

417,210,587

365,272,233

Other expenses

38

1,156,252,723

1,198,735,007

5,986,555,946

5,641,034,094

6,227,560,631

7,732,067,419

Specific provision

2,643,500,000

2,980,000,000

General provision

114,000,000

642,000,000

Provision for Off-Shore Banking Units

76,000,000

362,000,000

(1,510,000)

10,000,000

2,831,990,000

3,994,000,000

(57,065,592)

24,475,240

248,810,195

1,354,126

Total operating expenses (B)


Profit / (loss) before provision (C=A-B)
Provision for loans / investments

39

Provision for off-balance sheet exposures


Provision for diminution in value of investments
Provision for impairment of client margin loan
Other provisions
Total provision (D)
Total profit / (loss) before taxes (C-D)

51,598,089

10,135,000

3,075,332,692

4,029,964,366

3,152,227,939

3,702,103,053

1,200,938,014

1,664,898,350

Provision for taxation:


Current tax

40

Deferred tax
Net profit after taxation
Retained earnings brought forward from previous year

282

20.1

(294,247,041)

(1,105,233)

906,690,973

1,663,793,117

2,245,536,966

2,038,309,936

274,516,818

295,160,847

2,520,053,784

2,333,470,783

Consolidated Profit and Loss Account


for the year ended 31 December 2014
Particulars

Amount in Taka

Notes

2014

2013

Appropriations
Statutory reserve

656,019,965

689,099,048

Minority interest

0.28

General reserve

28,002,888

656,019,966

717,101,941

Retained surplus

20

1,864,033,818

1,616,368,842

Earnings per share (EPS)

45

2.18

1.98

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman

Director

Director

Managing Director

See annexed auditors report to the Shareholders of the date.

ACNABIN
Chartered Accountants

Syful Shamsul Alam & Co


Chartered Accountants

Dhaka, 26 February 2015

283

Annual Report 2014

Consolidated Cash Flow Statement


for the year ended 31 December 2014
Particulars
A)

Notes

Amount in Taka
2014
2013

Cash flows from operating activities


Interest receipts in cash

23,664,151,487

27,624,433,535

Interest payments

(16,816,635,431)

(17,972,431,422)

Dividend receipts

79,659,231

89,885,351

2,233,954,643

2,332,258,137

26,343,014

6,064,168

Cash payments to employees

(3,470,154,157)

(3,031,288,851)

Cash payments to suppliers

(774,889,053)

(812,060,773)

(1,247,770,954)

(1,862,253,078)

Fees and commission receipts in cash


Recoveries of loans previously written off

Income taxes paid


Receipts from other operating activities

41

2,010,032,909

1,912,401,737

Payments for other operating activities

42

(1,622,403,717)

(1,578,552,527)

4,082,287,972

6,708,456,274

(11,634,112,033)

(3,274,763,630)

4,158,023,522

3,543,714,833

(4,019,982,179)

(7,837,890,184)

3,866,183,305

(16,896,544,183)

2,727,186,380

20,905,176,176

861,472,179

(1,340,021,056)

2,276,255,420

655,531,219

(1,764,973,406)

(4,244,796,824)

2,317,314,566

2,463,659,451

5,000,000

5,000,000

(17,833,595)

293,682,203

(543,794,029)

(918,179,822)

(3,624,186)

(6,126,544)

1,646,486

2,079,350

(558,605,324)

(623,544,813)

Cash generated from operating activities before


changes in operating assets and liabilities
Increase / (decrease) in operating assets and liabilities
Statutory deposits
Purchase of trading securities (Treasury bills)
Loans and advances to other banks
Loans and advances to customers
Other assets

43

Deposits from other banks / borrowings


Deposits from customers
Other liabilities account of customers
Trading liabilities
Other liabilities

Net cash from operating activities


B)

Cash flows from investing activities


Debentures
Payments for purchases of securities
Purchase of property, plant and equipment
Payment against lease obligation
Proceeds from sale of property, plant and equipment
Net cash used in investing activities

284

44

Consolidated Cash Flow Statement


for the year ended 31 December 2014
Particulars
C)

Notes

Amount in Taka
2014
2013

Cash flows from financing activities


Receipts from issue of sub-ordinated bond

Receipts from issue of ordinary share including premium net off Tax

(1,342,610,131)

(992,804,143)

(1,342,610,131)

(992,804,143)

416,099,111

847,310,494

3,471,253

(7,211,283)

18,750,630,322

17,910,531,111

19,170,200,686

18,750,630,322

2,365,051,461

2,705,924,415

(including foreign currencies)

15,194,723,820

14,958,779,761

Balance with other banks and financial institutions

1,604,236,605

1,079,650,746

Money at call and short notice

Reverse repo

6,188,800

6,275,400

19,170,200,686

18,750,630,322

Dividend paid
Net cash used in financing activities
D)

Net increase / (decrease) in cash and cash equivalents (A+ B + C)

E)

Effects of exchange rate changes on cash and cash equivalents

F)

Cash and cash equivalents at beginning of the year

G)

Cash and cash equivalents at end of the year (D+E+F)


Cash and cash equivalents at end of the year
Cash in hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank (s)

Prize bonds (note-6a)

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman

Director

Director

Managing Director

Dhaka, 26 February 2015

285

286

Net gains and losses not recognized


in the income statement

Net profit for the year

Dividends (Bonus shares)

Cash dividend

Minority interest

Issue of share capital-right share

Appropriation made during the year

Dhaka, 26 February 2015

Chairman

10,293,486,160

Currency translation differences

Balance as at 31 December 2013

Surplus / (deficit) on account of


revaluation of investments

10,293,486,160

Adjustment of last year revaluation


gain on investments

Balance as at 31 December 2014

10,293,486,160

28,002,888

28,002,888

28,002,888

28,002,888

Taka

General
reserve

2,241,230,396

2,241,230,396

2,241,230,396

2,241,230,396

Taka

Share
premium
Taka

Minority
interest

65

60

(5)

65

65

1,511,486,306

1,503,518,556

(7,967,750)

1,511,486,306

1,511,486,306

Taka

Revaluation
reserve

135,671,362

461,794,800

Director

Director

461,794,800

616,680,832

(290,557,394)

135,671,362

135,671,362

Taka

Revaluation
gain / loss on
investments

These financial statements should be read in conjunction with the annexed notes 1 to 51.

7,528,626,614

8,184,646,579

656,019,965

7,528,626,614

7,528,626,614

Taka

Taka

10,293,486,160

Statutory
reserve

Paid up capital

Surplus / (deficit) on account of


revaluation of properties

Restated balance

Changes in accounting policy / Last


year's profit

Balance as at 1 January 2014

Particulars

for the year ended 31 December 2014

Consolidated Statement of Changes in Equity

3,646,693

4,892,900

4,892,900

1,246,208

3,646,693

3,646,693

Taka

F.C. translation
gain

(5)

(1,342,610,131)

2,245,536,966

23,678,679,327

2,004,314

616,680,831

(290,557,394)

(7,967,750)

23,358,519,326

23,358,519,326

Taka

Total

Managing Director

1,616,368,842 23,358,519,326

1,864,033,818 24,581,606,157

(656,019,965)

(1,342,610,131)

2,245,536,966

1,617,126,949

758,107

1,616,368,842

1,616,368,842

Taka

Retained
earnings

Annual Report 2014

Balance Sheet
as at 31 December 2014

Particulars

Notes

Amount in Taka
2014

2013

PROPERTY AND ASSETS


Cash

3a

In hand (including foreign currencies)

2,340,059,101

2,683,867,027

15,194,723,820

14,958,779,761

17,534,782,921

17,642,646,788

Balance with Bangladesh Bank and its agent bank (s)


(including foreign currencies)
Balance with other banks and financial institutions

4a

In Bangladesh
Outside Bangladesh
Money at call and short notice

Investments

6a

Government
Others

258,877,340

244,165,129

1,253,809,238

626,533,772

1,512,686,578

870,698,901

70,928,312,066

56,147,165,851

1,713,515,478

792,350,658

72,641,827,544

56,939,516,509

142,780,100,320

147,380,881,952

Loans, advances and lease / investments


Loans, cash credits, overdrafts, etc./ investments

7a

Bills purchased and discounted

8a

4,586,552,073

6,207,878,277

147,366,652,393

153,588,760,229

Fixed assets including premises, furniture and fixtures

9a

6,612,686,818

6,406,719,662

Other assets

10a

9,067,223,175

8,420,462,735

Non - banking assets

11

Total assets

176,340,640

254,912,200,069

243,868,804,824

7,668,875,959

3,858,260,882

27,586,626,484

26,612,333,767

LIABILITIES AND CAPITAL


Liabilities
Borrowings from other banks, financial institutions and agents
Deposits and other accounts

12a
13a.1.c

Current / Al-wadeeah current deposits


Bills payable

2,942,889,234

2,081,417,055

Savings bank / Mudaraba savings deposits

25,106,122,963

21,125,908,174

Term deposits / Mudaraba term deposits

149,202,091,888

152,087,482,186

Bearer certificate of deposit

Other deposits

204,837,730,569

201,907,141,182

17,944,881,561

15,073,785,652

230,451,488,089

220,839,187,716

Other liabilities

14a

Total liabilities
Capital / Shareholders' equity
Paid up capital

15 .2

10,293,486,160

10,293,486,160

Share premium

15.8

2,241,230,396

2,241,230,396

Statutory reserve

16

8,184,646,579

7,528,626,614

Revaluation gain / (loss) on investments

17a

441,469,626

109,193,803

Revaluation reserve

18

1,503,518,556

1,511,486,306

Foreign currency translation gain

19a

5,086,036

4,513,294

20a

1,791,274,627

1,341,080,535

Other reserve
Surplus in profit and loss account / Retained earnings
Total Shareholders' equity
Total liabilities and Shareholders' equity

24,460,711,980

23,029,617,108

254,912,200,069

243,868,804,824

287

Annual Report 2014

Balance Sheet
as at 31 December 2014

Particulars

Amount in Taka

Notes

2014

2013

OFF - BALANCE SHEET EXPOSURES


Contingent liabilities

21a

Acceptances and endorsements

21a.1

26,742,389,739

30,869,304,940

Letters of guarantee

21a.2

61,408,149,593

55,438,139,259

Irrevocable letters of credit

21a.3

20,698,448,178

20,885,957,458

Bills for collection

21a.4

9,262,180,366

9,221,494,133

Other contingent liabilities

118,111,167,876

116,414,895,790

Documentary credits and short term trade -related transactions

Forward assets purchased and forward deposits placed

Undrawn note issuance and revolving underwriting facilities

Undrawn formal standby facilities , credit lines and other commitments

Liabilities against forward purchase and sale

Other commitments

Total Off-Balance Sheet exposures including contingent liabilities

118,111,167,876

116,414,895,790

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman

Director

Director

Managing Director

See annexed auditors report to the Shareholders of the date.

ACNABIN
Chartered Accountants
Dhaka, 26 February 2015

288

Syful Shamsul Alam & Co


Chartered Accountants

Profit and Loss Account


for the year ended 31 December 2014
Particulars

Notes

Amount in Taka
2014

2013

Interest income / profit on investments

23a

18,445,885,369

22,010,657,745

Interest / profit paid on deposits, borrowings, etc.

24a

(15,573,523,588)

(17,678,359,259)

2,872,361,781

4,332,298,486

Net interest / net profit on investments


Investment income

25a

6,194,358,289

5,582,706,055

Commission, exchange and brokerage

26a

2,033,125,238

2,155,485,165

Other operating income

27a

806,468,141

812,592,003

11,906,313,449

12,883,081,709

Total operating income (A)


Salaries and allowances

28a

3,279,735,275

2,939,016,912

Rent, taxes, insurance, electricity, etc.

29a

582,596,952

550,258,309

Legal expenses

30a

35,854,242

37,756,195

Postage, stamp, telecommunication, etc.

31a

112,446,490

134,001,255

Stationery, printing, advertisements, etc.

32a

210,809,010

227,285,212

Managing Director's salary and fees

33

8,674,785

11,590,000

Directors' fees

34a

3,799,929

4,364,816

Auditors' fees

35a

1,150,000

690,000

Charges on loan losses

36

Depreciation and repair of Bank's assets

37a

400,253,143

348,115,280

Other expenses

38a

1,114,305,707

1,155,846,289

Total operating expenses (B)

5,749,625,533

5,408,924,268

Profit / (loss) before provision (C=A-B)

6,156,687,916

7,474,157,441

Specific provision

2,643,500,000

2,980,000,000

General provision

114,000,000

642,000,000

Provision for Off-Shore Banking Units

76,000,000

362,000,000

(1,510,000)

10,000,000

2,831,990,000

3,994,000,000

(7,000,000)

24,527,202

51,598,089

10,135,000

Total provision (D)

2,876,588,089

4,028,662,202

Total profit / (loss) before taxes (C-D)

3,280,099,827

3,445,495,239

1,180,000,000

1,616,000,000

(292,800,000)

887,200,000

1,616,000,000

2,392,899,827

1,829,495,239

54,394,765

200,684,344

2,447,294,592

2,030,179,583

Provision for loans / investments

39a

Provision for off-balance sheet exposures

Provision for diminution in value of investments


Other provisions

Provision for taxation


Current tax

40a

Deferred tax

Net profit after taxation


Retained earnings brought forward from previous years

20.1a

289

Annual Report 2014

Profit and Loss Account


for the year ended 31 December 2014
Particulars

Amount in Taka

Notes

2014

2013

Appropriations

Statutory reserve
General reserve

656,019,965

689,099,048

656,019,965

689,099,048

Retained surplus

20a

1,791,274,627

1,341,080,535

Earnings per share (EPS)

45a

2.32

1.78

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman

Director

Director

Managing Director

See annexed auditors report to the Shareholders of the date.

ACNABIN
Chartered Accountants
Dhaka, 26 February 2015

290

Syful Shamsul Alam & Co


Chartered Accountants

Cash Flow Statement


for the year ended 31 December 2014
Particulars

Notes

Amount in Taka
2014

2013

A) Cash flows from operating activities


Interest receipts in cash

23,176,223,192

27,019,442,414

Interest payments

(16,338,208,336)

(17,374,446,980)

Dividend receipts

79,659,231

89,885,351

2,033,125,238

2,155,485,165

26,343,014

6,064,168

(3,356,517,489)

(2,921,049,473)

(650,305,772)

(806,734,400)

(1,247,770,954)

(1,862,253,078)

Fees and commission receipts in cash


Recoveries of loans previously written off
Cash payments to employees
Cash payments to suppliers
Income taxes paid
Receipts from other operating activities

41a

1,866,257,765

1,558,097,238

Payments for other operating activities

42a

(1,482,600,260)

(1,429,170,216)

Cash generated from operating activities before


changes in operating assets and liabilities

4,106,205,631

6,435,320,188

Increase / (decrease) in operating assets and liabilities


Statutory deposits

(11,634,112,033)

(3,274,763,630)

4,089,651,062

4,760,494,847

(4,074,433,703)

(8,849,257,530)

Deposits from other banks / borrowings

3,859,709,442

(16,835,943,667)

Deposits from customers

2,784,707,590

20,902,604,991

861,472,179

(1,340,021,056)

2,338,428,624

729,880,009

(1,774,576,839)

(3,907,006,036)

2,331,628,792

2,528,314,152

5,000,000

5,000,000

25,040,898

(35,329,490)

(541,008,697)

(859,824,544)

(3,624,186)

(6,126,544)

1,646,486

2,079,350

(512,945,499)

(894,201,228)

Purchase of trading securities (Treasury bills)


Loans and advances to other banks
Loans and advances to customers
Other assets

43a

Other liabilities account of customers


Trading liabilities
Other liabilities

Net cash from operating activities

44a

B) Cash flows from investing activities


Debentures
Proceeds from sale of securities
Payments for purchases of securities
Purchase of property, plant and equipment
Payment against lease obligation
Proceeds from sale of property, plant and equipment
Net cash used in investing activities

291

Annual Report 2014

Cash Flow Statement


for the year ended 31 December 2014
Particulars

Notes

Amount in Taka
2014

2013

C) Cash flows from financing activities


Receipts from issue of sub-ordinated bond

Receipts from issue of ordinary share including premium net off Tax

(1,286,685,770)

(935,771,469)

(1,286,685,770)

(935,771,469)

531,997,523

698,341,455

2,039,687

(5,400,826)

18,519,621,089

17,826,680,460

19,053,658,299

18,519,621,089

2,340,059,101

2,683,867,027

15,194,723,820

14,958,779,761

1,512,686,578

870,698,901

Money at call and short notice

Reverse repo

6,188,800

6,275,400

19,053,658,299

18,519,621,089

Dividend paid
Net cash used in financing activities

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C)


E) Effects of exchange rate changes on cash and cash equivalents
F) Cash and cash equivalents at beginning of the year
G) Cash and cash equivalents at end of the year (D+E+F)

Cash and cash equivalents at end of the year


Cash in hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies)
Balance with other banks and financial institutions

Prize bonds (note-6a)

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman
Dhaka, 26 February 2015

292

Director

Director

Managing Director

293

Net gains and losses not recognized in the income statement

Net profit for the year

Dividends (Bonus shares)

Cash dividend

Share premium

Issue of share capital (Right share)

Appropriation made during the year

Dhaka, 26 February 2015

Chairman

2,241,230,396

2,241,230,396

2,241,230,396

7,528,626,614

8,184,646,579

656,019,965

7,528,626,614

7,528,626,614

Taka

Statutory
reserve

1,511,486,306

1,503,518,556

(7,967,750)

1,511,486,306

1,511,486,306

Taka

Revaluation
reserve

109,193,803

441,469,626

Director

Director

441,469,626

622,833,216

(290,557,394)

109,193,803

109,193,803

Taka

Revaluation
gain / loss on
investments

These financial statements should be read in conjunction with the annexed notes 1 to 51.

10,293,486,160

Currency translation differences

Balance as at 31 December 2013

Surplus / deficit on account of revaluation of investments

10,293,486,160

Adjustment of last year revaluation gain on investments

Balance as at 31 December 2014

10,293,486,160

2,241,230,396

Taka

Taka
10,293,486,160

Share
premium

Paid-up Capital

Surplus / deficit on account of revaluation of properties

Restated balance

Changes in accounting policy / Last year's profit

Balance as at 1 January 2014

Particulars

for the year ended 31 December 2014

Statement of Changes in Equity

4,513,294

5,086,036

5,086,036

572,743

4,513,294

4,513,294

Taka

F.C.
Translation
gain

(1,286,685,770)

2,392,899,827

23,354,497,923

572,743

622,833,216

(290,557,394)

(7,967,750)

23,029,617,108

23,029,617,108

Taka

Total

23,029,617,108

Managing Director

1,341,080,535

1,791,274,627 24,460,711,980

(656,019,965)

(1,286,685,770)

2,392,899,827

1,341,080,535

1,341,080,535

1,341,080,535

Taka

Retained
earnings

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
1.1 Prime Bank Limited
The Prime Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with
the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch
from April 17, 1995 under the license issued by Bangladesh Bank. Presently, the Bank has 140 (One Hundred Forty) branches including
18 (Eighteen) SME Centre/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong Port,
Chittagong. Out of the above 140 branches, 05 (five) branches are designated as Islamic Banking branch complying with the
rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5 (Five) subsidiaries Companies (3 Foreign
subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering (IPO) in 1999 and its shares were listed with Dhaka Stock
Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share.
1.1.1 Principal activities
The principal activities of the Bank are to provide all kinds of commercial banking services to customers through its
branches and SME centres/ branches in Bangladesh. The Bank also provides off-shore banking services through its 3
(Three) Off-shore Banking Units (OBU).
1.1.2 Off-shore Banking Units
The Bank obtained permission of Off-shore Banking Units vide letter no. BRPD(P)744(84)/2001-868 dated March 19, 2001.
The Bank commenced operation of its one unit from March 15, 2007. Presently the Bank has 3 (Three) Off-shore Banking
Units (OBU) located at Dhaka EPZ, Chittagong EPZ and Adamjee EPZ. The Off-shore Banking Units are governed under
the rules and guidelines of Bangladesh Bank. Separate financial statements of Off -shore Banking Units are shown in
Annexure-K.
1.2 The Bank has 5 (Five) Subsidiaries details of which are given at note no. 1.2.1 to 1.2.5.
1.2.1 Prime Bank Investment Limited
Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited incorporated as a public limited company
on April 27, 2010 with the registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no. C-84266/10,
dated April 28, 2010 which has commenced its business on the same date. Total of 299,999,994 shares (out of
300,000,000 shares) of Prime Bank Investment Limited are held by Prime Bank Limited and only 6 shares are held by 6
Senior Executives of Prime Bank Limited and Prime Bank Investment Limited. The main objectives of the company for
which it was established are to carry out the business of full-fledged merchant banking activities like issue management,
portfolio management, underwriting, corporate advisory services etc. Securities and Exchange Commission (SEC)
thereafter issued a full fledged merchant banking license in favor of Prime Bank Investment Limited, vide letter no. SEC/
Reg/MB/SUB/2010/03/208, dated June 02, 2010 with effect from June 01, 2010. Financial Statements of the company
are shown in Annexure-L.
1.2.2 Prime Bank Securities Limited
Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies
Act 1994 vide certificate of incorporation no. C-84302 /10. Prime Bank Securities Limited became member of Dhaka
Stock Exchange Limited and Chittagong Stock Exchange Limited for brokerage transaction vide Security Exchange
Commission certificate no. 3.1/DSE-219/2010/429, dated September 16, 2010 and 3.2/CSE-141/2010/239, dated August
31, 2010 respectively. Prime Bank Securities Limited commenced its operation from May 2011. The main objectives of
the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other
services as mentioned in the Memorandum and Articles of Association of the Company. Prime Bank Limited and Prime
Bank Investment Limited hold 95% and 5% share of Prime Bank Securities Limited respectively. Financial Statements of
the company are shown in Annexure-M.
1.2.3 Prime Exchange Co. (Pte) Limited, Singapore
Prime Exchange Co. (Pte) Ltd., a fully owned subsidiary company of Prime Bank Limited was incorporated in Singapore on January
06, 2006 and commenced its remittance business from July 08, 2006 under the remittance license issued by the Monetary
Authority of Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act (Chapter 187) with 1 (One)
branch located at 2A Desker Road, (2nd floor), Singapore 209549. In 2011, the Company has also opened another Branch located
at Jurong East Branch, Block: 134 #01-305 Jurong Gateway Road, Singapore 600134. The principal activities of the company are to
carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried on
or undertaken by remittance and exchange house. Financial Statements of the company are shown in Annexure-N.
1.2.4 PBL Exchange (UK) Limited
PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and
Wales under registration no. 7081093 dated November 19, 2009. The company is a wholly owned subsidiary of Prime
Bank Limited. The company commenced its operation on August 02, 2010 with 3 (three) Branches located at Brick Lane
of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick
Lane, London E1 6RF. Financial Statements of the company are shown in Annexure-O.

294

Notes to the Financial Statements


for the year ended 31 December 2014
1.2.5 PBL Finance (Hong Kong) Limited
PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong) Limited
was incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business
Registration no. 58197431 both dated April 7, 2011). PBL Finance (Hong Kong) Limited obtained Money Lending Licenses
# 307/2011 issued by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011
with one branch located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong. Financial Statements of
the company are shown in Annexure-P.
2.00 Significant accounting policies and basis of preparation of financial statements
2.1 Basis of accounting
2.1.1 Statement of compliance
The financial statements of the Bank and its subsidiaries (the "Group") have been made for the year ended on December
31, 2014 and are prepared under the historical cost basis, except for certain investments which are stated at fair/market
value and freehold land which are measured at revalued amount, in accordance with the First Schedule (Sec-38) of the
Bank Companies Act 1991 (as Ammended up to 2013), BRPD Circular # 14 dated June 25, 2003 and DFIM Circular # 11,
dated December 23, 2009, other Bangladesh Bank Circulars, Bangladesh Accounting Standards ("BAS") and Bangladesh
Financial Reporting Standards ("BFRS") adopted by the Institute of Chartered Accountants of Bangladesh ("ICAB"), the
Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges' listing regulations
and other laws & rules applicable in Bangladesh. In cases where the requirements of Bangladesh Bank differ with those
of BAS/BFRS, the requirements of Bangladesh Bank have been applied.
In addition to foregoing directives and standards, the operation of Islamic Banking Branches are accounted for in
accordance with Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic
Financial Institutions, Bahrain, and BRPD circular no-15, dated November 09, 2009. A separate balance sheet, profit and
loss account and a statement of profit paid on deposits are shown in Annexure-G and G(1) and the figures appearing in
the annexure have been incorporated in the related heads of these financial statements as recommended by the Central
Shariah Board for Islamic Banks in Bangladesh.
2.1.2 Basis of consolidation
The consolidated financial statements include the financial statements of Prime Bank Limited and its subsidiaries,
i.e. Prime Bank Investment Limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte) Limited, Singapore, PBL
Exchange (UK) Limited and PBL Finance (Hong Kong) Limited prepared at the end of the financial year.
The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard
(BAS)-27, "Separate Financial Statements" and Bangladesh Financial Reporting Standard (BFRS)- 10, "Consolidated
Financial Statements". The consolidated financial statements are prepared for the same financial year ended on
December 31, 2014.
Subsidiary
Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or
indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the
date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements
from the date that control effectively commences until the date that the control effectively ceases. Subsidiary companies
are consolidated using the purchase method of accounting. The overseas subsidiary companies i.e. Prime Exchange Co.
(Pte) Limited, Singapore, Prime Exchange (UK) Limited and PBL Finance (Hong Kong) Limited has a common financial
year ending December 31, 2014. The conversion policy of subsidiary companies is given below:

Particulars

Price

Prime Exchange Co.


(Pte) Ltd., Singapore

PBL Exchange
(UK) Ltd.

PBL Finance
(Hong Kong) Ltd.

For assets & liabilities

Closing price

58.88310

120.91510

10.04684

For income & expenses

Average price

60.06865

124.49635

10.03687

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss resulting
from transactions between Group are also eliminated on consolidation.

295

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
2.1.3

Use of estimates and judgments


In preparation of the financial statements management is required to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on a going concern basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
The most significant areas where estimates and judgments have been applied are to calculate provision for loans,
advances and investments as per Bangladesh Bank guidline.

2.1.4

Foreign currency transaction


a) Foreign currency
Items included in the financial statements of each entity in the group are measured using the currency of the primary
economic environment in which the entity operates, i e. the functional currency. The financial statements of the group and the
Bank are presented in BDT which is the Bank's functional and presentation currency.
b) Foreign currency translation
Foreign currency transactions are converted into equivalent BDT using the prevailing exchange rates on the dates of
respective transactions as per BAS-21, " The Effects of Changes in Foreign Exchange Rates". Foreign currency balances
held in US Dollar are converted into BDT at weighted average rate of inter-bank market as determined by Bangladesh
Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into
equivalent US Dollar at buying rates of New York closing of the previous day and converted into equivalent BDT.
Assets and liabilities & income and expenses of Off-shore Banking Units have been converted into BDT currency @ US$1
= Taka 77.9494 (closing rate as at 31st December 2014) and Tk.77.6135 (average rate which represents the year end).
c) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated
at rates mentioned in contracts. Contingent liabilities / commitments for letters of credit and letters of guarantee
denominated in foreign currencies are expressed in BDT terms at the rates of exchange prevailing on the balance sheet
date.
d) Translation gains and losses
The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on
the translation of net investment in foreign subsidiary.
e) Foreign operations
The results and financial position of the Groups operations whose functional currency is not Bangladeshi Taka are
translated into Bangladeshi Taka as follows:
i.

Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date.

ii.

Income and expenses in the income statement are translated at an average rate approximating the
rates at the year end;

iii.

Resulting exchange differences are recognized as a separate component of equity.

iv.

As per BAS 21, Foreign Currency Transactions, foreign currency denominated non-monetary items of the OBUs
are translated at historical rate, as the OBUs are considered as an integral part of the Banks operation not a foreign
operation due to specific regulations governing the OBU and its unique nature.

exchange

f) Consolidation of Financial Statements of foreign operations


Consolidation, foreign exchange differences arising from the translation of net investments in foreign entities, as well
as any borrowings are taken into capital reserve. When a foreign operation is disposed of, such currency translation
differences are recognized in the income statement as part of the gain or loss on disposal.
2.1.5

Statement of cash flows


Statement of cash flows have been prepared in accordance with the BRPD Circular No. 14, dated June 25, 2003 issued
by the Banking Regulation & Policy Department of Bangladesh Bank.

296

Notes to the Financial Statements


for the year ended 31 December 2014
2.1.6

Liquidity statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as
per the following basis [Annexure-I & I (1)]:
i.
Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis of their
maturity term;
ii. Investments are on the basis of their respective maturity;
iii. Loans and advances / investments are on the basis of their repayment schedule;
iv. Fixed assets are on the basis of their useful lives;
v. Other assets are on the basis of their realization / amortization;
vi. Borrowing from other Banks, financial institutions and agents, etc. are as per their maturity / repayment terms;
vii. Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors;
viii. Provisions and other liabilities are on the basis of their payment / adjustments schedule.

2.1.7

Reporting period
These financial statements cover one calendar year from 1st January to 31st December 2014.

2.1.8

Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realize the asset
and settle the liability simultaneously (note-9a, 14a.1, 25a, 26a.1).

2.2
2.2.1

Assets and basis of their valuation


Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and
highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank
management for its short-term commitments.

2.2.2

Loans, advances and lease / investments


a.

Loans and advances are stated in the balance sheet on gross basis.

b.

Interest / profit is calculated on a daily product basis but charged and accounted for on accrual basis. Interest / profit
on classified loans and advances / investments is kept in suspense account as per Bangladesh Bank instructions
and such interest / profit is not accounted for as income until realised from borrowers [note - 7a.9 (x)]. Interest /
profit is not charged on bad and loss loans / investments as per guidelines of Bangladesh Bank. Records of such
interest amounts are kept in separate memorandum accounts.

c.

Commission and discounts on bills purchased and discounted are recognized at the time of realization.

d.

Provision for loans and advances / investments is made on the basis of year-end review by the management
following instructions contained in Bangladesh Bank BCD Circular no. 34, dated November 16, 1989, BCD Circular
no. 20, dated December 27, 1994, BCD Circular no. 12, dated September 4, 1995, BRPD Circular no. 16, dated
December 6, 1998, BRPD Circular no. 9, dated May 14, 2001, BRPD Circular no.02, February 2005, BRPD Circular no.
09, August 2005, BRPD Circular no. 17, dated December 06, 2005, BRPD circular no.32, dated October 27, 2010,
BRPD Circular no.14, dated September 23, 2012, BRPD Circular no19, dated December 27, 2012, BRPD Circular no
05, dated May 29, 2013 and BRPD Circular no 16, dated November 18, 2014 . The rates of provision for loans and
advances / investments are given below:
Particulars
General provision on unclassified general loans and advances / investments
General provision on unclassified small enterprise financing

Rate
1%
0.25%

General provision on interest receivable on loans / investments

1%

General provision on unclassified loans / investments for housing


finance, loans for professionals to set-up business and loans to share business

2%

General provision on unclassified consumer financing other than housing finance, loan for
professionals and loans for BGs/MBs/SDs

5%

General provision on Special Mention Account (SMA) except Short Term Agriculture Loans

0.25%-5%

Specific provision on substandard loans and advances / investments

20%

Specific provision on doubtful loans and advances / investments

50%

Specific provision on bad / loss loans and advances / investments

100%

297

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

2.2.3

e.

Loans and advances / investments are written off to the extent that (i) there is no realistic prospect of recovery, and
(ii) against which legal cases are pending for more than five years as per guidelines of Bangladesh Bank. These write
off however will not undermine / affect the claim amount against the borrower. Detailed memorandum records for
all such write off accounts are meticulously maintained and followed up.

f.

Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.

Investments
All investment securities are initially recognised at cost, being fair value of the consideration given, including acquisition
charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield
method and are taken to discount income. The valuation method of investments used are:
Held to maturity (HTM)
Investments which have fixed or determinable payments, and are intended to be held to maturity, other than those that
meet the definition of held at amortized cost-others are classified as held to maturity. Investment (HTM)-BHBFC is shown
in the financial statements at cost price.
Held for trading (HFT)
Investments classified in this category are acquired principally for the purpose of selling or repurchasing -in short-trading
or if designated as such by the management. After initial recognition, investments are measured at fair value and any
change in the fair value is recognised in the statement of income for the period in which it arises. These investments are
subsequently revalued at current market value on weekly basis as per Bangladesh Bank Guideline. Revaluation gain has
been shown in revaluation reserve account & revaluation loss has been shown in Profit & Loss account.
Value of investments has been enumerated as follows :
Items

Applicable accounting value

Government treasury bills-HTM

Amortized value

Government treasury bills-HFT

Market value

Government treasury bonds-HTM

Amortized value

Government treasury bonds-HFT

Market value

Prize bond

At cost

BHBFCs-debenture

At cost

Investment in listed securities


These securities are bought and held primarily for the purpose of selling them in future or hold for dividend income. These
are reported at cost. Unrealized gains are not recognized in the profit and loss account. But provision for diminution in
value of investment is provided in the financial statements where market price is below the cost price of investments as
per Bangladesh Bank guideline (note-14a).
Investment in unquoted securities
Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of book
value over cost for determining the carrying amount of investment in unlisted securities.
Investments in subsidiary
Investment in subsidiaries is accounted for under the cost method of accounting in the Bank's financial statements in
accordance with the BFRS-10. Accordingly, investments in subsidiaries are stated in the Bank's balance sheet at cost, less
impairment losses (if any).
2.2.4

Property, plant and equipment


Property, plant & equipment are recognized if it is probable that future economic benefits associated with the assets will
flow to the Bank and the cost of the assets can be reliably measured.

298

a.

All fixed assets are stated at cost less accumulated depreciation as per BAS-16 Property, Plant and Equipment. The
cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to
its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

b.

The Bank recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item
will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets
have been put into operation, such as repairs and maintenance, is normally charged off as revenue expenditure in
the period in which it is incurred.

Notes to the Financial Statements


for the year ended 31 December 2014
c.

Revaluation of Land and Building: As per Bangladesh Accounting Standard (BAS-16) revaluation should be made
with sufficient regulatory compliance to ensure that the carrying amount does not differ materially from that which
would be determined using the fair value at the end of reporting period. The fair value of Land and Buildings is
usually determined from market based evidence by an appraisal that is normally undertaken by professionally
qualified Valuers. Therefore, any upward increases of the assets have positive impact on the capital adequacy of
the Bank (50% of the asset revaluation is considered as Tier-2 Supplementary Capital). With a view to qualify for
higher capital adequacy, the bank revalued its Land and Buildings upon complying with all regulatory requirements.

d.

Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets other than
vehicles, software and all fixed assets of ATM related on which straight line depreciation method is followed and no
depreciation is charged on land:
Category of fixed assets
Land

Nil

Buildings

2.50%

Furniture and fixtures

10%

Office equipments

20%

Library books

20%

Vehicles

20%

Category of fixed assets (ATM Assets)

2.2.5

Rate

Rate

Furniture and fixtures

10%

Office equipment

20%

e.

For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation
is charged up to the date of disposal.

f.

On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule
and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the
net book value of the assets and net sale proceeds.

g.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
have been capitalized as part of the cost of the asset as per BAS-23.

h.

Leasehold properties are recorded at present value of minimum lease payments or fair market value, whichever is
lower as per the provisions of BAS-17. The carrying value of leasehold properties is amortized over the remaining
lease term or useful life of leasehold property, whichever is lower.

Intangible assets
a.

An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset
will flow to the entity and the cost of the assets can be measured reliably.

b.

Software represents the value of computer application software licensed for use of the Bank, other than software
applied to the operation software system of computers. Intangible assets are carried at its cost, less accumulated
amortization and any impairment losses.
Initial cost comprises license fees paid at the time of purchase and other directly attributable expenditure that are
incurred in customizing the software for its intended use.

2.2.6

c.

Expenditure incurred on software is capitalized only when it enhances and extends the economic benefits of
computer software beyond their original specifications and lives and such cost is recognized as capital improvement
and added to the original cost of software.

d.

Software is amortized using the straight line method over the estimated useful life of 10 (ten) years commencing from
the date of the application. Software is available for use over the best estimate of its useful economic life.

Impairment of Assets:
The policy for all assets or cash-generating units for the purpose of assessing such assets for impairment is as follows:
The Bank assesses at the end of each reporting period or more frequently if events or changes in circumstances indicate that the
carrying value of an asset may be impaired, whether there is any indication that an asset may be impaired. If any such indication
exits, or when an annual impairment testing for an asset is required, the bank makes an estimate of the asset's recoverable
amount. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cashgenerating unit is considered as impaired and is written down to its recoverable amount by debiting to profit & loss account.
Fixed assets are reviewed for impairment whenever events or charges in circumstances indicate that the carrying amount
of an asset may be impaired.

299

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
2.2.7

Other assets
Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity and
such accounts may be quite insignificant in the overall financial condition of the Bank.

2.2.8

Securities purchased under re-sale agreement


Securities purchased under re-sale agreements are treated as collateralized lending and recorded at the consideration
paid and interest accrued thereon. The amount lent is shown as an asset either as loans and advances to customers or
loans to other banks.
The difference between purchase price and re-sale price is treated as interest received and accrued evenly over the life
of Repo agreement.

2.2.9

Receivables
Receivables are recognised when there is a contractual right to receive cash or another financial asset from another
entity.

2.2.10 Inventories
Inventories measured at the lower of cost and net realizable value.
2.2.11

Leasing
Leases are classified as finance leases whenever the 'terms of the lease' transfer substantially all the risks and rewards of
ownership to the lessee as per BAS-17 " Leases". All other leases are classified as operating leases as per BAS-17 "Leases".
The Bank as lessor
Amount due from lessees under finance leases are recorded as receivables at the amount of the Bank's net investment in
the leases (note-7a.2). Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate
of return on the bank's net investment outstanding in respect of the leases.
The Bank as lessee
Assets held under finance leases are recognised as assets of the Bank at their fair value at the date of acquisition or, if lower, at the
present value of the minimum lease payments (note-9a). The corresponding liability to the lessor is included in the balance sheet as a
finance lease obligation (note-14a.9). Lease payments are apportioned between finance charges and reduction of the lease obligation
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

2.2.12

Non-banking assets:
Non-banking assets are acquired on account of the failure of a borrower to repay the loan on time after receiving the
decree from the Court regarding the right and title of the mortgage property. The Bank has awarded ownership of the
mortgage properties according to the verdict of the Honorable Court in accordance with the section 33 (7) of Artharin
Adalat-2003. The value of Non-Banking Assets has been determined and reported in the financial statements on the
basis of valuation report of an Independent valuer named "M/S MSK Inspection Company Ltd." details of which is
presented in (note-11).

2.2.13 Reconciliation of inter-bank and inter-branch account


Accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no
material differences which may affect the financial statements significantly. Un- reconciled entries / balances in the case
of inter-branch transactions as on the reporting date are not material.
2.3

Share Capital
Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

2.3.1

Authorised Capital
Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles
of Association. Details are shown in note 15.1.

2.3.2

Paid up Capital
Paid up capital represents total amount of shareholders' capital that has been paid in full by the ordinary shareholders.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at
shareholders meetings. In the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders
and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in note 15.2.

300

Notes to the Financial Statements


for the year ended 31 December 2014
2.4

Statutory reserve
As per Bank Companies Act, the Bank requires to transfer 20% of its current year's profit before tax to statutory reserve
until such reserve equals to its paid up capital and we comply with this requirement.

2.5

Revaluation reserve
When an asset's carrying amount is increased as a result of revaluation, the increase amount should be credited directly
to equity under the head of revaluation surplus / reserve as per BAS-16: "Property, Plant and Equipment". The Bank
revalued its land and buildings during the year 2008 & 2013 which are absolutely owned by the Bank and the increased
amount was transferred to revaluation reserve account accordingly. The tax effects on revaluation gain are measured and
recognised in the financial statements as per BAS-12: Income Taxes.

2.5.1

Minority interest in subsidiaries


Minority interest in business is an accounting concept that refers to the portion of a subsidiary corporation's stock that
is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is always less
than 50% of outstanding shares, else the corporation would cease to be a subsidiary of the parent. Minority interest
belongs to other investors and is reported on the consolidated balance sheet of the owning company to reflect the
claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated
income statement as a share of profit belonging to minority shareholders.

2.5.2

Prime bank subordinated bond


Prime Bank issued unsecured non-convertible subordinated bond on 07 February 2010 after obtained approval from
Bangladesh Bank and Securities and Exchange Commission vide their letter # BRPD (BIC) 661 / 14B (P) /2009-319, dated
31 December 2009 and SEC / CI / CPLC-205 / 09 / 282, dated December 23, 2009 respectively. The Subordinated Bond
is counted towards Tier- II capital of the Bank. The bond shall bear interest @ Tk.11.50% per annum, payable semi annually
in arrear on 07 August and 07 February of each year.

2.5.3

Share premium
Share premium is the capital that the Bank raises upon issuing shares that is in excess of the nominal value of the shares.
The share premium may be applied by the Bank in paying up un-issued shares to be allotted to members as fully paid
bonus shares or writing-off the preliminary expenses of the Bank or the expenses of or the commission paid or discount
allowed on, any issue of shares or debentures of the Bank or in providing for the premium payable on the redemption
of any redeemable preference shares or of any debentures of the Bank. Share premium was shown in accounts after
deduction of income tax @ 3% on share premium as per finance Act-2010.

2.6

Contingent liabilities
A contingent liability is A possible obligation that arises form past events and the existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or
A present obligation that arises from past events but is not recognised because:
a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
b) the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of
resources embodying economic benefits is reliably estimated.
Contingent assets are not recognised in the financial statements as this may results in the recognition of income which
may never be realised.

2.7

Deposits and other accounts


Deposits by customers and banks are recognised when the Bank enters into contractual provisions of the arrangements
with the counter-parties, which is generally on trade date, and initially measured at the consideration received.

2.8

Borrowings from other banks, financial institutions and agents


Borrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from banks,
financial institutions and agents. These are stated in the balance sheet at amounts payable. Interest paid / payable on
these borrowings is charged to the profit & loss account.
Disclosures of borrowings against Repo are shown in notes- 6a.9 to 6a.10 and 47

301

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
2.9

Basis for valuation of liabilities and provisions

2.9.1

Provision for current taxation


Provision for current income tax has been made as per prescribed rate in the Finance Act, 2014 on the accounting profit
made by the Bank after considering some of the add backs to income and dis-allowances of expenditure as per income
tax laws in compliance with BAS-12 " Income Taxes".

2.9.2

Deferred taxation
Deferred tax is accounted for in accordance with BAS 12: "Income Taxes". Deferred tax normally results in a liability being
recognized within the Statement of Financial Position. BAS 12 defines a deferred tax liability as being the amount of
income tax payable in future periods. Deferred tax is recognized on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and
are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable
temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be
available against which deductible temporary differences, unused tax losses or unused tax credits can be utilized. Such
assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit. Deferred tax assets and liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the company intends to settle its current tax assets and liabilities on a net basis.

2.9.3

Benefits to the employees


The retirement benefits accrued for the employees of the Bank as on reporting date have been accounted for in
accordance with the provisions of Bangladesh Accounting Standard-19, "Employee Benefit". Bases of enumerating the
retirement benefit schemes operated by the Bank are outlined below:
a) Provident fund
Provident fund benefits are given to the permanent employees of the Bank in accordance with Bank's service rules.
Accordingly a trust deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone-5,
Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52), read with
the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 07,
1997. The Fund is operated by a Board of Trustees consisting six members (03 members from management and other
03 members from the Board of Directors) of the Bank. All confirmed employees of the Bank are contributing 10% of their
basic salary as subscription to the Fund. The Bank also contributes equal amount of the employees' contribution. Interest
earned from the investments is credited to the members' account on yearly basis.
b) Gratuity fund
The Bank operates a funded gratuity scheme on "Continuing Fund Basis", in respect of which provision is made annually
according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance
with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has
approved the Prime Bank Limited Employees' Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.03
5.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First
Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board
of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management)
of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for
the scheme as per BAS-19 Employees Benefit".
c) Welfare fund
Prime Bank's employees' welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes
to the Fund in accordance with Bank Service Rules. The Fund has been established to provide medical support and
coverage in the event of accidental death or permanent disabilities of the employees. Disbursement of loan from the
fund is done as per rules for employees' welfare fund. Retirement benefit are also provided from this fund.
d) Incentive bonus
10% of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is being
distributed among the employees based on their performance. The bonus amount is paid annually, normally in first
quarter of every following year and the costs are accounted for in the period to which it relates.

2.9.4

Other liabilities
Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest
payable, interest suspense, accrued expenses, obligation under finance lease etc. Other liabilities are recognised in the
balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance 1984 and internal policy of the
Bank.

2.9.5

Provision for liabilities


A provision is recognised in the balance sheet when the Bank has legal or constructive obligation as a result of a past
event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with
the BAS 37 "Provisions, Contingent Liabilities and Contingent Assets".

302

Notes to the Financial Statements


for the year ended 31 December 2014
2.9.6

Provision for Off-balance sheet exposures


Off-balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh
Bank guidelines. As per BRPD Circular # 14, dated September 23, 2012, banks are advised to maintain provision @1%
against off-balance sheet exposures (L/C and Guarantee) in addition to the existing provisioning arrangement.

2.9.7

Provision for nostro accounts


As per instructions contained in the circular letter no. FEPD (FEMO) / 01 / 2005-677 dated 13 September 2005 issued
by Foreign Exchange Policy Department of Bangladesh Bank, provision is to be maintained on the un-reconciled debit
balance of nostro account for more than 3 months as on the reporting date in these financials. Since there is no
unreconciled entries which are outstanding more than 3 months no provision has been kept in this regard.

2.10

Revenue recognition

2.10.1

Interest income (Conventional Banking)


In terms of the provisions of the BAS-18 "Revenue", the interest income is recognised on accrual basis. Interest on loans
and advances ceases to be taken into income when such advances are classified. It is then kept in interest suspense. After
the loans / investments is classified as bad, interest / profit ceases to apply and recorded in a memorandum account.
Interest/Profit on classified advances/investment is accounted for on a cash receipt basis.

2.10.2 Profit on investment (Islamic Banking Branches)


Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge /
compensation on classified investments is transferred to profit suspense account instead of income account.
2.10.3 Investment income
Interest income on investments is recognised on accrual basis. Capital gain on investments in shares is also included in
investment income. Capital gain is recognised when it is realised.
2.10.4 Fees and commission income
Fees and commission income arising on services provided by the Bank are recognised when those are realized.
Commission charged to customers on letters of credit and letters of guarantee is credited to income at the time of
transactions being recorded in the books of accounts.
2.10.5 Dividend income on shares
Dividend income on shares is recognised during the period when right to receive is established.
2.10.6 Interest paid and other expenses (Conventional Banking Branches)
In terms of the provisions of BAS-1 "Presentation of Financial Statements" interest and other expenses are recognised
on accrual basis.
2.10.7

Profit paid on deposits (Islamic Banking Branches)


Profit paid to mudaraba depositors is recognised on accrual basis as per provisional rate. However, the final profit is
determined and to be paid to the depositors as per Annexure-F.

2.10.8 Dividend payments


Interim dividend is recognised when they are paid to shareholders. Final dividend is recognized when it is approved by
the shareholders in AGM.
The proposed dividend for the year 2014 has not been recognized as a liability in the balance sheet in accordance with
the BAS-10 : Events After the Reporting Period.
Dividend payable to the Bank's shareholders is recognized as a liability and deducted from the shareholders' equity in the
period in which the shareholders' right to receive payment is established.
2.11

Risk management
Risk is inherent to the banking business and Bank adds shareholders value by converting opportunities into profit. The
Bank evaluates its opportunities in terms of risk-reward relationship. The risks that are taking by the Bank are reasonable,
controlled, within its financial resources and credit competence.
In Prime Bank, risk is managed through a clear organizational structure, risk management and monitoring process
that are closely aligned with the activities of the Banks risk management policy and process as well as in line with the
guidelines provided by the countrys central bank, Bangladesh Bank.
The Banks risk management policy and process is composed with all the structure, policies, process and strategies
within the Bank so that it does not conflict with other risk management policies.
The essential elements of an effective risk management framework are:
1.

Clearly defined roles and responsibilities to avoid conflict of interest between business lines.

2.

Developing a risk culture where everyone will understand the impact of risk before taking any business decision.

3.

Robust risk management and governance by the board for understanding the risks taken by the Bank for safety and
protection of the assets.

303

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

The risk management of the Bank covers following six core risk areas:

2.11.1

a.

Credit Risk

b.

Foreign Exchange Risk

c.

Asset Liability Management

d.

Money Laundering Risk

e.

Internal Control & Compliance Risk; and

f.

Information and communication technology

Credit risk
It arises mainly from lending, trade finance, leasing and treasury businesses. This can be described as potential loss arising
from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from
unwillingness of the counter party or decline in his / her financial condition. Therefore, the Banks credit risk management
activities have been designed to address all these issues.
The Bank has segregated duties of the officers / executives involved in credit related activities. A separate Corporate
Division has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with
the customers, marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval,
administration, monitoring and recovery functions have been segregated. For this purpose, three separate units have
been formed within the credit division. These are (a) Credit Risk Management Unit (b) Credit Administration Unit and
(c) Credit Monitoring and Recovery Unit. Credit Risk Management Unit is entrusted with the duties of maintaining asset
quality, assessing risk in lending to a particular customer, sanctioning credit, formulating policy / strategy for lending
operation, etc. Adequate provision has been made on classified loans / investments is shown in note-14a.3.
A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk assessment
includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of
the proposed credit facility, etc. The assessment process at Head Office starts at Corporate Division by the Relationship
Manager / Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority.
Credit approval authority has been delegated to the individual executives. Proposals beyond their delegation are
approved / declined by the Executive Committee and / or the Management of the Bank. Concentration of credit risk is
shown in note -7a. 4.
In determining Single borrower / Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit
is conducted at periodical intervals to ensure compliance of Banks and Regulatory polices. Loans are classified as per
Bangladesh Banks guidelines. Concentration of single borrower / large loan limit is shown in note-7a.8.

2.11.2

Foreign Exchange Risk


Foreign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates.
The risk is that adverse fluctuations in exchange rates may result in a loss in earnings. As per the guidelines of Bangladesh
Bank, Prime Bank Limited has developed a detailed Foreign Exchange Risk Management policies to minimize different
types of risks associated with foreign exchange transactions. The Bank has also developed different strategies to handle
foreign exchange risk by setting different types of limits and risk parameters to measure and monitor foreign exchange
risk exposure of the Bank.
The foreign exchange desk of treasury division is involved in foreign exchange dealing activities with different counterparts;
the treasury back office is engaged in transfer of funds and passing of the transaction entries in the books of accounts,
and the mid office is responsible for verification of the deals. All foreign exchange transactions are revalued at market rate
as per the directive of Bangladesh Bank. All Nostro Accounts are reconciled on a monthly basis and outstanding entries
beyond 30 days are reviewed by the management for its settlement.

2.11.3

Asset Liability Management


Banks are exposed to the several risks such as Liquidity Risk, Interest Rate Risk, Foreign Exchange Risk, Credit Risk and
Operational Risk etc. Monitoring and controlling of these risks is vital to the survival of a financial institution. Asset-Liability
Management is a tool to oversee whether different balance sheet risks are properly identified, appropriate policies and
procedures are well established to control and limit these risks.
Asset-Liability Committee (ALCO) reviews countrys overall economic position, the Banks liquidity position, key
performance ratios, interest rate risk, deposit and advance growth, cost of deposit & yield on advances, deposit & lending
pricing strategy and different forecasted balance sheet risks of the Bank.

2.11.4

Money Laundering Risk


Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and
control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.
If money laundering is done successfully, it allows the criminals to maintain control over their proceeds and ultimately
to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the
ambitions of the drug trafficker, the terrorist, the organized criminal, the insider dealer, the tax evader as well as the many
others who need to avoid the attention from the authorities that sudden wealth brings from illegal activities. By engaging
in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.

304

Notes to the Financial Statements


for the year ended 31 December 2014

Prime Bank Ltd (PBL) has implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the
Financing of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably designed
to comply with applicable laws and regulations. It is the policy of PBL to take all reasonable and appropriate steps to
prevent persons engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or
terrorist operations, from utilizing PBL products and services. PBL makes every effort to remain in full compliance with all
applicable AML and CFT laws, rules and standards in the jurisdictions in which it does business.
In order to facilitate compliance with AML and CFT requirements, PBL has appointed one of its Senior Executives as
the CAMLCO (Chief Anti-Money Laundering Compliance Officer) and a team of employees with experience on AML
and CFT requirements under law, as well as money laundering detection and prevention, to oversee PBL AML and CFT
program. PBL has developed and implemented written AML and CFT policies, procedures, internal controls and systems,
which include (but are not limited) a customer identification program and procedures; procedures to collect and
refresh, as appropriate, customer due diligence information; processes to assess risk; processes and systems to monitor
customer transactions and activity; processes and systems to identify and report suspicious activity; and, processes to
keep required records. PBL educates its all employees on AML and CFT requirements and activities and also subjects
its AML and CFT program to regular independent testing. PBL cooperates fully with law enforcement and regulatory
investigations and inquiries in identifying the criminals involve in Money Laundering and Terrorist Activities/Financing.
2.11.5

Internal Control & Compliance Risk


Internal control is fundamental to the successful operation and day-to-day running of a business and it assists the
bank in achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and
management processes, covering the banks entire range of activities and operations, and not just those directly related
to financial operations and reporting. Its scope is not confined to those aspects of a business that could broadly be
defined as compliance matters, but extends also to the performance aspects of a business.
Prime Bank Ltd has established a System of Internal Control, which is designed to manage all the risks of failure to
a reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable assurance of
effective & efficient operations covering all controls including financial & operational controls, reliability of the financial
information, compliance with applicable laws & regulations, adherence to management policies, safeguarding of Banks
Assets, prevention & detection of fraud & errors, and accuracy & completeness of the accounting records.
The Board of Directors of Prime Bank Ltd regularly reviews the effectiveness of internal control process through its Audit
Committee and Executive Committee and the Audit Committee plays an effective role amongst the Board of Directors,
Management, Shareholders, Depositors and develops an efficient, powerful and a safe Banking System. The committee
also performs a very important role for publishing Banks financial statements, developing an appropriate internal control
system and maintains an effective communication with internal and external Auditors. It significantly contributes in
controlling and monitoring various risks factors that arise from the business activities of the Bank. Board Audit Committee
reviews the actions taken on internal control issues identified in the reports prepared by the Internal & External Auditors
and Regulatory Authorities. It has active oversight on the internal audits independence, scope of work and resources and
it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual
audit plan and frequency of the internal audit activities.

2.11.6

Information and communication technology


The rapid development of information and communication technologies (ICTs) has effectively facilitated in reorganizing
business processes and streamlining the provision of its products and services in todays dynamic business environment.
Such adoption helps the bank to develop and maintain competitive advantage for ensuring banks profitability and
survivability in the market place. The competitive advantage often brings bank numerous benefits including fast business
transactions, increasing automation of business processes, improved customer service, and provision of effective
decision support in a timely manner. However, the adoption of ICT applications has also brought organizations risks
related to ICT such as strategic risk, financial risk, operational risk and technological risk. Risk management plays a critical
role in protecting the banks information assets. An effective risk management process is an important component of a
successful IT security program. ICT risk management is referred to as the essential process to aid enterprise achieving
the new business changes, future investment in information technology system, an increasing ICT threats and an
increasing dependence on delivering information in system.
In order to minimize and control these risks successfully, The Bank has developed and implemented ICT risk management
policies and strategies, strengthened ICT security infrastructure, acquired centralized real time security monitoring
system, implemented centralized hardware system with high availability facility and implemented Disaster Recover
Site (DRS), developed Business Continuity Plan (BCP) and human resource backup plan with segregation of duties for
different ICT tasks.

2.11.7

Liquidity risk
The object of liquidity risk management is to ensure that all foreseeable funding commitments and deposit withdrawals
can be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core
retail and corporate deposits and institutional balance (note - 13a). Management of liquidity and funding is carried out
by Treasury Department under approved policy guidelines. Treasury front office is supported by a very structured Mid
office and Back office. The Liquidity management is monitored by Asset Liability Committee (ALCO) on a regular basis. A
written contingency plan is in place to manage extreme situation.

305

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
2.11.8

Market risk
The exposure of market risk of the Bank is restricted to foreign exchange risk, interest rate risk and equity risk.
Foreign exchange risk
Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign exchange risk
of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments
and other remittance requirements. No foreign exchange dealing on Bank's account was conducted during the year.
Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification
of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Markto-Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly
basis and outstanding entry beyond 30 days is reviewed by the management for its settlement. The position maintained
by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank.
Interest rate risk
Interest rate risk may arise either from trading portfolio or non-trading portfolio. The trading portfolio of the Bank consists
of Government treasury bills of 28 days maturity. The short-term movement in interest rate is negligible or nil. Interest
rate risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset
Liability Committee (ALCO) monitors the interest rate movement on a regular basis.
Equity risk
Equity risk arises from movement in market value of equities held. The risks are monitored by Investment Committee
under a well designed policy framework. The market value of equities held was, however, lower than the cost price at the
balance sheet date (Annexure-B).

2.11.9

Reputation risk arising from money laundering incidences


Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of
money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head Office and Compliance
Officers at branches, who independently review the transactions of the accounts to verify suspicious transactions. Manuals for
prevention of money laundering have been established and transaction profile has been introduced. Training is continuously given
to all category of Officers and Executives for developing awareness and skill for identifying suspicious activities / transactions.

2.11.10 Operational risk


Operational risk may arise from error and fraud due to lack of internal control and compliance. Management through
Internal Control and Compliance Division controls operational procedure of the Bank. Internal Control and Compliance
Division undertakes periodical and special audit of the branches and divisions at the Head Office for review of the
operation and compliance of statutory requirements. The Audit Committee of the Board subsequently reviews the
reports of the Internal Control and Compliance Division.
2.11.11

Audit Committee Disclosures


The Audit Committee of the Board was duly formed by the Board of Directors of the Bank in accordance with the BRPD
Circular no. 11 dated October 27, 2013 of Bangladesh Bank.
Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 07, 2012 on Corporate
Governance, the current Committee is constituted with the following 5 (Five) members of the Board and the Bank hereby
has been compliant with the BRPD Circular no. 11, dated October 27, 2013.
Sl No.

Status with Bank

Status with Committee

i)

Prof. Ainun Nishat

Name

Independent Director

Chairman

ii)

Mr. M. A. Khaleque

Director

Member

iii)

Mr. Khandker Mohammad Khaled

Director

Member

iv)

Mr. Manzur Murshed

Independent Director

Member

v)

Prof. Dr. Mohammed Aslam Bhuiyan

Independent Director

Member

During the year 2014, the Audit Committee of the Board conducted 10 (Ten) meetings in which the important issues were
discussed / reviewed are presented in note no. 48.
2.11.12 Risk Management Committee Disclosures
The Board of Directors constituted with the following 5 (Five) members Risk Management Committee of the Board, the third
Committee of the Board besides the Executive Committee and the Audit Committee in consistence with Bank Company
(Amendment) Act 2013 and the Bank hereby has been compliant with the BRPD Circular no. 11, dated October 27, 2013.
Sl No.

306

Status with Bank

Status with Committee

i)

Mrs. Nasim Anwar Hossain

Name

Director

Chairman

ii)

Mr. Khandker Mohammad Khaled

Director

Member

iii)

Mr. Mafiz Ahmed Bhuiyan

Director

Member

iv)

Mrs. Salma Huq

Director

Member

v)

Mrs. Muslima Shirin

Director

Member

Notes to the Financial Statements


for the year ended 31 December 2014

The Risk Management Committee of the Board has formed soon after the Central Banks instruction issued in October 27, 2013.
The Committee conducted 4 (Four) meeting during the year where the following important issues were discussed / reviewed:

i) Determine risk management framework, policy formulation, supervision techniques and above all continuous training;

ii) Drawing appropriate TOR for the Committee in conformity with the Bank Company Act and Central Bank guidelines,
considering the objectives of the Committee, experience and professional personnel with proper job description to be
assigned the responsibilities;

iii) Constituted the Management Committee on core Risk Management. The Management Committee will use check list/
Questionnaires to ascertain the effectiveness of the mitigation of tools and gaps thereof and they will update the check
list / questionnaires and taking appropriate actions as and when required;

iv) Review the Stress Testing Report of the Bank

v) Recovery drives to be strengthened for negative shift of NPL categories. Management should also take appropriate
steps to bring the NPL ratio below 5% as suggested by Central Bank;

vi) ALCO should monitor the liquidity and FX risks to keep the shock at bare minimum;

vii) Management should get the rating done by the borrowers as per decision taken by the Board and quarterly report
should be submitted regarding the progress of rating to the Risk Management Committee of the Board;

vii) Review the Standard of Risk Governance.

ix) The Management Committee advised to incorporate of appropriate clause / provision in the relevant sanction advice
to the effect that Banks auditors / internal audit team would periodically visit for review of the operation of business under
its financing.

x) Review the Green Banking Policy of the bank

xi) Review the Regulatory & Internal Circulars related to ABP/IDBP payment.

xii) Submission of statements on ICAAP under SRP for the year 2013 for SRP-SREP dialogue.

xiii) Review the Risk based pricing for corporate borrowers

xiv) Compliance with payment card industry data security standard (PCIDSS)

xv) Review the information security departmental activities.

2.12

Earnings per share

Basic earnings per share

Basic earnings per share has been calculated in accordance with BAS 33 Earnings per Share which has been shown on
the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average
number of ordinary shares outstanding during the year.

Diluted earnings per share


No diluted earnings per share is required to be calculated for the year as there was no scope for dilution during the year
under review.

2.13

Events after the reporting period

Where necessary, all the material events after the reporting period have been considered and appropriate adjustment /
disclosures have been made in the financial statements.

2.14

Memorandum items

Memorandum items are maintained to have control over all items of importance and for such transactions where the
Bank has only a business responsibility and no legal commitment. Bills for collection, Stock of travellers cheques, savings
certificates, wage earners bonds and other fall under the memorandum items. However, Bills for Collection is shown
under contingent liabilities as per Bangladesh Banks format of reporting.

2.15

Related party transaction

Related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether
a price is charged. Detail of related parties transaction are given in note-49.

2.16

Information about business and geographical segments

Segmental information is presented in respect of the Groups business and of Prime Bank Limited.

Business segments

Business segments report consists of products and services whose risks and returns are different from those of other
business segments. These segments comprise Conventional Banking including Off-shore Banking Units, Islamic Banking,
Prime Bank Investment Limited and Prime Bank Securities Limited. Business segments report are shown in Annexure-H.

Geographical segments

Geographical segments report consists of products and services within a particular economic environment where risks and
returns are different from those of other economic environments. These segments comprise of Prime Bank Limited, Offshore Banking Units, Prime Bank Investment limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte.) Ltd, Singapore,
PBL Exchange (UK) Ltd. and PBL Finance (Hong Kong) Limited. Geographical segments report are shown in Annexure-H.

307

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the
management. Income, expenses, assets and liabilities are specifically identified with individual segments. Based on such
allocation, segmental balance sheet as on 31 December 2014 and segmental profit and loss account for the year ended
31 December 2014 have been prepared.

2.17

Compliance report on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS)

The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption of Bangladesh Accounting
Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). While preparing the financial statements, Prime
Bank applied all the applicable BAS and BFRS as adopted by ICAB. Details are given below:
BAS no

Status

Presentation of Financial Statements

Name of the BAS

Applied *

Inventories

Applied

Statement of Cash Flows

Applied

Accounting Policies, Changes in Accounting Estimates and Errors

Applied

Events after the reporting period

10

Applied

Construction Contracts

11

N/A

Income Taxes

12

Applied

Property, Plant and Equipment

16

Applied

Leases

17

Applied

Revenue

18

Applied

Employee Benefits

19

Applied

Accounting for Government Grants and Disclosure of Government Assistance

20

N/A

The Effects of Changes in Foreign Exchange Rates

21

Applied

Borrowing Costs

23

Applied

Related Party Disclosures

24

Applied

Accounting and Reporting by Retirement Benefit Plans

26

N/A **

Separate Financial Statements

27

Applied

Interests in Joint Ventures

31

N/A

Financial Instruments: Presentation

32

Applied *

Earnings per share

33

Applied

Interim Financial Reporting

34

Applied ***

Impairment of Assets

36

Applied

Provisions, Contingent Liabilities and Contingent Assets

37

Applied

Intangible Assets

38

Applied

Financial Instruments: Recognition and Measurement

39

Applied *

Investment Property

40

N/A

Agriculture

41

N/A

BFRS no

Status

First time adoption of Bangladesh Financial Reporting Standards

N/A

Share Based Payment

N/A

Business Combinations

N/A

Insurance Contract

N/A

Non-current Assets Held for Sale and Discontinued Operations

N/A

Exploration for and Evaluation of Mineral Resources

N/A

Financial Instruments: Disclosure

Applied

Operating Segments

Applied

Consolidated Financial Statements

10

Applied

Joint Arrangement

11

N/A

Name of the BFRS

308

Disclosure of Interest in other entities

12

N/A

Fair Value Masurement

13

Applied

N/A=Not Applicable

Notes to the Financial Statements


for the year ended 31 December 2014

* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are
different to BAS/BFRS, some of the requirements specified in these BAS/BFRSs are not applied. Refer below (note-2.18)
for such recognition and measurement differences that are most relevant and material to the Bank and the Group.
** This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants
in the plan. Therefore, it is not applicable for the Banks annual report as it is the employer and not the retirement benefit
plan itself.
*** The objective of BAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the
principles for recognition and measurement in complete or condensed financial statements for an interim period
and hence it is not applicable for annual financial statements. However, the Bank being a listed entity in Dhaka and
Chittagong Stock Exchanges regularly publishes Interim Financial Report complying with BAS 34.

New and amended standards adopted by the Bank and the Group

There are no new standards, amendments to standards and interpretations that are effective for the first time for the
financial year ended 31 December 2014 that have a significant impact on the Group and the Bank.

New and amended standards and interpretations not yet adopted by the Bank and the Group

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning from
1 January 2014 or later, and have not been applied in preparing these consolidated financial statements. None of these
is expected to have a significant effect on the consolidated financial statements of the Group and the Bank. Although
International Accounting Standards Board (IASB) has issued a new standard (IFRS 9) along with related amendments to
existing standards (IAS/BAS 32, 39) but none of these have been adopted and/or endorsed locally as BAS/BFRS and as
such any possible impact has not been determined.

2.18

Departures from BAS/BFRS

The consolidated financial statements of the Group and the financial statements of the Bank as at and for the period ended
31 December 2014 have been prepared under the historical cost convention except investments and in accordance with
the First Schedule (section 38) of the Bank Companies Act 1991, as amended by Bangladesh Bank (the Central Bank of
Bangladesh) through BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank Circulars, Bangladesh Financial
Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong
Stock Exchanges listing regulations. In case, any requirement of provisions and circulars issued by Bangladesh Bank
differs with those of other regulatory authorities, the provisions and circulars issued by Bangladesh Bank shall prevail.

As such the Group and the Bank have departed from those contradictory requirements of BFRSs in order to comply with
the rules and regulations of Bangladesh Bank which are disclosed below:

i) Investment in shares and Securities

BAS: As per requirements of BAS 39, investment in shares and securities generally falls either under at fair value through
profit and loss account or under available for sale where any change in the fair value (as measured in accordance with
BFRS 13) at the period-end is taken to profit and loss account or revaluation reserve respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are
revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should
be made for any loss arising from diminution in value of investment; otherwise investments are recognized at costs.

ii) Revaluation gain/loss on Government securities

BAS: As per requirement of BAS 39, where securities T-bills and T-bonds will fall under the category of held for trading,
any change in the fair value of held for trading assets is recognized through profit and loss account.

Securities T-bills designated as held to maturity are measured at amortized cost method and interest income is recognized
through the profit & loss account.

Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at period end any gains on revaluation
of securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and
any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and
loss account. Interest on HFT securities including amortisation of discount are recognised in the profit and loss account.
HTM securities which have not matured as at the balance sheet date are amortised at the period end and gains or losses
on amortisation are recognised in other reserve as a part of equity.

iii) Provision on loans and advances

BAS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of
impairment exists for financial assets that are individually significant. For financial assets are not individually significant,
the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012
and BRPD circular no. 05 dated 29 May 2013 a general provision at 0.25% to 5% under different categories of unclassified
loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for
sub-standard loan, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and
advances depending on the duration of overdue. Again as per BRPD circular no. 10 dated 18 September 2007, a general
provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in
line with those prescribed by BAS 39.

309

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

310

iv) Recognition of interest in suspense

BAS: Loans and advances to customers are generally classified as loans and receivables as per BAS 39 and interest
income is recognised through effective interest rate method over the term of the loan. Once a loan is impaired, interest
income is recognised in profit and loss account on the same basis based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans
are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest in
suspense account, which is presented as liability in the balance sheet.

v) Other comprehensive income

BAS: As per BAS 1 Other Comprehensive Income is a component of financial statements or the elements of Other
Comprehensive Income are to be included in a Single Comprehensive Income (OCI) Statement.

Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all
banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income
nor are the elements of Other Comprehensive Income allowed to include in a Single Comprehensive Income (OCI)
Statement. As such the company does not prepare the other comprehensive income statement. However elements of
OCI, if any, are shown in the statements of changes in equity.

vi) Financial instruments presentation and disclosure

In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently
from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 cannot
be made in the accounts.

vii) Repo transactions

BAS: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a
similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a deposit, and
the underlying asset continues to be recognized in the entitys financial statements. This transaction will be treated as loan
and the difference between selling price and repurchase price will be treated as interest expense.

Bangladesh Bank: As per BRPD guidelines, when a bank sells a financial asset and simultaneously enters into an agreement
to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is
accounted for as a normal sales transactions and the financial assets are de-recognized in the sellers book and recognized
in the buyers book.

viii) Financial guarantees

BAS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms
of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair value is
amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher
of this amortized amount and the present value of any expected payment when a payment under the guarantee has
become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14, financial guarantees such as L/C, L/G will be treated as Off-Balance Sheet items. No
liability is recognized for the guarantee except the cash margin.

ix) Cash and cash equivalent

BAS: Cash and cash equivalent items should be reported as cash item as per BAS 7.

Bangladesh Bank: Some cash and cash equivalent items such as money at call and on short notice, Treasury bills, Prize
bond are not shown as cash and cash equivalent. Money at call and on short notice presented on the face of the balance
sheet, and Treasury bills, Prize bonds are shown in Investments.

x) Non-banking asset

BAS: No indication of Non-banking asset is found in any BFRS.

Bangladesh Bank: As per BRPD 14, there must exist a face item named Non-banking asset.

xi) Cash flow statement

BAS: Cash flow statement can be prepared using either in direct method or in indirect method. The presentation is
selected to present these cash flows in a manner that is most appropriate for the business or industry. The method
selected is applied consistently.

Bangladesh Bank: As per BRPD 14, cash flow is the mixture of direct and indirect method.

xii) Balance with Bangladesh Bank: (CRR)

BAS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations
as per BAS 7.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

xiii) Presentation of intangible asset

BAS: Intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38.

Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14.

Notes to the Financial Statements


for the year ended 31 December 2014

xiv) Off-balance sheet items


BAS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement of disclosure of offbalance sheet items on the face of the balance sheet.

Bangladesh Bank: As per BRPD 14, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed
separately in face of balance sheet.

xv) Disclosure of appropriation of profit

BAS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.

Bangladesh Bank: As per BRPD 14, an appropriation of profit should be disclosed in the face of profit and loss account.

xvi) Loans and advance net of provision

BAS: Loans and advances should be presented net of provisions.

Bangladesh Bank: As per BRPD 14, provision on loans and advances are presented separately as liability and cannot be
netted off against loans and advances.

xvii) Recovery of written off loans

BAS: As per BAS 1 an entity shall not offset assets and liabilities or income and expenses, unless required or permitted by
an BFRS. Again recovery of written off loans should be charged to profit & loss account as per BAS 18.

Bangladesh Bank: As per BRPD 14, recoveries of amount previously written off should be adjusted with the specific
provision for loans and advances.

The financial statements of the Islamic banking branches have also been prepared as per Bank Companies Act 1991,
BFRSs and other prevailing laws and regulations applicable in Bangladesh.

xviii) Uniform accounting policy

BAS: As per para 19 of BFRS 10 a company shall prepare consolidated financial statements using uniform accounting
policies for like transactions and other event in similar circumstances.

The Bank made provision as per the Press release # BSEC/Mukhopatro/2011/1733 dated 31 December 2014 of Bangladesh
Securities and Exchange Commission, 20% provision has been made by Prime Bank Securities Limited while Prime
Bank Investment Limited made 50.00% provision on diminution in value of investments and 42.18% provision made on
impairment of client margin loan.

2.19

The Banks compliance with related pronouncements by Bangladesh Bank:

i) Internal Control

The objective of internal control is to ensure that management has reasonable assurance that (i) operations are effective,
efficient and aligned with strategy, (ii) financial reporting and management information is reliable, complete and timely
accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical values
including sustainability, and (iv) assets of the company are safeguarded and frauds & errors are prevented or detected.

Prime Bank Limited has established an effective internal control system whose primary aim is to ensure the overall control
of risks and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high
level risk culture among the personnel of the Bank, establish efficient and qualified operating model of the Bank, ensure
reliability of internal and external information including accounting and financial information, secure the Banks operations
and assets, and comply with laws, regulatory requirements and internal policies.

The Board of Directors of Prime Bank, through its Audit Committee, periodically reviews the effectiveness of Banks
internal control system covering all the material controls, including financial, operational and compliance controls, risk
management systems, the adequacy of resources, qualifications and experience of staff of the accounting and financial
reporting function, training programs, budget, etc. Board Audit Committee reviews the actions taken on internal control
issues identified by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal
audits independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance
Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities.

ii) Internal Audit

Internal Audit is the continuous and systematic process of examining and reporting on the activities of an organization
undertaken by the specially assigned staff(s). Internal Auditor works as the Eyes & Ears of the management. It may
therefore be used to bridge the gap between management & shop floor. It can assure the management that the Internal
Controls are adequate and in operations, the policies and systems laid down are being adhered to and accounting records
provided by the lower level are correct.

Internal Audit Mechanism is used as an important element to ensure good governance of PBL. Internal Audit Activity of
PBL is effective and it provides senior management with a number of important services. These include detecting and
preventing fraud, testing internal control, and monitoring compliance with own policies & procedures, applicable rules &
regulations, instructions/ guidelines of regulatory authority etc.

During the period 2014, ICCD conducted inspection on many of the Branches/ Divisions of Head Office of the Bank and
submitted reports presenting the findings of the audits/ inspections. Necessary control measures and corrective actions
have been taken on the suggestions or observations made in these reports. The reports or key points of the Reports have
also been discussed in the meetings of the Audit Committee of the Board and necessary steps have been taken according
to the decision of the said Committee for correct functioning of Internal Controls & Compliance.

311

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

iii) Fraud and Forgeries

The increasing wave of fraud and forgery cases in the banking sector in recent time calls for concerted steps in identifying ways
for reducing or preventing frauds and forgeries by analyzing the causes and effect of frauds and forgeries, and prescribing
effective control strategies for salvaging frauds in the banking sector. Prime Bank does always pay due attention on antifraud internal controls for prevention of fraud and forgery. The Bank has already implemented some strategies like Financial
Control Strategy, Personnel Control Strategy, Accounting Control Strategy, Credit Control Strategy, Cost Control Strategy,
Administrative Control strategy, Process Control Strategy etc. in order to strengthening the control system further. Although it
is not possible to eliminate all frauds because of the inherent limitations of Internal Control System, the Board of Directors and
Management have taken all the measures to keep the operational risk in a very minimum level. Internal Control and Compliance
Division (ICCD) assesses and evaluates the effectiveness of Banks anti-fraud internal control measures, recommends for further
improvement in implementation of aforesaid strategies and reports to the Bangladesh Bank on effectiveness of controls at
the end of each quarter following their prescribed format. During the year 2014, 5 (five) instances of frauds were identified and
reported to Bangladesh Bank. Total amount related to those frauds is Taka 27.98 lakh (approx) against which adequate provision
has been maintained in the books of accounts. Management is exerting their all-out efforts to recover the aforesaid amount.

2.20 Restatement

In order to comply with the para 21 of Bangladesh Financial Reporting Standard (BFRS-10) Consolidated Financial
Statements and Bangladesh Accounting Standards (BAS-8) Accounting Policies, Changes in Accounting Estimates and
Errors, it requires to restate the following items:
Particulars
Balance with other banks and financial institutions

Notes

Amount in Taka
31.12.2014

31.12.2013

01.01.2013

In Bangladesh
Previous balance

272,467,219

378,707,076

Add/(Less): Inter-company transaction

(8,566,603)

(11,839,367)

Restated balance:

370,140,473

239,695,022

1,331,769,386

709,510,273

1,466,724,570

1,331,769,385

1,079,650,746

1,706,419,592

3,144,775,578

2,552,122,357

2,798,965,983

(7,046,474)

(8,779,252)

3,144,775,578

2,545,075,883

2,790,186,731

27,556,891,987

26,525,056,611

27,294,077,412

Outside Bangladesh
Other assets

10

Previous balance
Add/(Less): Inter-company transaction
Restated balance:
Deposits and other accounts

251,534,389

13

Current / Al-wadeeah current deposits


Previous balance
Add/(Less): Inter-company transaction
Restated balance:

(2,597)

27,556,891,987

26,525,056,611

27,294,074,815

Bills payable

2,942,889,234

2,081,417,055

3,421,438,111

Savings bank / Mudaraba savings deposits

25,106,122,963

21,125,908,174

19,188,831,632

149,197,612,596

152,086,878,317

132,058,072,695

(8,566,603)

(11,836,771)

Term deposits / Mudaraba term deposits


Previous balance
Add/(Less): Inter-company transaction
Restated balance:
Other liabilities

152,078,311,714

132,046,235,924

201,810,693,554

181,950,580,482

18,881,002,879

16,071,268,524

14,095,474,132

(7,046,474)

(8,779,252)

18,881,002,879

16,064,222,050

14,086,694,880

26,742,389,739

25,014,184,593

26,979,335,910

5,855,120,347

6,085,186,554

26,742,389,739

30,869,304,940

33,064,522,464

14

Previous balance
Add/(Less): Inter-company transaction
Restated balance:
Off-balance Sheet exposures

149,197,612,596
204,803,516,780

21 & 21a

Acceptances and endorsements


Previous balance
Add: Margin
Restated balance:

312

Notes to the Financial Statements


for the year ended 31 December 2014
Particulars

Amount in Taka

Notes

31.12.2014

31.12.2013

01.01.2013

Letters of guarantee
Previous balance

61,408,149,593

54,276,988,409

42,846,572,774

1,161,150,850

1,184,550,356

61,408,149,593

55,438,139,259

44,031,123,130

20,698,448,178

19,359,031,049

28,353,752,325

1,526,926,409

2,248,420,445

20,698,448,178

20,885,957,458

30,602,172,770

9,262,180,366

9,104,975,230

10,007,661,530

116,518,903

87,103,659

9,262,180,366

9,221,494,133

10,094,765,189

Add: Margin
Restated balance:
Irrevocable letters of credit
Previous balance
Add: Margin
Restated balance:
Bills for collection
Previous balance
Add: Margin
Restated balance:
Other contingent liabilities

118,111,167,876

116,414,895,790

117,792,583,553

Particulars
Consolidated interest income / profit on investment

Notes

Amount in Taka
2014

2013

23

Prime Bank Limited


Prime Bank Investment Limited
Prime Bank Securities Limited

18,445,885,369

22,010,657,745

391,826,475

455,964,116

11,667,012

67,578,007

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

84,434,808

81,448,997

18,933,813,664

22,615,648,865

465,893,062

580,044,928

Less: Inter-company transactions


Previous balance
Additional balance
Restated balance

465,893,062

580,044,928

18,467,920,602

22,035,603,937

15,573,523,588

17,678,359,259

452,709,342

568,950,077

46,302,622

48,064,346

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

25,717,753

29,034,365

16,098,253,305

18,324,408,047

Consolidated interest / profit paid on deposits, borrowings, etc.


Prime Bank Limited
Prime Bank Investment Limited
Prime Bank Securities Limited

PBL Finance (Hong Kong) Limited

24

Less: Inter-company transactions


Previous balance

Additional balance

469,094,461

585,646,533

Restated balance

469,094,461

585,646,533

15,629,158,843

17,738,761,514

313

Annual Report 2014

Particulars
Consolidated other operating income
Prime Bank Limited

Notes

Amount in Taka
2014

2013

27
806,468,141

812,592,003

23,193,276

26,901,295

971,313

569,922

979,239

1,027,803

54,459,314

45,312,857

886,071,283

886,403,880

Additional balance

3,201,399

5,601,605

Restated balance

3,201,399

5,601,605

882,869,884

880,802,275

Prime Bank Investment Limited


Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

Less: Inter-company transactions


Previous balance

2.21
The financial statements were approved by the Board of Directors on 26 February 2015.
2.22 General

314

a) These financial statements are presented in Taka, which is the Banks functional currency. Figures appearing in these
financial statements have been rounded off to the nearest Taka.

b) The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided for in the books
of the Bank.

c) Figures of previous year have been rearranged whenever necessary to conform to current years presentation.

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Consolidated cash
i Cash in hand
Prime Bank Limited (note-3a.1)

2,340,059,101

2,683,867,027

Prime Bank Investment Limited

9,228

21,223

25,000

7,011

24,958,132

22,029,154

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

2,365,051,461

2,705,924,415

Prime Bank Limited (note-3a.2)

15,194,723,820

14,958,779,761

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

15,194,723,820

14,958,779,761

17,559,775,281

17,664,704,176

2,284,671,278

2,632,476,975

55,387,823

51,390,052

2,340,059,101

2,683,867,027

13,528,018,067

13,797,228,087

1,284,357,478

773,672,374

14,812,375,545

14,570,900,461

382,348,275

387,879,300

15,194,723,820

14,958,779,761

17,534,782,921

17,642,646,788

Prime Bank Securities Limited


Prime Exchange Co. Pte. Ltd., Singapore

ii Balance with Bangladesh Bank and its agent bank(s)

3a

Cash of the Bank

3a.1

Cash in hand
In local currency
In foreign currency

3a.2

Balance with Bangladesh Bank and its agent bank(s)


In local currency
In foreign currency

Sonali Bank as agent of Bangladesh Bank (Local currency)

Reconciliation statements regarding Bangladesh Bank balance are given Annexure-A-1


3a.3

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)


Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with
section 33 of Bank Companies Act, 1991 and MPD circular nos.01 & 02, dated June 23, 2014 and December 10, 2013 &
DOS circular no.1 dated 19 January 2014.
The Cash Reserve Requirement on the Banks time and demand liabilities at the rate of 6.5% has been calculated and
maintained with Bangladesh Bank and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory
Liquidity Ratio for Islamic banking , excluding CRR, on the same liabilities has also been maintained in the form of
treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both the reserves maintained by the
Bank are in excess of the statutory requirements, as shown below:

315

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014
a)

Cash Reserve Requirement


Required reserve

13,100,234,670

Actual reserve maintained (note-3a.2)

13,528,018,067

13,797,228,087

427,783,397

1,923,842,387

25,077,954,010

36,528,669,420

Surplus / (deficit)
b)

2013

11,873,385,700

Statutory Liquidity Ratio


Required reserve
Actual reserve maintained (note-3a.5)
Surplus / (deficit)
Total required reserve
Actual reserve held
Total surplus

74,077,853,175

73,799,812,639

48,999,899,165

37,271,143,219

38,178,188,680

36,528,669,420

87,605,871,241

73,799,812,639

49,427,682,561

37,271,143,219

Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained for the year 2013 in
accordance with section 33 of Bank Companies Act, 1991 and MPD circular nos. 05 dated December 01, 2010.
3a.4

Maturity grouping of cash


Payable on demand
Up to 1 month

4,434,548,251

5,769,261,088

Over 1 month but not more than 3 months

Over 3 months but not more than 6 months

Over 6 months but not more than 1 year

Over 1 year but not more than 5 years

13,100,234,670

11,873,385,700

17,534,782,921

17,642,646,788

Over 5 years
3a.5

Held for Statutory Liquidity Ratio


Cash in hand (note -3a.1)

2,340,059,101

2,683,867,027

Balance with Bangladesh Bank and its agent bank(s) (note-3a.2)

1,666,705,753

14,958,779,761

Government securities (note-6a.ii net off security used in ALS)

17,013,171,209

5,246,989,603

Government bonds (note-6a.ii)

53,052,917,111

48,905,409,848

1,994,766,400

Bangladesh Bank bills (note-6a.ii)


Debenture of HBFC (note-6a.ii)

5,000,000

10,000,000

74,077,853,175

73,799,812,639

Prime Bank Limited (note-4a.1)

258,877,340

244,165,129

Prime Bank Investment Limited

32,854,585

87,665,728

Prime Bank Securities Limited

14,949,084

134,757,244

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

306,681,009

466,588,101

34,213,790

96,447,627

272,467,219

370,140,473

4 Consolidated balance with other banks and financial institutions


In Bangladesh

Less: Inter-company transaction (restated)

316

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Outside Bangladesh
Prime Bank Limited (note-4a.2)

1,253,809,238

626,533,772

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

42,420,563

31,552,651

PBL Exchange (UK) Ltd.

27,004,332

36,333,566

8,535,253

15,090,284

PBL Finance (Hong Kong) Limited

1,331,769,386

709,510,273

1,604,236,605

1,079,650,746

4a Balance with other banks and financial institutions of the Bank


In Bangladesh (note-4a.1)
Outside Bangladesh (note-4a.2)

258,877,340

244,165,129

1,253,809,238

626,533,772

1,512,686,578

870,698,901

451,555

470,903

4a.1 In Bangladesh
Current account
Agrani Bank Ltd., Principal Branch, Dhaka
Agrani Bank Ltd., Purana Paltan Branch, Dhaka

91,859

93,129

Agrani Bank Ltd., Bhairab Bazar, Kishoregonj

6,000,000

2,500,000

Agrani Bank Ltd., Mirzapur Branch, Mirzapur

421,522

11,394,974

Agrani Bank Ltd., Takerhat Branch


AB Bank Ltd. Principal Branch, Dhaka
The City Bank Ltd, Dhaka
Dutch-Bangla Bank Ltd., Mirzapur Branch, Tangail

2,077

2,997,108

2,997,108

273,329

274,369

5,558,530

499,000

Exim Bank Ltd., Motijheel Branch, Dhaka

1,701,991

1,694,141

Islami Bank BD Ltd., Local Office, Dhaka

7,294,929

7,306,518

Islami Bank BD Ltd., Jhikorgacha


Janata Bank Ltd., Local Office, Dhaka
Janata Bank Ltd., Ishwardi Branch
Janata Bank Ltd., Corporate Branch, Bogra
National Bank Ltd., Rangpur Branch

195

483

63,395,674

93,554,383

335,461

75,014

717

1,292

45,665

45,665

Pubali Bank Ltd., Dhaka Stadium Branch, Dhaka

1,192,109

1,194,719

Rupali Bank Ltd. ,Motijheel Branch, Dhaka

3,117,664

3,123,755

6,062,379

59,884

Sonali Bank Ltd., Rangpur Branch


Sonali Bank Ltd., Sunamganj Branch

Sonali Bank Ltd., Local Office, Dhaka

7,091,261

7,130,137

729,105

688,232

Sonali Bank Ltd., Narayanganj


Sonali Bank Ltd., Fakirapool Branch, Dhaka

521,853

543,353

Sonali Bank Ltd., Faridpur Branch, Faridpur

34,548,014

32,824,908

Sonali Bank Ltd., Narsingdi Branch


Sonali Bank Ltd., Satkhira
Standard Chartered Bank, Bangladesh
United Commercial Bank Ltd., Principal Branch, Dhaka
Off-shore Banking Units
Uttara Bank Ltd., Local Office, Dhaka
Less: Off-shore Banking Units

2,415,682

3,515,663

472,015

3,294,338

7,444,042

7,446,192

288,300,173

347,658,546

173,341

174,841

440,638,250

528,561,547

288,300,173

347,658,546

152,338,077

180,903,001

317

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Special notice deposit accounts


Agrani Bank Ltd., Principal Branch, Dhaka

320,555

307,870

3,227

ICB Islamic Bank Ltd., Principal Office, Motijheel, Dhaka

14,334

14,334

ICB Islamic Bank Ltd., Sylhet

17,016

17,016

Dutch-Bangla Bank Ltd., Local Office

467,809

41,996,514

Janata Bank Ltd., Local Office, Dhaka

5,532,288

5,267,539

4,856

15,473,223

Agrani Bank Ltd., Takerhat Branch

National Bank Ltd., Narayanganj Branch, Dhaka


Sonali Bank Ltd., Bhairab Bazar, Kishoregonj
Social Islami Bank Ltd., Principal Branch, Dhaka

950

950

12,603

12,603

6,370,411

63,093,276

Savings accounts
Al Arafah Islami Bank Ltd., Dhaka

64,622

64,622

Bank Al Falah Ltd., Dhaka

36,595

36,595

Social Islami Bank Ltd., Principal Branch, Dhaka


Fixed deposits

67,635

67,635

168,851

168,852

100,000,000

100,000,000

258,877,340

244,165,129

75,324,652

319,322

4a.2 Outside Bangladesh (NOSTRO Accounts)


Current account
AB Bank Ltd., Mumbai, India
Banca Nazionale, del Lavoro, Rome, Italy

Bank of Bhutan Phuentsholing, Bhutan

5,480,696

2,180,840

The Bank of Tokyo Mitsubishi Ltd., Japan

4,370,045

3,235,755

SMBC, Tokyo, Japan

3,265,829

3,216,184

Citibank N.A., Mumbai, India

67,065

584,056

Citibank N.A., London , UK

36,487,520

4,527,980

Citibank N.A., New York, USA

87,228,607

8,797,334

Citibank N.A., New York, USA (Off-shore Banking)

183,578,934

159,786,208

Commerz Bank AG, Frankfurt , Germany (US$)

5,222,540

8,110,938

Commonwealth Bank of Australia, Australia

2,826,530

3,147,975

Commerz Bank AG, Frankfurt , Germany (EURO)

Deutsche Bank Trust Company Americas

Credit Suisse (First Boston), Switzerland

22,210,205

8,602,136

Habib American Bank, New York, USA

15,683,490

9,335,805

Habib Metropolitan Bank Ltd, Karachi

32,423,765

30,785,285

Habib Bank Ltd, Karachi

15,622,827

17,697,455

84,540,590

32,091,018

250,802,434

14,632,726

HDFC Bank Limited, Kolkata, India


HSBC Bank USA, New York, USA
HSBC Bank Middle East Ltd., Karachi, Pakistan

HSBC PLC, London, UK

14,736,883

HANA Bank, Seoul


ICICI Bank Ltd, Mumbai, India
Intesa Sanpaolo SPA, Milano, Italy
J. P. Morgan Chase Bank, New York
Korea Exchange Bank Seoul
Mashreq Bank PSC, New York, USA

318

672,653

570,635

29,956,770

24,531,556

546,234

828,466

32,633,551

4,723,254

6,194,466

3,311,468

25,668,495

6,989,715

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Outside Bangladesh (NOSTRO Accounts)


Current account
Mashreq Bank PSC, Mumbai, India

33,718,293

19,477,075

National Westminister Bank, London, UK

24,303,332

26,878,103

The National Commercial Bank, Jeddah

2,240,494

2,306,917

Nepal Bangladesh Bank Ltd., Kathmandu, Nepal

2,265,228

6,553,566

20,835,713

21,846,696

People's Bank, Colombo, Sri Lanka


Skandinaviska Enskilda Banken, Sweden
Sonali Bank, Kolkata, India

292,499

469,724

25,592,031

3,547,477

Standard Chartered Bank, Kolkata, India

72,954,547

25,255,331

Standard Chartered Bank, New York, USA

43,058,439

15,925,386

Standard Chartered Bank, Singapore

23,520,569

51,956,036

14,638,739

5,315,001

Standard Chartered Bank, Frankfurt, Germany


State Bank of India, Kolkata
The Bank of Nova Scotia, Toronto, Canada
Unicredito Italiano SPA, Milano, Italy

5,536,254

4,849,610

6,669,508

55,245,752

Wells Fargo Bank N. A. Newyork

56,056,726

18,581,484

Zuercher Kantonal Bank, Zurich

1,318,969

5,582,619

1,253,809,238

626,533,772

1,412,671,381

807,436,773

(Annexure -A)
4a.3 Maturity grouping of balance with other banks and financial institutions
Payable on demand
Up to 1 month

15,197

16,885

100,000,000

63,093,276

Over 3 months but not more than 6 months

Over 6 months but not more than 1 year

151,967

Over 1 year but not more than 5 years

Over 5 years

1,512,686,578

870,698,901

70,928,312,066

56,147,165,851

Over 1 month but not more than 3 months

5 Money at call and short notice


6 Consolidated investments
Government
Prime Bank Limited (note-6a)
Prime Bank Investment Limited
Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

70,928,312,066

56,147,165,851

Others
Prime Bank Limited (note-6a)
Prime Bank Investment Limited
Prime Bank Securities Limited

1,713,515,478

792,350,658

1,102,855,608

1,066,059,442

751,628,861

745,550,534

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

3,567,999,947

2,603,960,634

74,496,312,013

58,751,126,485

319

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

6a Investments of the Bank


i) Investment classified as per Bangladesh Bank Circular:
Held for trading (HFT)

37,415,148,103

18,428,655,503

Held to maturity (HTM)

33,511,975,163

37,722,234,948

Other securities

1,714,704,278

788,626,058

72,641,827,544

56,939,516,509

ii) Investment classified as per nature:


a) Government securities:
28 days treasury bills

91 days treasury bills

1,215,262,051

1,883,343,497

182 days treasury bills

6,396,833,170

502,226,451

364 days treasury bills

10,263,299,733

2,861,419,655

5 years treasury bills


30 days Bangladesh Bank bills

17,875,394,955

5,246,989,603

1,994,766,400

Government bonds:
Prize bonds
Government bonds (note-6a.2)

6,188,800

6,275,400

53,046,728,311

48,899,134,448

53,052,917,111

48,905,409,848

70,928,312,066

56,147,165,851

Treasury Bill amounting to Tk 862,223,745.84 was placed as lien against ALS from Bangladesh Bank on 31.12.2014
b) Other investments:
Debentures of HBFC-bearing interest rate @ 5.5% (note-6a.3)

5,000,000

Dhaka Bank Subordinated Bond interest rate @ 11.65% (note-6a.4)

171,430,361

171,430,361

National Bank Subordinated Bond interest rate @ 11.50% (note-6a.5)

129,063,111

161,328,889

Lanka Bangla Finance Zero coupon bond interest rate @ 11.50% (note-6a.6)

83,073,414

100,075,000

324,475,510

349,516,408

1,000,473,081

Orascom bond interest rate @ 13.50% (note-6a.7)


Shares (note-6a.8)
Reverse Repo

10,000,000

1,713,515,478

792,350,658

72,641,827,544

56,939,516,509

6a.1 Maturity grouping of investments


On demand

3,097,836,950

1,867,566,359

Over 1 month but not more than 3 months

17,270,237,935

12,748,348,547

Over 3 months but not more than 6 months

4,804,452,330

1,883,343,497

Over 6 months but not more than 1 year

4,311,998,542

2,065,293,139

Over 1 year but not more than 5 years

14,760,391,175

43,604,902

Up to 1 month

Over 5 years

320

28,396,910,612

38,331,360,065

72,641,827,544

56,939,516,509

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

6a.2 Government bonds


Name of the bonds
HTM
3 years T & T bonds
2 years Bangladesh Government Islami Investment Bonds

850,000,000

850,000,000

2,977,110,892

6,660,776,280

10 years Bangladesh Government treasury bonds (8.50%-11.80%)

18,668,730,600

20,241,917,363

15 years Bangladesh Government treasury bonds (8.69%-14.00%)

6,308,387,732

6,258,925,458

5 years Bangladesh Government treasury bonds (7.81%-9.66%)

20 years Bangladesh Government treasury bonds (9.10%-13.29%)

4,702,745,940

3,700,615,847

33,506,975,163

37,712,234,948

HFT
3 years T & T bonds
2 years Bangladesh Government treasury bonds (8.59%-10.98%)
5 years Bangladesh Government treasury bonds (7.86%-11.25%)

3,047,335,016

4,500,615,831

3,813,506,882

3,542,031,729

10 years Bangladesh Government treasury bonds (8.50%-12.22%)

5,094,520,690

1,974,301,041

15 years Bangladesh Government treasury bonds (11.70%-12.42%)

3,721,355,996

591,279,128

20 years Bangladesh Government treasury bonds (11.98%-12.48%)

3,863,034,563

578,671,771

19,539,753,148

11,186,899,500

53,046,728,311

48,899,134,448

6a.3 Debentures of Bangladesh House Building Finance Corporation - at redeemable value


Principal
Add: Accrued Interest

100,000,000

100,000,000

(95,000,000)

(90,000,000)

5,000,000

10,000,000

Opening balance

171,430,361

171,430,361

Add: Interest accrued during the year

19,805,000

19,805,000

Less: Redeemed up to 31 December 2014


Redeemable value
6a.4 Dhaka Bank Ltd. Subordinated Bond

Less: Principal redemption during the year

Less: Interest received during the year

(19,805,000)

(19,805,000)

Redeemable value

171,430,361

171,430,361

6a.5 National Bank Ltd. Subordinated Bond


Opening balance

161,328,889

201,661,111

18,134,222

22,667,778

Less: Principal redemption during the year

(32,000,000)

(40,000,000)

Less: Interest received during the year

(18,400,000)

(23,000,000)

129,063,111

161,328,889

Add: Interest accrued during the year

Redeemable value
6a.6 Lanka Bangla Finance Zerocoupon Bond
Opening balance
Add: Addition/purchase during the year
Add: Interest accrued during the year

82,599,807

473,607

Less: Principal redemption during the year

Less: Interest received during the year

83,073,414

Redeemable value

321

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

6a.7 Orascom Bond


Principal
Add: Interest accrued during the year
Less: Principal redemption during the year
Less: Interest received during the year

100,075,000

150,112,500

5,025,000

17,062,500

(100,000,000)

(50,000,000)

(5,100,000)

(17,100,000)

100,075,000

Redeemable value
6a.8 Investment in shares
Quoted
AB Bank Ltd.

47,632,736

39,201,794

Bank Asia Ltd.

24,429,908

24,429,908

BRAC Bank Ltd.

21,243,239

The City Bank Ltd.

29,538,943

29,538,943

DESCO

19,569,239

19,397,475

Dhaka Bank Ltd.

28,551,258

28,551,258

Eastern Bank Ltd.

37,410,456

37,410,456

20,380

20,380

Federal Insurance Company Bangladesh Ltd.


Jamuna Bank Ltd.

18,370,447

14,338,010

23,395,426

Lanka Bangla Finance Ltd.


Mutual Trust Bank Ltd.
National Bank Ltd.
One Bank Ltd.
Uttara Bank Ltd.

6,962,625

27,970,098

27,970,098

22,130,581

22,130,581

37,009,980

37,009,980

299,596,650

324,637,548

15,694,430

15,694,430

Unquoted as on 31 December 2014


Central Depository Bangladesh Limited (CDBL)
Investment in SWIFT
MSF
(Annexure -B)

4,184,430

4,184,430

5,000,000

5,000,000

24,878,860

24,878,860

324,475,510

349,516,408

6a.9 (i) Disclosure regarding outstanding Repo


Counterparty name
Bangladesh Bank

Agreement
date

Reversal date

30.12.2014

01.01.2015

Amount
743,665,000
-

Total

743,665,000

6a.9 (ii) Disclosure regarding outstanding Reverse Repo


Counterparty name

Agreement
date

Reversal date

Jamuna Bank Limited

29.12.2014

01.01.2015

Total

322

Amount
1,000,473,081
1,000,473,081

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Minimum
Outstanding
during the year

Maximum
outstanding
during the year

Daily average
outstanding
during the year

With Bangladesh Bank

183,770,000

7,905,000,000

442,907,438

With other Banks & FIS

1,576,648,070

1,576,648,070

4,319,584

From Bangladesh Bank

200,000,000

2,750,000,000

118,767,123

From other Banks & FIS

204,521,374

9,663,489,403

1,350,131,545

142,780,100,320

147,380,881,952

6,008,332,073

6,310,122,858

6a.10 Disclosure regarding Overall transaction of Repo and Reverse Repo


Counterparty name
Securities sold under Repo

Securities purchased under Reverse Repo

7 Consolidated loans, advances and lease / Investments


Prime Bank Limited (note-7a)
Prime Bank Investment Limited
Prime Bank Securities Limited

381,629,800

398,772,908

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

149,170,062,193

154,089,777,718

Less: Inter-company transactions

Consolidated bills purchased and discounted (note-8)

3,344,650,634

3,711,608,286

145,825,411,559

150,378,169,432

6,893,824,341

8,631,546,764

152,719,235,900

159,009,716,196

36,737,396,813

33,752,101,030

18,211,516,645

22,698,310,397

35,650,698,225

33,237,874,555

3,603,454,341

3,806,849,550

7,415,940,130

11,147,870,482

124,216,527

265,174,901

12,552,789,720

12,138,261,922

4,881,673,072

5,888,494,557

1,131,739,750

1,042,299,553

7a Loans, advances and lease / investments of the Bank


i) Loans, cash credits, overdrafts, etc.
Inside Bangladesh
Secured overdraft / Quard against TDR
Cash credit / Murabaha
Loans (General)
House building loans
Loans against trust receipt
Payment against document
Retail loan
Lease finance / Izara (note - 7a.2)
Credit card
SME loan

759,121,216

614,841,924

Hire purchase

6,166,006,210

7,950,577,640

Other loans and advances

15,545,547,671

14,838,225,441

142,780,100,320

147,380,881,952

142,780,100,320

147,380,881,952

Outside Bangladesh

323

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

ii) Bills purchased and discounted (note-8a)


Payable Inside Bangladesh
Inland bills purchased

3,058,777,247

4,376,377,482

1,527,774,826

1,831,500,795

4,586,552,073

6,207,878,277

147,366,652,393

153,588,760,229

Up to 1 month

30,925,806,865

34,355,437,436

Over 1 month but not more than 3 months

24,803,590,283

33,818,860,912

Over 3 months but not more than 1 year

52,909,983,172

46,707,588,279

Over 1 year but not more than 5 years

36,009,389,193

29,030,155,201

2,717,882,879

9,676,718,401

147,366,652,393

153,588,760,229

Payable Outside Bangladesh


Foreign bills purchased and discounted
Please see note-14a.6

7a.1 Residual maturity grouping of loans, advances and lease / investments


including bills purchased and discounted
Repayable on demand

Over 5 years

7a.2 Lease finance / Izara


Lease rental receivable within 1 year

336,799,649

527,936,859

Lease rental receivable within 5 years

4,299,112,110

8,682,621,264

1,063,047,630

391,065,600

5,698,959,388

9,601,623,723

817,286,316

3,713,129,166

4,881,673,072

5,888,494,557

87,831,186,862

90,930,470,525

Lease rental receivable after 5 years


Total lease / Izara rental receivable
Less: Unearned interest receivable
Net lease / Izara finance
7a.3 Loans, advances and lease / investments under the following broad categories
Loans
Cash credits
Overdrafts
Bills purchased and discounted (note-8)

324

18,211,516,645

22,698,310,397

36,737,396,813

33,752,101,030

142,780,100,320

147,380,881,952

4,586,552,073

6,207,878,277

147,366,652,393

153,588,760,229

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

7a.4 Loans, advances and lease / investments on the basis of significant


concentration including bills purchased and discounted.
a) Loans, advances and lease / investments to Directors of the Bank

b) Loans, advances and lease / investments to Chief Executive and


other senior executives

1,854,730,519

1,865,934,020

31,618,811,445

11,908,593,920

c) Loans, advances and lease / investments to customer groups:


i) Commercial lending
ii) Export financing

7,522,730,824

3,732,411,949

iii) House building loan

3,603,454,341

3,806,849,550

iv) Retail loan


v) Small and medium enterprises
vi) Special program loan
vii) Staff loan
viii) Industrial loans / investments detail (note-7a.4 d)
ix) Other loans and advances (SOD)

12,552,789,720

12,138,261,922

20,054,785,565

19,532,373,794

1,330,547,279

8,962,095

7,509,737

66,304,300,432

84,023,601,882

2,515,540,173

16,573,223,455

145,511,921,874

151,722,826,209

147,366,652,393

153,588,760,229

i) Agricultural industries

1,994,050,047

1,691,360,795

ii) Textile industries

6,070,725,733

7,477,767,779

d) Details of Industrial loans / investments

iii) Food and allied industries

4,356,321,717

5,819,255,353

iv) Pharmaceutical industries

761,551,074

2,303,534,065

v) Leather, chemical, cosmetics, etc.

707,533,596

1,310,169,543

vi) Tobacco industries

748,929,479

750,806,206

vii) Cement and ceramic industries

3,624,965,032

4,702,298,898

viii) Service Industries

15,611,991,380

4,910,682,968

ix) Transport and communication industries


x) Other industries including bills purchase and discounted

5,139,792,413

7,757,516,825

27,288,439,961

47,300,209,450

66,304,300,432

84,023,601,882

108,095,013,290

109,175,984,414

23,268,148,497

27,743,849,035

7a.5 Loans, advances and leases / investments -geographical location-wise


Inside Bangladesh
Urban
Dhaka Division
Chittagong Division
Khulna Division

5,880,071,007

6,422,469,216

Rajshahi Division

4,141,205,976

4,604,585,904

Barisal Division

111,647,769

142,885,592

Sylhet Division

1,551,503,515

1,743,916,954

Rangpur Division

836,669,471

517,279,364

143,884,259,526

150,350,970,479

Rural
Dhaka Division
Chittagong Division

1,722,496,792

1,712,691,772

785,355,167

689,955,890

Khulna Division

64,859,403

143,815,669

Rajshahi Division

587,730,942

462,949,214

Sylhet Division
Outside Bangladesh

321,950,563

228,377,205

3,482,392,867

3,237,789,750

147,366,652,393

153,588,760,229

325

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

7a.6 Sector-wise loans, advances and lease / investments including bills purchased and discounted
Public sector

59,912,330

Co-operative sector
Private sector

7,960,394

147,306,740,063

153,580,799,835

147,366,652,393

153,588,760,229

119,143,801,725

132,454,115,539

311,203,980

2,118,339,891

7a.7 Details of pledged collaterals with the Bank


Collateral of movable / immovable assets
Local banks and financial institutions guarantee
Government guarantee
Foreign banks guarantee
Export documents
Fixed deposit receipts

15,864,992

2,681,663,312

3,636,471,239

3,245,988,405

4,683,447,951

FDR of other banks

118,678,100

238,650,747

Government bonds

372

24,166,735

Personal guarantee

8,577,141,544

5,883,313,924

Other securities

13,272,309,962

4,550,254,203

147,366,652,393

153,588,760,229

7a.8 Details of large loans, advances and lease / investments


Number of clients with outstanding amount and classified loans / investments exceeding 10% of total
capital of the Bank. Total capital of the Bank was Taka 27,312.77 million as at 31 December 2014 (Tk. 26,495.44
million in 2013).
Number of clients

25

Amount of outstanding advances / investments


Amount of classified advances / investments

202,696,000

Measures taken for recovery

Name of clients

Outstanding
(Tk. in million)
Funded

Non-funded

63,403,731,000
Nil

Negotiation
under in Process

Not Applicable

Total
(Tk. in million)

Total
(Tk. in million)

Abdul Monem Group

Ananta Garments Group

1,862.61

450.20

1,607.00

2,057.20

2,286.01

1,400.50

534.40

1,934.90

1,087.15

1,330.50

1,894.60

3,225.10

2,419.59

Ananta Apparel Group


Abul Khair Group
Babylon Group
Bangladesh Rural Advancement
Committee
Bulk Trade Group
City Group
Corolla Corp (BD) Ltd.
Confidence Group
ENA Group
Energypac Group
J.K.Group
Hameem Group
Kabir Group

1,594.85

978.20

978.20

438.65

531.10

1,533.70

2,064.80

2,585.39
2,337.24

809.60

1,182.30

1,991.90

1,780.73

2,788.38

141.10

318.70

459.80

569.15

1,580.67

409.20

657.70

1,066.90

2,208.80

1,243.60

3,452.40

1,886.78

KDS Group

780.10

577.00

1,357.10

MAX Group

443.60

1,887.00

2,330.60

2,451.93

Meghna Group

1,360.20

4,588.80

5,949.00

6,209.44

Mir Group

1,057.30

301.10

1,358.40

1,109.57

690.90

561.00

1,251.90

1,347.10

Molla Group

326

30

61,404,100,000

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Details of large loans, advances and lease / investments


Nasir Group
Noman Group
Prime Bank Investment Ltd
Project Builders Ltd.
Pakiza Group
RAK Group
Saad Musa Group
Square Group
Standard Group
Summit Group
Tamishna Group
TK Group
Toma Group
Unique Group

2,157.20
1,962.70
2,973.60
2,399.20
1,301.80
2,161.90
1,349.00
287.60
338.30
3,642.20
413.80
30,600.40

291.90
616.70
975.90
562.80
250.70
438.90
957.60
2,324.30
3,972.70
2,547.10
30,803.70

2,449.10
2,579.40
2,973.60
3,375.10
1,864.60
2,412.60
1,787.90
1,245.20
2,662.60
7,614.90
2,960.90
61,404.10

2,054.09
2,094.08
3,373.60
4,034.22
2,463.72
2,830.39
1,316.43
1,991.73
1,260.54
1,972.20
1,947.77
2,119.42
1,610.29
63,403.73

The bank complies with the requirement of the section 26 (b) of the banking companies Act 1991 as amendment in 2013
in connection to the general limitations of credit line.
The information related to large loan is presented according to the BRPD circular 14 dated June 25, 2003 and rearrange
the comparative information
7a.9 Particulars of loans, advances and lease / investments
i) Loans / investments considered good in respect of which the Bank is fully secured
ii) Loans / investments considered good against which the Bank holds no
security other than the debtors' personal guarantee
iii) Loans / investments considered good secured by the personal undertaking
of one or more parties in addition to the personal guarantee of the debtors
iv) Loans / investments adversely classified; provision not maintained there against
v) Loans / investments due by directors or officers of the banking company or any
of them either separately or jointly with any other persons (note-7a.4b+7a.4c.vii)
vi) Loans / investments due from companies or firms in which the directors of
the Bank have interest as directors, partners or managing agents or in case
of private companies, as members
vii) Maximum total amount of advances / investments, including temporary
advances made at any time during the year to directors or managers or
officers of the banking company or any of them either separately or jointly
with any other person.
viii) Maximum total amount of advances / investments, including temporary
advances / investments granted during the year to the companies or firms
in which the directors of the banking company have interest as directors,
partners or managing agents or in the case of private companies, as
members
ix) Due from banking companies
x) Classified loans and advances / investments
a) Classified loans and advances / investments on which interest
has not been charged (note-7a.10)
b) Provision on classified loans and advances / investments
(for details see note-14a.3 & 14a.5)
c) Provision kept against loans / investments classified as bad debts
d) Interest credited to Interest Suspense Account (note-14a.6)
xi) Cumulative amount of written off loans / investments
Opening Balance
Amount written off during the year
Amount realised against loans / investments previously written off
The amount of written off / classified loans / investments for which law suits
have been filed (note-7a.13)

138,441,662,321

116,535,874,451

2,697,014,628

7,798,673,512

6,227,975,444

29,254,212,265

147,366,652,393

153,588,760,229

1,863,692,614

1,873,443,756

1,863,692,614

1,873,443,756

11,214,642,962

7,814,501,727

4,586,296,479
3,796,912,946
2,722,214,058

3,733,047,125
3,184,620,754
1,913,098,167

5,519,757,834
2,122,934,300
7,642,692,134
202,683,654

2,979,164,346
2,540,593,488
5,519,757,834
6,064,168

17,739,148,578

12,702,465,814

327

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

7a.10 Classification of loans, advances and lease / investments


Unclassified
Standard including staff loan
Special mention account (SMA)

130,535,948,803

141,281,895,324

5,616,060,628

4,492,363,178

136,152,009,431

145,774,258,502

1,852,281,599

874,419,377

Classified
Sub-standard
Doubtful
Bad / Loss

1,268,158,259

1,054,568,739

8,094,203,104

5,885,513,611

11,214,642,962

7,814,501,727

147,366,652,393

153,588,760,229

1,739,048,000

1,687,252,207

7a.11 Particulars of required provision for loans, advances and lease / investments

Status

Base
for provision

Rate
(%)

136,152,009,431

*Various

General Provision
Loans/investments (Including SMA)
Interest receivable on loans/investments

641,454,035

6,414,540

5,237,694

1,745,462,540

1,692,489,901

*General provision is kept @ 1% on general loans and advances / investments and 0.25% on small enterprise financing,
2% on certain other types of lending and 5% on consumer financing.

Status

Base
for provision

Rate
(%)

Specific provision
Sub-standard

1,053,890,162

20

210,778,032

86,980,444

Doubtful

1,120,063,435

50

560,031,717

458,927,698

Bad / Loss

3,796,912,946

100

3,796,912,946

3,184,620,754

4,567,722,695

3,730,528,896

Required provision for loans, advances and lease / investments


Total provision maintained (note - 14, 14a3 & 14a.5)
Excess / (short) provision at 31 December 2014

6,313,185,236

5,423,018,797

6,336,963,297

5,433,236,415

23,778,061

10,217,618

7a.12 Particulars of required provision on Off-balance Sheet Exposures


Base
for provision
Acceptances and endorsements

267,423,897

308,693,049

Letter of guarantee

61,408,149,593

614,081,496

554,381,393

Letter of credit

20,698,448,178

206,984,482

208,859,575

Required provision on Off-balance Sheet Exposures


Total provision maintained (note - 14a.4)
Excess / (short) provision at 31 December 2014

328

26,742,389,739

Rate
1%

1,088,489,875

1,071,934,017

1,088,490,000

1,090,000,000

125

18,065,983

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

7a.13 Suits filed by the Bank (Branch wise details)


Agrabad Branch
Adamjee EPZ Branch

197,535,420

181,091,420

1,286,331

1,286,331

17,477,895

21,699,401

Ashulia Branch

7,028,374

10,944,530

Banani Branch

29,808,789

27,297,839

Bangshal Branch

31,309,540

26,595,540

Asad Gate Branch

Barisal Branch

545,085

545,085

Bashundhara Branch

7,290,747

7,412,477

Bhairab Bazar Branch

2,157,714

570,714

Biswanath Bracnh

319,700

5,105,996

736,361,692

Head Office, FMD & Card

33,324,152

24,302,502

Chaumuhani Branch

13,248,317

153,779

507,721

507,721

Cox's Bazar Branch

1,719,330

1,894,530

Dinajpur Branch

1,782,297

1,179,786

2,529,054,520

1,702,826,470

Bogra Branch

Court Road Branch

Elephant Road Branch


Fatickchari Branch
Faridpur Branch
Feni Branch
Foreign Exchange Branch
Ganakbari Branch
Garib-e-Newaz Branch
Gulshan Branch
Hajigonj Branch

1,150,000

187,000

187,000

226,081

1,028,601

176,209,687

171,871,396

800,000

800,000

326,495

326,495

111,393,494

93,893,494

277,365

277,365

Halishahar Branch

1,075,000

716,034

Hathazari Branch

9,439,029

8,973,879

IBB, Amberkhana Branch

19,633,392

9,632,100

IBB, Dilkusha Branch

26,740,776

26,740,776

IBB, Mirpur Branch

76,854,347

60,434,498

IBB, O.R. Nizam Road Branch

83,114,851

82,621,251

IBB, Pahartali Branch

15,499,110

15,499,110

Jamalpur Branch

311,000

Jatrabari Branch

1,918,013

1,130,421

912,410,130

6,046,580

2,293,964

2,293,964

Jessore Branch
Joypara
Joydevpur Chowrasta Branch

1,696,973

1,773,411,000

933,174,863

Kawran Bazar Branch

102,899,915

133,348,985

Khatunganj Branch

795,319,047

795,152,047

2,363,516,165

119,979,665

Jubilee Road Branch

Khulna Branch
Kishoreganj
Kustia Branch
Laldighi East Branch

84,755

4,257,716

2,100,403

1,021,859,621

412,745,500

Madhabdi Branch

2,937,003

2,937,003

Mirpur-1 Branch

12,028,175

7,987,830

6,165,056,254

6,113,652,133

Motijheel Branch
Mohakhali Branch
Mouchak Branch
Moulvibazar Branch, Dhaka

2,012,365

2,012,365

153,102,393

124,884,081

91,239,263

95,627,284

329

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Suits filed by the Bank (Branch wise details)


Mymensingh Branch

8,482,743

8,482,743

63,273,369

60,233,982

Narayanganj Branch

41,247,381

41,284,660

New Eskaton Branch

1,392,076

1,392,076

Oxygen More Branch

3,092,696

2,582,696

Pabna Branch

8,280,882

8,280,882

Pallabi Branch

4,448,836

3,290,751

Panthapath Branch

6,628,535

3,731,725

Pragati Sarani Branch

13,139,851

6,339,826

Naogaon Branch

Prabortak More Branch

3,258,862

2,053,082

314,953,333

314,731,333

Rangpur Branch

2,377,017

2,737,017

Retail Banking Division

8,392,261

61,580,105

50,477,613

Rajshahi Branch

Ring Road Branch


Sat Masjid Road Branch

51,744,782

49,638,430

Savar Branch

46,139,940

SBC Tower Branch

84,760,405

4,966,853

Simrail Branch

5,465,265

5,465,265

SME Banking, Dhaka

57,202,183

43,796,199

Sremangal Branch

40,011,512

42,497,866

Sylhet Branch

25,395,848

20,537,350

Subidbazar Branch, Sylhet

32,078,626

31,151,126

Tangail Branch

857,583

857,583

Tajpur Branch

2,128,421

Tongi Branch

2,432,493

2,432,493

1,841,723

1,550,500

Uposhahar Branch, Sylhet


Uttara Branch

41,767,517

21,200,849

17,739,148,578

12,702,465,814

8 Consolidated bills purchased and discounted


Prime Bank Limited (note-8a)

4,586,552,073

6,207,878,277

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

2,307,272,268

2,423,668,487

6,893,824,341

8,631,546,764

3,058,777,247

4,376,377,482

PBL Finance (Hong Kong) Limited


8a Bills purchased and discounted
Payable in Bangladesh
Payable outside Bangladesh

1,527,774,826

1,831,500,795

4,586,552,073

6,207,878,277

8a.1 Maturity grouping of bills purchased and discounted


1,690,324,909

2,172,817,434

Over one month but less than three months

Payable within one month

1,812,860,923

2,895,891,748

Over three months but less than six months

1,050,338,299

1,116,986,582

Six months or more

330

33,027,942

22,182,513

4,586,552,073

6,207,878,277

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

9 Consolidated fixed assets including premises, furniture and fixtures


Prime Bank Limited (note-9a)

6,612,686,818

6,406,719,662

12,804,672

17,924,016

Prime Bank Securities Limited

2,628,471

6,155,630

Prime Exchange Co. Pte. Ltd., Singapore

3,649,221

6,145,266

14,596,992

16,945,051

Prime Bank Investment Limited

PBL Exchange (UK) Ltd.


PBL Finance (Hong Kong) Limited

2,286,942

2,869,448

6,648,653,116

6,456,759,073

Land

3,702,444,788

3,543,593,939

Building

1,649,581,248

1,474,637,827

9a Fixed assets including premises, furniture and fixtures of the Bank


Property, Plant & Equipment

Furniture and fixtures

818,405,134

768,205,298

1,440,363,793

1,306,112,866

321,433,375

319,950,486

1,805,129

1,746,017

7,934,033,467

7,414,246,433

31,690,384

31,690,384

Hardware & equipment

249,631,775

233,788,335

Furniture & fixtures

43,528,537

42,426,440

293,160,312

276,214,775

Furniture and fixtures

2,991,998

2,978,790

Office equipment and machinery

1,742,930

1,637,587

Office equipment and machinery


Vehicles
Library books

Leased property:
Leased vehicles
ATM

Off-shore Banking Units

Vehicles

Less: Accumulated depreciation

1,410,371

1,410,371

6,145,299

6,026,748

8,265,029,462

7,728,178,340

1,756,221,695

1,463,175,057

6,508,807,767

6,265,003,283

244,443,757

244,091,071

43,212,614

43,212,614

287,656,371

287,303,685

183,777,321

145,587,306

Intangibles assets
Software-core banking
Software-ATM
Cost of intangibles assets
Less: Accumulated amortization
Net book value at the end of the year (See annexure-C for detail)

103,879,050

141,716,379

6,612,686,818

6,406,719,662

The fixed assets recognised and measurements policy are described in note 2.2.4

331

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

10 Consolidated other assets


Prime Bank Limited (note-10a)
Less: Investment in Prime Bank Investment Limited (note-10a.5)
Less: Investment in Prime Bank Securities Limited (note-10a.5)

9,067,223,175

8,420,462,735

(2,999,999,940)

(2,999,999,940)

(712,500,000)

(712,500,000)

Less: PBIL investment in Prime Bank Securities Ltd.(below)

(37,500,000)

(37,500,000)

Less: Investment in PBL Exchange (UK) Ltd. (note-10a.5)

(56,352,624)

(56,352,624)

Less: Investment in Prime Exchange Co. Pte. Ltd., Singapore (note-10a.5)

(10,993,235)

(10,993,235)

Less: Investment in PBL Finance (Hong Kong) Limited (note-10a.5)

(34,365,722)

(34,365,722)

Less: Dividend of Prime Bank Investment Limited (note-10a)

Less: Interest receivable from PBL Finance (Hong Kong) Limited (restated)

(7,046,474)

(2,191,547,381)

(2,323,714,250)

3,023,964,273

2,237,990,490

Prime Bank Investment Limited (investment in PBSL)

37,500,000

37,500,000

Prime Bank Investment Limited

23,532,489

216,892,611

Prime Bank Securities Limited

51,482,825

44,668,080

Prime Exchange Co. Pte. Ltd., Singapore

4,800,033

4,780,278

Less: Due from Investment in PBL Finance (Hong Kong) Limited (note-10a)

PBL Exchange (UK) Ltd.


PBL Finance (Hong Kong) Limited

3,495,959

3,244,424

120,811,305

307,085,393

3,144,775,578

2,545,075,883

24,722,480

23,087,731

10a Other assets of the Bank


Stationery and stamps
Exchange adjustment account
Investment in subsidiary (note-10a.5)
Loan to Off-shore Banking Units
Due from Off-shore Banking Units
Loan to PBL Finance (Hong Kong) Limited
Prepaid expenses
Interest / profit receivable on loan (note-10a.1)
Interest receivable on Govt. securities
Advance deposits and advance rent

2,305,667

3,814,211,521

3,814,211,521

4,351,658,435

5,008,368,379

132,911,416

111,353,884

2,191,547,381

2,323,714,250

17,926,965

15,018,391

641,454,035

523,769,388

1,381,562,486

1,174,675,523

274,085,598

164,348,546

Prepaid expenses against house furnishing

8,202,887

7,072,019

Branch adjustments account

18,533,017

23,675,936

Migration account
Suspense account (note -10a.2)
Encashment of PSP / BSP

384,161,142

204,781,969

136,623,524

35,151,558

ATM

10,395,688

1,407,446

Credit card

115,268,108

92,196,123

Sundry assets ( note -10a.3)

46,222,676

17,352,333

13,551,793,026

13,540,184,998

4,484,569,851

5,119,722,263

9,067,223,175

8,420,462,735

Less: Off-shore Banking Units

10a.1 Interest / profit receivable: Amount represents interest / profit receivable on loans, advances and lease / investments,
interest on term placement, Government securities & foreign currency balance, etc.

332

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

10a.2 Suspense account includes TT / DD in transit, advance against Land/ Building, advance against new branch, advance
against TA/ DA, printing and stationery, postage, suspense- others, clearing adjustment account etc.
10a.3 Sundry assets
Protested Bills

18,304,367

29,931,566

(14,526,624)

Less: Write off during the year


Others

27,918,309

1,947,391

46,222,676

17,352,333

10a.4 Particulars of required provision for other assets


Rate
Purchase of credit card bills
Protested bills
Advance deposits and advance rent
Legal Expenses
Others

71,000,000

100%

71,000,000

71,000,000

18,304,367

100%

18,304,367

15,404,942

100%

1,212,244

1,874,748

50%

937,374

4,268,575

100%

4,268,575

Required provision for other assets


Total provision maintained (note - 14a.8)
Excess / (short) provision at 31 December 2014

94,510,317

87,617,186

94,538,648

88,338,648

28,332

721,462

2,999,999,940

2,999,999,940

712,500,000

712,500,000

10a.5 Investment in subsidiaries


Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore

10,993,235

10,993,235

PBL Exchange (UK) Ltd.

56,352,624

56,352,624

PBL Finance (Hong Kong) Limited

34,365,722

34,365,722

3,814,211,521

3,814,211,521

As per the provision of the Exchange Demutualization Act-2013 and in accordance with the Bangladesh Security Exchange
Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE) alloted total 72,15,106 ordinary
shares at a face value of Tk 10.00 each and Chittagong Stock Exchange Ltd. (CSE) alloted total 42,87,330 ordinary Shares at
face value of Tk 10.00 each against the Membership of DSE and CSE respectively. Out of the above DSE transferred 2,886,042
shares and CSE transferred 1,714,932 shares directly to the credit of the Beneficiary Owner's account of the company. The
remaining shares were credited to blocked accounts as per provisions of the Exchange Demutualization Act, 2013. As there is
no active market for shares of DSE and CSE, we have shown the value at original cost as investment.
11 Non-Banking Assets
Name of Parties

Possession date

M/s Rima Flour Mills

18.03.2014

M/s Ripon Motors

18.03.2014

124,438,400

51,902,240

176,340,640

The Bank has been awarded ownership of the mortgage properties of M/S Rima Flour Mills and M/S Ripon Motors
according to the verdict of the Honorable Court in accordance with the section 33(7) of Artharin Adalat-2003. An amount
of Tk.176,340,640/- is reported in the financial statements as Non -Banking assets. The value of Non-Banking Assets has
been determined on the basis of valuation report of an Independent valuer named M/S MSK Inspection Company Ltd.
12 Consolidated borrowings from other banks, financial institutions and agents
Prime Bank Limited (note-12a)

7,668,875,959

3,858,260,882

Prime Bank Investment Limited

3,387,911,205

3,788,934,831

371,066,787

338,010,202

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

11,427,853,951

7,985,205,915

Prime Bank Securities Limited

Less: Inter-company transactions

3,344,650,634

3,711,608,286

8,083,203,317

4,273,597,629

333

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

12a Borrowings from other banks, financial institutions and agents of the Bank
In Bangladesh (note-12a.1)

3,381,658,959

Outside Bangladesh (note-12a.2)

4,287,217,000

1,166,250,000

7,668,875,959

3,858,260,882

2,692,010,882

12a.1 In Bangladesh
Call deposits
PBL bond

2,500,000,000

2,500,000,000

Standard Chartered Bank, Bangladesh

4,354,922

1,968,953

NPSB Settlement

7,061,595

Repo of Treasury Bills

743,665,000

126,577,443

190,041,929

3,381,658,959

2,692,010,882

Refinance against SME loan from Bangladesh Bank


12a.2 Outside Bangladesh
The Bank of Maskat, OMAN
FMO, Netherlands

1,948,735,000

388,750,000

779,494,000

777,500,000

BANCA UBAE SPA, Italy


Commercial Bank of Qatar
International Finance Corporation

1,558,988,000

4,287,217,000

1,166,250,000

12a.3 Security against borrowings from other banks, financial institutions and agents
Secured (Treasury bills)
Unsecured

743,665,000

6,925,210,959

3,858,260,882

7,668,875,959

3,858,260,882

12a.4 Maturity grouping of borrowings from other banks, financial institutions and agents
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
Over 1 year but within 5 years
Over 5 years

755,081,517

1,968,953

2,338,482,000

1,166,250,000

4,575,312,443

2,690,041,929

7,668,875,959

3,858,260,882

13 Consolidated deposits and other accounts


Current deposits and other accounts
Prime Bank Limited (note-13a.1.c)

27,586,626,484

26,612,333,767

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

27,586,626,484

26,612,333,767

Less: Inter-company transactions

334

29,734,497

87,277,156

27,556,891,987

26,525,056,611

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Bills payable
Prime Bank Limited (note-13a.1.c)

2,942,889,234

2,081,417,055

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

2,942,889,234

2,081,417,055

25,106,122,963

21,125,908,174

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

Savings bank / Mudaraba savings deposits


Prime Bank Limited (note-13a.1.c)

PBL Finance (Hong Kong) Limited

25,106,122,963

21,125,908,174

149,202,091,888

152,087,482,186

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

Term / Fixed deposits


Prime Bank Limited (note-13a.1.c)

PBL Finance (Hong Kong) Limited


Less: Inter-company transactions (restated)

149,202,091,888

152,087,482,186

4,479,293

9,170,471

149,197,612,596

152,078,311,714

204,803,516,780

201,810,693,554

13a Deposits and other accounts of the Bank


Deposits from banks (note -13a.1.a)
Deposits from customers (note-13a.1.b)

3,269,109,409

3,220,015,044

201,568,621,160

198,687,126,138

204,837,730,569

201,907,141,182

13a.1 a) Deposits from Banks


Current deposits and other accounts

21,869,581

55,157,539

Savings bank / Mudaraba savings deposits

27,249,372

33,178,088

719,990,457

3,131,679,417

Special notice deposits


Fixed deposits

2,500,000,000

3,269,109,409

3,220,015,044

b) Customer Deposits
i) Current deposits and other accounts
Current / Al-wadeeah current deposits
Foreign currency deposits
Security deposits
Sundry deposits (note - 13a.2)
Less: Off-shore Banking Units

11,346,101,277

9,611,746,856

4,060,096,974

3,757,493,442

9,104,416

10,240,925

12,437,754,408

13,525,353,551

27,853,057,075

26,904,834,774

288,300,173

347,658,546

27,564,756,903

26,557,176,228

335

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

ii) Bills payable


Pay orders issued
Pay slips issued

2,901,951,106

2,034,158,732

3,950,619

4,228,790

Demand draft payable

36,668,259

42,595,454

Foreign demand draft

313,592

313,592

T. T. payable

4,720

119,720

Bill Pay ATM

938

767

2,942,889,234

2,081,417,055

25,078,873,591

21,092,730,086

Fixed deposits / Mudaraba fixed deposits

85,381,031,529

90,251,742,484

Special notice deposits

13,293,344,787

11,965,259,585

iii) Savings bank / Mudaraba savings deposits


iv) Term / Fixed deposits

Non resident Taka deposits


Scheme deposits

902,232,979

793,839,134

46,405,492,137

45,944,961,566

145,982,101,432

148,955,802,769

201,568,621,160

198,687,126,138

204,837,730,569

201,907,141,182

c) Deposits and other accounts


Current deposits and other accounts
Deposits from banks (note -13a.1.a)
Deposits from customers (note-13a.1.b.i)

21,869,581

55,157,539

27,564,756,903

26,557,176,228

27,586,626,484

26,612,333,767

Bills payable
Deposits from banks (note -13a.1.a)
Deposits from customers (note-13a.1.b.ii)

2,942,889,234

2,081,417,055

2,942,889,234

2,081,417,055

Savings bank / mudaraba savings deposits


Deposits from banks (note -13a.1.a)
Deposits from customers (note-13a.1.b.iii)

27,249,372

33,178,088

25,078,873,591

21,092,730,086

25,106,122,963

21,125,908,174

Term / Fixed deposits


Deposits from banks (note -13a.1.a)
Deposits from customers (note-13a.1.b.iv)

3,219,990,457

3,131,679,417

145,982,101,432

148,955,802,769

149,202,091,888

152,087,482,186

204,837,730,569

201,907,141,182

5,539,717,082

5,855,120,347

13a.2 Sundry deposits


F.C. held against back to back L/C
Sundry creditors

144,790,129

59,271,224

Risk fund and service charges (CCS and lease finance)

55,008,833

40,444,902

Sale proceeds of PSP / BSP

39,390,000

72,885,000

Margin on letters of guarantee

1,207,823,431

1,161,150,850

Margin on letters of credit

1,351,138,286

1,526,926,409

Margin on FDBP / IDBP, export bills, etc


Lease deposits
Interest / profit payable on deposits
Withholding VAT/Tax /Excise duty payable to Government Authority
Others

336

79,490,309

116,518,903

114,199,921

116,593,055

2,077,841,359

2,842,526,106

416,764,704

619,900,109

1,411,590,355

1,114,016,646

12,437,754,408

13,525,353,551

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014
13a.3 Payable on demand and time deposits
a) Demand deposits
Current deposits
Savings deposits (9%)
Foreign currency deposits (Non interest bearing)
Security deposits
Sundry deposits
Bills payable

b) Time deposits
Savings deposits (91%)
Fixed deposits
Special notice deposits
Deposits under schemes
Non resident Taka deposits

2013

11,367,970,858
2,259,551,067
3,771,796,801
9,104,416
12,437,754,408
2,942,889,234
32,789,066,784

9,666,904,396
1,901,331,736
3,409,834,896
10,240,925
13,525,353,551
2,081,417,055
30,595,082,558

22,846,571,896
87,881,031,529
14,013,335,244
46,405,492,137
902,232,979
172,048,663,784
204,837,730,569

19,224,576,438
90,251,742,484
15,096,939,002
45,944,961,566
793,839,134
171,312,058,624
201,907,141,182

2,022,588,387
3,269,109,409
8,344,684,894
3,771,796,801
187,429,551,077
204,837,730,569

2,789,570,000
3,220,015,044
6,369,399,824
3,409,834,896
186,118,321,418
201,907,141,182

35,780
710,933
17,343
764,057

117,090
268,276
278,310
1,015,432
5,034,420
6,713,528

21,869,581
92,048,513
2,500,000,000
655,191,315
3,269,109,409

55,157,539
346,346,029
2,818,511,476
3,220,015,044

30,818,341,049
52,232,350,268
29,123,967,930
48,594,967,734
37,855,340,887
764,057
198,625,731,926

31,263,902,485
58,915,442,556
32,818,144,014
22,402,309,920
51,199,196,580
6,713,528
196,605,709,083

13a.4 Sector-wise break-up of deposits and other accounts


Government
Deposit money banks
Other public
Foreign currency
Private

13a.5 Unclaimed deposits and valuables


Current deposits
Savings deposits
Demand Draft
SDR
Pay order
Sundry Deposit

13a.6 Maturity analysis of deposits


a) Maturity analysis of deposits from Banks
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
Over 1 year but within 5 years
Over 5 years but within 10 years
Over 10 years
b) Maturity analysis of customer deposits excluding bills payable
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
Over 1 year but within 5 years
Over 5 years but within 10 years
Over 10 years

337

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014
c) Maturity analysis of bills payable
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
Over 1 year but within 5 years
Over 5 years but within 10 years
Over 10 years

2013

2,942,889,234
2,942,889,234
204,837,730,569

2,081,417,055
2,081,417,055
201,907,141,182

Prime Bank Limited (note-14a)

17,944,881,561

15,073,785,652

Prime Bank Investment Limited

787,857,453

720,748,302

14 Consolidated other liabilities

Prime Bank Securities Limited

63,792,922

192,845,418

Prime Exchange Co. Pte. Ltd., Singapore

26,777,326

23,343,179

PBL Exchange (UK) Ltd.

29,721,778

38,735,149

PBL Finance (Hong Kong) Limited

27,971,839

21,810,824

18,881,002,879

16,071,268,524

Less: Inter-company transactions (restated)

7,046,474

18,881,002,879

16,064,222,050

3,560,736,089

2,019,648,273

14a Other liabilities of the Bank


Foreign currency held against EDF loan
Exchange equalization account (note - 14a.7)

Exchange adjustment account

795,021

Expenditure and other payables

114,717,427

78,636,660

Provision for bonus

240,797,211

202,107,180

3,624,186

Provision for income tax (note - 14a.1)

2,416,474,933

2,484,245,887

Deferred tax liability (note-14a.2)

1,034,821,220

1,319,653,470

90,117,676

120,567,836

700

Obligation under finance lease (note-14a.9)

Unearned commission on bank guarantee


Credit card
Provision for gratuity
Provision for off-balance sheet exposures (note-14a.4)
Provision for Off-shore Banking Units (note-14a.5)
Fund for employee welfare fund (EWF)
Fund for Prime Bank Foundation (PBF)
Provision for loans and advances / investments (note - 14a.3)
Provision for Interest receivable on loans and advances / investments
Provision for diminution in value of investments
Interest suspense account (note - 14a.6)
Provision for Impairement loss for investment in subsidiaries (note-39a)
Other liabilities
Other provision (note - 14a.8)

338

106,797,460

1,088,490,000

1,090,000,000

498,500,000

422,500,000

6,560,200

6,891,000

131,203,993

137,820,000

5,828,945,997

5,001,219,115

9,517,300

9,517,300

61,324,749

68,324,749

2,722,214,058

1,913,098,167

45,398,089

523,970

94,538,648

88,338,648

17,944,881,561

15,073,785,652

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

14a.1 Provision for income tax


Advance tax
Balance of advance income tax on 1 January
Paid during the year
Settlement of previous year's tax liability

13,058,306,084

11,196,053,006

1,247,770,954

1,862,253,078

14,306,077,038

13,058,306,084

15,542,551,971

13,926,551,971

Provision
Balance of provision on 1 January
Provision of previous year
Provision made during the year (note-40a)
Net balance at 31 December

1,180,000,000

1,616,000,000

16,722,551,971

15,542,551,971

2,416,474,933

2,484,245,887

1,319,653,470

1,052,920,593

7,967,750

266,732,877

* Corporate tax position of the bank is shown in annexure-D


14a.2 Deferred tax liability
Deferred tax liability
Balance as on 1 January
Add: Provision for revaluation of land and building (note-18)
Add: Addition / Adjustment during the year (note-40a)

(292,800,000)

Balance as on 31 December

1,034,821,220

1,319,653,470

14a.3 Provision for loans, advances and lease / investments


Movement in specific provision on classified loans / investments:
Provision held as on 1 January
Less: Fully provided debts written off during the year
Add: Recoveries of amounts previously written off
Add: Specific provision made during the year for other accounts
Add: Transferred from General Provision
Less: Provision no longer required

3,342,047,125

1,949,076,445

(2,122,934,300)

(2,540,593,488)

202,683,654

6,064,168

9,522,472

100,000,000

947,500,000

(9,522,472)

Add: Net charge to profit and loss account (note-39a)

2,643,500,000

2,980,000,000

Provision held as on 31 December

4,165,296,479

3,342,047,125

Movement in general provision on unclassified loans / investments


Provision held as on 1 January

1,659,171,990

1,964,671,990

Add: Amount transferred to classified provision

(109,522,472)

(947,500,000)

Add: General provision made during the year (note-39a)


Provision held as on 31 December

114,000,000

642,000,000

1,663,649,518

1,659,171,990

5,828,945,997

5,001,219,115

1,090,000,000

1,080,000,000

14a.4 Provision for off-balance sheet exposures


Provision held as on 1 January
Add: Amount transferred from classified provision
Add: Provision made during the year (note-39a)
Provision held as on 31 December

(1,510,000)

10,000,000

1,088,490,000

1,090,000,000

339

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

14a.5 Provision for Off-shore Banking Units


Movement in specific provision on classified loans / investments:
Provision held as on 1 January
Add: Transferred from Unclassified Provision of OBU
Add: Net charge to profit and loss account (note-39a)
Provision held as on 31 December

391,000,000

41,000,000

30,000,000

350,000,000

421,000,000

391,000,000

31,500,000

60,500,000

(41,000,000)

Movement in general provision on unclassified loans / investments


Provision held as on 1 January
Add: Amount transferred to classified provision of OBU
Add: General provision made during the year (note-39a)

46,000,000

12,000,000

Provision held as on 31 December

77,500,000

31,500,000

498,500,000

422,500,000

14a.6 Interest suspense account


Balance as on 1 January

1,913,098,167

620,359,575

Add: Amount transferred to interest suspense account during the year

2,932,771,293

1,853,144,443

Less: Amount recovered from interest suspense account during the year

(1,248,876,000)

(347,292,000)

Less: Amount written-off during the year


Balance as on 31 December

(874,779,402)

(213,113,851)

2,722,214,058

1,913,098,167

As per BRPD circular no. 14 dated September 23, 2012 as soon as any loan or advance is classified as 'Bad/Loss', charging
of interest in the same account will be ceased. But the existing banking software is consistently charging interest on the
classified loan accounts marked as bad and loss. Such interest against classified loans has been adjusted to loans and
advances and interest suspense account during the current year but the comparative figure could not be adjusted due
to impracticability of calculation of such accrued interest amount. However, we feel that the accrued interest amount is
not material in the context of financial position.
14a.7 Exchange equalization account
Balance as on 1 January

Less: Transfer during the year

Balance as on 31 December

14a.8 Other provision for classified assets


Balance as on 1 January

88,338,648

247,111,936

Add: Addition during the year (note-39a)

6,200,000

10,135,000

(168,908,288)

94,538,648

88,338,648

Within 1 year

3,721,693

Above 1 year but within 5 years

3,721,693

Less: Adjustment during the year


Balance as on 31 December
14a.9 Obligation under finance lease
Minimum lease rental payable

Less: Finance charge payable

340

97,507

3,624,186

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

25,000,000,000

25,000,000,000

300,000,000

300,000,000

8,838,212,760

8,838,212,760

1,155,273,400

1,155,273,400

10,293,486,160

10,293,486,160

30,000,000 ordinary shares of Taka 10 each issued for cash

300,000,000

300,000,000

883,821,276 ordinary shares of Taka 10 each issued as bonus shares

8,838,212,760

8,838,212,760

115,527,340 ordinary shares of Taka 10 each issued as right shares

1,155,273,400

1,155,273,400

10,293,486,160

10,293,486,160

15 Share capital
15.1 Authorized capital
2,500,000,000 ordinary shares of Taka 10 each
15.2 Issued, subscribed and fully paid up capital
30,000,000 ordinary shares of Taka 10 each issued for cash
883,821,276 ordinary shares of Taka 10 each issued as bonus shares
115,527,340 ordinary shares of Taka 10 each issued as right shares
15.2 Issued, subscribed and fully paid up capital

15.3 History of paid-up capital


Given below the history of raising of share capital of Prime Bank Limited:
Accounting year

Declaration

No of share

Value in capital

Cumulative

1995

Opening capital

10,000,000

100,000,000

1996

60% Bonus share

6,000,000

60,000,000

160,000,000

1997

25% Bonus share

4,000,000

40,000,000

200,000,000

1999

Initial Public Offer (IPO)

20,000,000

200,000,000

400,000,000

2000

25% Bonus share

10,000,000

100,000,000

500,000,000

2001

20% Bonus share

10,000,000

100,000,000

600,000,000

2002

16.67% Bonus share

10,000,000

100,000,000

700,000,000

2003

42.86% Bonus share

30,000,000

300,000,000

1,000,000,000

2004

40% Bonus share

40,000,000

400,000,000

1,400,000,000

2005

25% Bonus share

35,000,000

350,000,000

1,750,000,000

2006

30% Bonus share

52,500,000

525,000,000

2,275,000,000

2007

25% Bonus share

56,875,000

568,750,000

2,843,750,000

2008

25% Bonus share

71,093,750

710,937,500

3,554,687,500

2009

30% Bonus share

106,640,620

1,066,406,200

4,621,093,700

25% right share

115,527,340

1,155,273,400

5,776,367,100

2010

35% Bonus share

202,172,848

2,021,728,480

7,798,095,580

2011

20% Bonus share

155,961,911

1,559,619,110

9,357,714,690

2012

10% Bonus share

93,577,147

935,771,470

10,293,486,160

1,029,348,616

100,000,000

10,293,486,160

341

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

15.4 Group capital adequacy ratio (Consolidated)


In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no. 35 dated December 29,
2010, required capital of the Bank (Consolidated) at the close of business on 31 December 2014 was Taka 21,632,425,376 as
against available core capital of Taka 22,611,399,901 and supplementary capital of Taka 4,812,296,196 making a total capital
of Taka 27,423,696,097 thereby showing a surplus capital / equity of Taka 5,791,270,720 at that date. Details are shown below:
Core capital (Tier-I)
Paid-up capital (note-15.2)
Share premium (note-15.8)
Minority interest(note-15.9)
Statutory reserve (note-16)
General reserve
Surplus in consolidated profit and loss account / Retained earnings (note-20)

10,293,486,160
2,241,230,396
60
8,184,646,579
28,002,888
1,864,033,818
22,611,399,901

10,293,486,160
2,241,230,396
65
7,528,626,614
28,002,888
1,616,368,842
21,707,714,965

A) Total capital

1,663,649,518
1,088,490,000
77,500,000
230,897,400
751,759,278
1,000,000,000
4,812,296,196
27,423,696,097

1,659,171,990
1,090,000,000
31,500,000
67,835,681
755,743,153
1,500,000,000
5,104,250,824
26,811,965,789

Total assets including off-balance sheet exposures


B) Total risk weighted assets
C) Required capital based on risk weighted assets (10% on B)
D) Surplus (A-C)
Capital adequacy ratio

374,460,497,009
216,324,253,765
21,632,425,376
5,791,270,720
12.68%

361,921,928,348
222,791,428,514
22,279,142,851
4,532,822,938
12.03%

Supplementary capital (Tier-II)


General provision maintained against unclassified loan / investments (note-14a.3)
General provision on off-balance sheet exposures (note-14a.4)
General provision on off-shore Banking Units (note-14a.5)
Revaluation gain / loss on investments-50% of total (note-17)
Revaluation reserve for equity instruments-10% of market gain
Revaluation reserve-50% of total (note-18)
Prime Bank Sub-ordinated Bond
Exchange equalization account (note-14a.7)

Capital requirement
Tier - I
Tier - II
Total

Required
5%
5%
10.00%

Held
Required
10.45% 5%
2.23% 5%
12.68% 10.00%

Held
9.74%
2.29%
12.03%

Capital adequacy ratio (Solo Basis)


Core capital (Tier-I)
Paid-up capital (note-15.2)
Share premium (note-15.8)
Statutory reserve (note-16)
Surplus in consolidated profit and loss account / Retained earnings (note-20a)
Supplementary capital (Tier-II)
General provision maintained against unclassified loan / investments (note-14a.3)
General provision on off-balance sheet exposures (note-14a.4)
General provision on off-shore Banking Units (note-14a.5)
Revaluation gain / loss on investments-50% of total (note-17a)
Revaluation reserve-50% of total (note-18)
Prime Bank Sub-ordinated Bond
Exchange equalization account (note-14a.7)
A) Total capital
Total assets including off-balance sheet exposures
B) Total risk weighted assets
C) Required capital based on risk weighted assets (10% on B)
D) Surplus (A-C)
Capital adequacy ratio
Capital requirement
Tier - I
Tier - II
Total

342

Required
5%
5%
10.00%

10,293,486,160
10,293,486,160
2,241,230,396
2,241,230,396
8,184,646,579
7,528,626,614
1,791,274,627
1,341,080,535
22,510,637,762
21,404,423,705
1,663,649,518
1,088,490,000
77,500,000
220,734,813
751,759,278
1,000,000,000
4,802,133,609
27,312,771,370

1,659,171,990
1,090,000,000
31,500,000
54,596,901
755,743,153
1,500,000,000
5,091,012,044
26,495,435,749

373,023,367,945
214,891,840,014
21,489,184,001
5,823,587,369
12.71%

360,283,700,614
220,020,078,032
22,002,007,803
4,493,427,946
12.04%

Held
Required
10.48% 5%
2.23% 5%
12.71% 10.00%

Held
9.73%
2.31%
12.04%

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
15.5

Sponsors
Financial Institutions
Foreign Investors
Non- resident Bangladeshi
General Public

2014

2013

2014

2013

Taka
4,172,290,330
2,256,814,180
140,552,070
39,915,690
3,683,913,890
10,293,486,160

Taka
4,165,087,830
1,886,179,950
511,084,550
37,522,850
3,693,610,980
10,293,486,160

%
40.53%
21.92%
1.37%
0.39%
35.79%
100.00%

%
40.46%
18.32%
4.97%
0.36%
35.88%
100.00%

Shareholding range on the basis of shareholdings as at 31 December 2014


Shareholding range

Number of share
holders

Less than 500


500- 5,000
5,001 - 10,000
10,001 - 20,000
20,001 - 30,000
30,001 - 40,000
40,001 - 50,000
50,001 - 100,000
100,001 - 1,000,000
Over 1,000,000
15.7

2013

Percentage of shareholdings at the closing date


Particulars

15.6

2014

11,410
8,865
1,245
701
190
97
75
177
213
129
23,102

Taka
Shares

Percentage

1,922,053
15,260,431
8,859,553
10,064,830
4,683,706
3,368,941
3,382,970
12,321,318
62,026,495
907,458,319
1,029,348,616

0.19%
1.48%
0.86%
0.98%
0.45%
0.33%
0.33%
1.20%
6.02%
88.16%
100.00%

Name of the Directors and their shareholdings as at 31 December 2014


Sl

Name of the directors

Mr. Azam J Chowdhury


(Representative of East Coast Shipping Lines Ltd.)

2
3
4
5
6
7
8

Mr. Khandker Mohammad Khaled


Mr. M. A. Khaleque
Quazi Sirazul Islam
Mr. Md. Nader Khan
Mr. Md. Shirajul Islam Mollah
Mr. Mafiz Ahmed Bhuiyan
Mr. Md. Shahadat Hossain

Mr. Mizanur Rahman Bhuiyan


(Representative of Uniglory Cycle Industries Ltd.)

10
11
12
13
14
15
16

Mrs. Marina Yasmin Chowdhury


Mrs. Nazma Haque
Mrs. Nasim Anwar Hossain
Mrs. Salma Huq
Mrs. Muslima Shirin
Mr. Nafis Sikder
Mr. Imran Khan

17 Prof. Ainun Nishat


18 Mr. Manzur Murshed
19 Prof. Dr. Mohammed Aslam Bhuiyan
20 Mr. Ahmed Kamal Khan Chowdhury

Status

Opening
position

% of shares
as at
31.12.2014
2.00

Closing
position

Chairman

20,601,158

20,601,158

Vice Chairman
Vice Chairman
Director
Director
Director
Director
Director

28,570,378
21,846,820
20,616,158
38,019,361
20,644,922
20,591,099
27,811,583

28,570,378
21,846,820
20,616,158
38,019,361
20,644,922
20,591,099
27,811,583

Director
Director
Director
Director
Director
Director
Director
Director
Independent
Director
Independent
Director
Independent
Director
Managing
Director

20,760,250

(Share holding of
East Cost Shipping
Lines Ltd.)

2.78
2.12
2.00
3.69
2.01
2.00
2.70
2.02

(Share holding
of Uniglory Cycle
Industries Ltd.)

20,882,328
20,678,053
23,365,749
32,254,341
20,587,749
25,826,178
20,588,337

20,882,328
20,678,053
23,365,749
32,254,341
20,587,749
25,826,178
20,588,337

2.03
2.01
2.27
3.13
2.00
2.51
2.00

29,277

29,277

0.003

362,913,491

383,673,741

Directors of the Bank complies with the requirements at SEC notification no-SEC/CMRRCD/2009-193/119/Admin/34 dated
21/11/2011 regarding holding of shares which states that each Director other than Independent Directors of any listed company
shall hold minimum 2% (Two percent) share of the Paid-up Capital otherwise there shall be a casual vacancy of Directors.

343

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

15.8 Share premium


11,552,734 ordinary shares of Taka 200 each per share
Less: Income tax deduction at source @ 3% on total premium

2,310,546,800

2,310,546,800

69,316,404

69,316,404

2,241,230,396

2,241,230,396

15.9 Minority interest


Share capital
Retained earnings

60

60

0.28

60

65

7,528,626,614

6,839,527,566

656,019,965

689,099,048

8,184,646,579

7,528,626,614

16 Statutory reserve
Balance on 1 January
Addition during the year ( 20% of pre-tax profit)
Balance at 31 December 2014
17 Consolidated revaluation gain / loss on investments
Prime Bank Limited (note-17a)

441,469,626

109,193,803

Gain on revaluation of Investment at Prime Exchange Co. Pte. Ltd., Singapore

3,727,540

4,320,315

Gain on revaluation of Investment at Prime Exchange (UK) Ltd.

4,104,926

7,686,176

Gain on revaluation of Investment at PBL Finance (Hong Kong) Limited

12,492,708

14,471,068

461,794,800

135,671,362

109,193,803

19,719,692

17(a) Revaluation gain / loss on investments of the Bank


Opening balance on 1 January
Add: Amortized/Revaluation Gain
Less: Adjustment of amortization/revaluation gain against sale/maturity
Add: Adjustment of revaluation gain/(loss) of OBU fixed assets
Less: Adjustment of Revaluation loss

622,833,216

318,478,771

(290,552,049)

(229,101,567)

(5,346)

96,907

441,469,626

109,193,803

18 Revaluation reserve
Balance on 1 January
Addition during the year
Balance at 31 December 2014
Less: Provision for deferred tax

1,778,219,183

296,004,196

1,482,214,987

1,778,219,183

1,778,219,183

(274,700,627)

(266,732,877)

1,503,518,556

1,511,486,306

5,086,036

4,513,294

The Bank revalued the assets of Land and Buildings details described in note 2.5
19 Consolidated foreign currency translation gain/ (loss)
Prime Bank Limited (note-19a)
Prime Bank Investment Limited

Prime Bank Securities Limited

(302,730)

(187,889)

54,804

17,248

Prime Exchange Co. Pte. Ltd., Singapore


PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

54,790

(695,960)

4,892,900

3,646,693

19a Foreign currency translation gain/ (loss)


Balance on 1 January
Addition during the year
Balance at 31 December 2014

344

4,513,294

5,015,711

572,743

(502,417)

5,086,036

4,513,294

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

20 Consolidated retained earnings / movement of profit and loss account


Prime Bank Limited (note-20a)

1,791,847,369

1,340,578,118

Prime Bank Investment Limited

14,117,109

226,502,745

Prime Bank Securities Limited

17,484,332

49,055,787

Prime Exchange Co. Pte. Ltd., Singapore

40,234,150

35,121,487

(48,578,004)

(49,495,332)

PBL Exchange (UK) Ltd.


PBL Finance (Hong Kong) Limited
Less: Minority Interest
Less: Transfer to statutory reserve
Less: Dividend of Prime Bank Investment Limited
Less: Profit Remitted by Prime Exchange Co. Pte. Ltd., Singapore
Less: Profit Remitted by PBL Finance (Hong Kong) Limited
Less: Foreign currency translation gains

105,232,830

98,272,587

1,920,337,787

1,700,035,392

(0.28)

(5)

(28,002,888)

(5,904,302)

(9,270,867)

(50,020,059)

(47,761,808)

(379,607)

1,369,018

1,864,033,818

1,616,368,842

20a Retained earnings / movement of profit and loss account of the Bank
Balance on 1 January

1,341,080,535

2,072,227,283

Addition during the year

2,392,899,827

1,829,495,239

(656,019,965)

(689,099,048)

(1,286,685,770)

(935,771,469)

Transfer to statutory reserve


Cash dividend
Issue of bonus shares
Balance at 31 December 2014
Add: Foreign currency translation gain/ (loss)

(935,771,470)

1,791,274,627

1,341,080,535

572,743

(502,417)

1,791,847,369

1,340,578,118

20.1 Consolidated retained earnings brought forward from previous year


Prime Bank Limited (note-20.1 a)
Prime Bank Investment Ltd.
Prime Bank Securities Ltd.
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited
Foreign currency translation gain on 1 January

54,394,765

200,684,345

198,499,857

86,488,306

49,055,787

33,096,718

19,946,318

21,375,947

(49,495,332)

(45,540,613)

490,720

272,892,115

296,104,702

1,624,702

(943,855)

274,516,818

295,160,847

Balance on 1 January

1,341,080,535

2,072,227,283

Bonus shares issued

(935,771,470)

(1,286,685,770)

(935,771,469)

54,394,765

200,684,344

20.1.a Retained earnings brought forward from previous year of the Bank

Cash dividend paid


Balance at 31 December 2014
Foreign currency translation gain on 1 January

54,394,765

200,684,344

26,742,389,739

30,869,304,940

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

26,742,389,739

30,869,304,940

21 Consolidated contingent liabilities (restated)


21.1 Acceptances and endorsements
Prime Bank Limited (note-21a.1)

345

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

21.2 Letters of guarantee


Prime Bank Limited (note-21a.2)

61,408,149,593

55,438,139,259

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

61,408,149,593

55,438,139,259

20,698,448,178

20,885,957,458

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

20,698,448,178

20,885,957,458

9,262,180,366

9,221,494,133

Prime Bank Investment Limited

Prime Bank Securities Limited

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

21.3 Irrevocable Letters of Credit


Prime Bank Limited (note-21a.3)

21.4 Bills for collection


Prime Bank Limited (note-21a.4)

9,262,180,366

9,221,494,133

118,111,167,875

116,414,895,789

21a Contingent liabilities of the Bank (restated)


21a.1 Acceptances and endorsements
Back to back bills (Foreign)
Back to back bills (Local)
Back to back bills (EPZ)
Less: Margin

21,774,217,291

23,256,635,325

4,509,657,895

7,032,011,863

458,514,552

580,657,752

26,742,389,739

30,869,304,940

(5,539,717,082)

(5,855,120,347)

21,202,672,657

25,014,184,593

21a.2 Letters of guarantee


Letters of guarantee (Local)

19,812,783,078

20,458,081,297

Letters of guarantee (Foreign)

41,595,366,515

34,980,057,962

Foreign counter guarantees


Less: Margin

346

61,408,149,593

55,438,139,259

(1,207,823,431)

(1,161,150,850)

60,200,326,162

54,276,988,409

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

Money for which the Bank is contingently liable in respect of guarantees given favoring:
Directors or officers

20,344,060

413,930,380

1,909,382,141

16,877,442,202

59,478,423,392

38,146,766,677

61,408,149,593

55,438,139,259

(1,207,823,431)

(1,161,150,850)

60,200,326,162

54,276,988,409

5,037,481,634

6,042,369,612

Letters of credit (Deferred)

10,264,457,760

7,067,578,263

Back to back L/C

5,396,508,785

7,776,009,583

20,698,448,178

20,885,957,458

(1,351,138,286)

(1,526,926,409)

19,347,309,892

19,359,031,049

9,262,180,366

9,221,494,133

9,262,180,366

9,221,494,133

(79,490,309)

(116,518,903)

9,182,690,056

9,104,975,230

Government
Banks and other financial institutions
Others

Less: Margin

21a.3 Irrevocable Letters of Credit


Letters of credit (Sight)

Less: Margin

21a.4 Bills for collection

Outward bills for collection

Less: Margin

347

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014
22

2013

Income statement
Income:
Interest, discount and similar income (note-22.1)
Dividend income (note-25a)
Fees, commission and brokerage (note-22.2)

24,560,584,428

27,503,478,449

79,659,231

89,885,351

1,156,719,912

1,225,042,868

Gains less losses arising from dealing in securities

Gains less losses arising from investment securities

876,405,326

930,442,297

806,468,141

812,592,003

27,479,837,038

30,561,440,968

15,573,523,588

17,678,359,259

Gains less losses arising from dealing in foreign currencies (note-26a.1)


Income from non-banking assets
Other operating income (note-27a)
Profit less losses on interest rate changes
Expenses:
Interest / profit paid on deposits, borrowings, etc. (note-24a)
Losses on loans, advances and lease/ investments
Administrative expenses (note-22.3)
Other operating expenses (note-38a)
Depreciation on banking assets (note-37a)

22.1

1,155,846,289

333,115,035

298,461,545

21,323,149,122

23,087,283,527

6,156,687,916

7,474,157,441

18,445,885,369

22,010,657,745

4,998,194,457

4,650,707,200

Gain on Discounted bond / bills (note-25a)

1,029,558,633

672,169,796

17,605,179

2,640,608

255,904,955

152,252,408

56,714,976

96,608,268

24,803,863,571

27,585,036,025

Gain on Govt. security trading (note-25a)


Interest on debentures (note-25a)
Less: Loss on revaluation of security trading (note-25a)

243,279,143

81,557,576

24,560,584,428

27,503,478,449

1,156,719,912
1,156,719,912

1,225,042,868
1,225,042,868

3,279,735,275

2,939,016,912

582,596,952

550,258,309

Fees, commission and brokerage


Commission (note-26a)
Settlement fee-PBIL (note-26a)
Administrative expenses
Salary and allowances (note-28a)
Rent, taxes, insurance, electricity, etc. (note-29a)
Legal expenses (note-30a)

35,854,242

37,756,195

Postage, stamp, telecommunication, etc. (note-31a)

112,446,490

134,001,255

Stationery, printing, advertisement, etc. (note-32a)

210,809,010

227,285,212

Managing Director's salary and fees (note-33)

8,674,785

11,590,000

Directors' fees (note-34a)

3,799,929

4,364,816

Auditors' fees (note-35a)

1,150,000

690,000

Repair of Bank's assets (note-37a)

348

1,114,305,707

Interest income on treasury bills / reverse repo / bonds (note-25a)


Gain on sale of shares (note-25a)

22.3

3,954,616,434

Interest, discount and similar income


Interest income / Profit on investments (note-23a)

22.2

4,302,204,792

67,138,108

49,653,735

4,302,204,792

3,954,616,434

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

23 Consolidated interest income / profit on investment


Prime Bank Limited (note-23a)

18,445,885,369

22,010,657,745

Prime Bank Investment Limited

391,826,475

455,964,116

11,667,012

67,578,007

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

Prime Bank Securities Limited

PBL Finance (Hong Kong) Limited


Less: Inter-company transactions (restated)

84,434,808

81,448,997

18,933,813,664

22,615,648,865

465,893,062

580,044,928

18,467,920,602

22,035,603,937

3,541,296,853

4,204,486,951

23a Interest income / profit on investment of the Bank


Loans (General) / Musharaka
Loans against imported merchandise / Murabaha
Loans against trust receipts
Packing credit

8,800,379

12,223,477

1,160,197,662

1,924,614,565

52,004,730

55,195,298

534,957,359

586,329,448

Lease finance / Izara

719,886,856

1,033,922,835

Hire purchase

901,394,752

1,138,828,562

House building loan

Payment against documents


Cash credit / Bai-Muajjal
Secured overdraft

20,866,736

72,769,763

2,510,348,691

2,929,270,357

3,637,595,881

4,778,544,332

2,025,943,938

1,915,282,906

Staff loan

121,324,259

128,528,443

Small and Medium Enterprise (SME)

773,839,769

734,951,041

Agricultural Loan

159,705,030

153,033,197

44,346,278

169,788,729

Consumer credit scheme

Forced loan
Documentary bills purchased

462,666,395

751,465,294

Interest income from credit card

238,602,584

210,085,335

Other loans and advances / Investments


Total interest / profit on loans and advances / investments
Interest / profit on balance with other banks and financial institutions
Interest on call loans
Interest / profit received from foreign banks

1,281,442,730

976,034,520

18,195,220,882

21,775,355,053

1,892,083

899,852

83,109,736

91,891,431

165,662,668

142,511,409

18,445,885,369

22,010,657,745

Prime Bank Limited (note-24a)

15,573,523,588

17,678,359,259

Prime Bank Investment Limited

452,709,342

568,950,077

24 Consolidated interest / profit paid on deposits, borrowings, etc.

46,302,622

48,064,346

Prime Exchange Co. Pte. Ltd., Singapore

Prime Bank Securities Limited

PBL Exchange (UK) Ltd.

25,717,753

29,034,365

16,098,253,305

18,324,408,047

PBL Finance (Hong Kong) Limited


Less: Inter-company transactions (restated)

469,094,461

585,646,533

15,629,158,843

17,738,761,514

349

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

24a Interest / profit paid on deposits, borrowings, etc. of the Bank


i.

Interest / profit paid on deposits:


Savings bank / Mudaraba savings deposits

920,693,312

831,075,984

Special notice deposits

769,330,607

945,532,299

8,237,080,877

10,253,581,970

4,992,418,311

4,824,217,055

15,409,740

9,127,196

Term deposits / Mudaraba term deposits


Deposits under scheme
Foreign currency deposits (note-24a.1)
Others

ii.

37,002,013

26,942,930

14,971,934,861

16,890,477,434

37,265,181

240,430,291

32,348,366

116,560,703

Interest / Profit paid for borrowings:


Call deposits
Repurchase agreement (repo)
Bangladesh Bank-refinance
Local bank accounts
Foreign bank accounts
PBL bond

7,495,873

5,820,034

127,279,499

114,608,821

109,699,808

19,748,881

287,500,000

290,713,095

601,588,727

787,881,825

15,573,523,588

17,678,359,259

24a.1 Foreign currency deposits


Interest / profit paid on F.C

11,816,544

4,781,773

Interest / profit paid on N.F.C.D

3,593,196

4,317,525

Interest / profit paid on R. F.C.D

27,898

15,409,740

9,127,196

Prime Bank Limited (note-25a)

6,194,358,289

5,582,706,055

Prime Bank Investment Limited

61,528,131

276,193,624

Prime Bank Securities Limited

2,643,871

4,298,999

Prime Exchange Co. Pte. Ltd., Singapore

PBL Exchange (UK) Ltd.

25 Consolidated investment income

PBL Finance (Hong Kong) Limited


Less: Inter-company transactions

6,258,530,291

5,863,198,678

6,258,530,291

5,863,198,678

25a Investment income of the bank


Interest on treasury bills / Reverse repo / bonds

4,998,194,457

4,650,707,200

Interest on debentures / bonds

56,714,976

96,608,268

Gain on discounted bond / bills

1,029,558,633

672,169,796

Gain on sale of shares


Gain on Govt. security trading
Dividend on shares
Less: Loss on revaluation of security trading

350

17,605,179

2,640,608

255,904,955

152,252,408

79,659,231

89,885,351

6,437,637,432

5,664,263,631

243,279,143

81,557,576

6,194,358,289

5,582,706,055

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

26 Consolidated commission, exchange and brokerage


Prime Bank Limited (note-26a)
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

2,033,125,238
53,751,361
30,121,613
72,320,132
44,636,299
2,233,954,643

2,155,485,165
45,483,899
31,572,380
57,171,845
42,544,848
2,332,258,137

237,368,368
407,349,243
377,763,760
74,493,576
1,501,206
46,569,530
11,674,229
1,156,719,912
876,405,326
2,033,125,238

258,410,469
489,047,307
363,327,092
75,011,914
51,059
3,571,842
21,710,905
13,912,280
1,225,042,868
930,442,297
2,155,485,165

876,433,792

930,532,464

26a Commission, exchange and brokerage of the Bank


Commission on L/Cs
Commission on L/Cs-back to back
Commission on L/Gs
Commission on remittance
Commission for services rendered to issue of shares
Merchant Commission
Underwriting Commission regarding Treasury bill/ Bond
Commission from sale of BSP /PSP
Exchange gain (note - 26a.1) - including gain from FC dealings
Settlement fees / Brokerage
26a.1 Exchange gain
Exchange gain
Exchange gain-credit card

(28,466)

(90,167)

876,405,326

930,442,297

Prime Bank Limited (note-27a)

806,468,141

812,592,003

Prime Bank Investment Limited

23,193,276

26,901,295

Less: Exchange loss


27 Consolidated other operating income

Prime Bank Securities Limited


Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited
Less: Inter-company transactions (restated)

971,313

569,922

979,239

1,027,803

54,459,314

45,312,857

886,071,283

886,403,880

3,201,399

5,601,605

882,869,884

880,802,275

8,323,697
72,669,789
212,931,338
112,559,700
45,111,771
172,324,387
100
77,611,186
1,363
104,934,811
806,468,141

7,618,374
21,555,536
221,870,549
115,967,133
38,914,256
160,888,059
86
102,710,778
2,014,878
141,052,354
812,592,003

27a Other operating income of the Bank


Rent recovered
Service and other charges
Retail Income
Income from ATM service
Credit card income (note-27a.2)
Postage / telex / SWIFT/ fax recoveries
Incidental charges
Rebate from foreign Bank outside Bangladesh
Profit on sale of fixed assets
Miscellaneous earnings (note-27a.1)

27a.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank, notice fee and sale
proceeds of various items, etc.

351

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

27a.2 Credit card income


Annual fees
Inter-change fees
Others

22,082,937

19,826,512

21,791,785

18,868,098

1,237,049

219,646

45,111,771

38,914,256

28 Consolidated salaries and allowances


Prime Bank Limited (note-28a)

3,279,735,275

2,939,016,912

Prime Bank Investment Limited

28,775,522

31,576,176

Prime Bank Securities Limited

12,735,339

14,696,693

Prime Exchange Co. Pte. Ltd., Singapore

21,618,106

21,604,663

PBL Exchange (UK) Ltd.

21,652,530

19,979,329

PBL Finance (Hong Kong) Limited

29,855,172

23,426,518

3,394,371,944

3,050,300,291

1,356,779,270

1,218,404,871

28a Salaries and allowances of the Bank


Basic pay
Allowances

958,027,048

893,857,770

Bonus

455,631,477

379,634,025

Bank's contribution to provident fund

123,886,019

113,361,176

4,258,494

1,961,610

381,152,966

331,797,460

3,279,735,275

2,939,016,912

Prime Bank Limited (note-29a)

582,596,952

550,258,309

Prime Bank Investment Limited

7,993,200

7,649,825

Retirement benefits
Gratuity

29 Consolidated rent, taxes, insurance, electricity, etc.

Prime Bank Securities Limited

5,159,239

3,592,556

Prime Exchange Co. Pte. Ltd., Singapore

12,346,270

13,425,122

PBL Exchange (UK) Ltd.

11,729,050

13,509,608

7,765,727

6,787,492

627,590,438

595,222,912

319,980,722

284,692,653

PBL Finance (Hong Kong) Limited

29a Rent, taxes, insurance, electricity, etc. of the Bank


Rent, rates and taxes
Lease rent

88,281

4,550,878

Insurance

143,111,343

156,419,900

Power and electricity

119,416,606

104,594,878

582,596,952

550,258,309

Prime Bank Limited (note-30a)

35,854,242

37,756,195

Prime Bank Investment Limited

238,050

125,525

80,500

44,500

30 Consolidated legal expenses

Prime Bank Securities Limited


Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

352

1,327,337

969,617

1,934,549

1,188,295

132,035

367,568

39,566,713

40,451,700

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

30a Legal expenses of the Bank


Legal expenses

16,529,650

17,272,917

Other professional charges

19,324,592

20,483,278

35,854,242

37,756,195

Prime Bank Limited (note-31a)

112,446,490

134,001,255

Prime Bank Investment Limited

995,916

1,512,472

31 Consolidated postage, stamp, telecommunication, etc.

Prime Bank Securities Limited

409,428

1,080,521

Prime Exchange Co. Pte. Ltd., Singapore

1,134,757

1,450,662

PBL Exchange (UK) Ltd.

1,021,368

978,437

PBL Finance (Hong Kong) Limited

4,240,788

2,684,388

120,248,747

141,707,735

15,590,175

15,922,767

31a Postage, stamp, telecommunication, etc. of the Bank


Postage & Courier
Telegram, telex, fax and internet

44,983,403

49,144,504

Data communication

24,748,451

45,727,139

Telephone - office

26,149,647

22,117,929

974,814

1,088,916

112,446,490

134,001,255

Prime Bank Limited (note-32a)

210,809,010

227,285,212

Prime Bank Investment Limited

1,308,710

932,710

Telephone - residence
32 Consolidated stationery, printing and advertisements, etc.

311,775

239,375

Prime Exchange Co. Pte. Ltd., Singapore

Prime Bank Securities Limited

2,623,799

1,662,155

PBL Exchange (UK) Ltd.

1,092,829

1,317,528

PBL Finance (Hong Kong) Limited

313,893

242,569

216,460,016

231,679,549

69,559,376

73,816,577

Computer consumable stationery

53,785,419

71,334,861

Publicity and advertisement *

87,464,216

82,133,774

210,809,010

227,285,212

32a Stationery, printing and advertisements, etc. of the Bank


Office and security stationery

* Previously, sponsorship expenses was included under the head of "Publicity and advertisement". Now the same is
presented under the head of "Other expenses" (note-38a)
33 Managing Director's salary and fees
Basic salary

4,481,323

5,940,000

Bonus

1,495,000

1,990,000

House rent allowance

989,398

1,320,000

Utility allowance

457,686

624,000

House maintenance allowance

700,559

960,000

Others

550,819

756,000

8,674,785

11,590,000

353

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
34 Consolidated Directors' fees
Prime Bank Limited (note-34a)
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited
34a Directors' fees of the Bank
Meeting fees
Other benefits

2014

2013

3,799,929
239,250
43,700
4,082,879

4,364,816
59,450
18,975
4,443,241

1,875,000
1,924,929
3,799,929

2,255,000
2,109,816
4,364,816

1,150,000
115,000
69,000
271,210
311,241
180,664
2,097,114

690,000
115,000
69,000
252,982
321,474
182,971
1,631,427

1,150,000
1,150,000

690,000
690,000

400,253,143
6,428,119
2,654,663
3,602,317
2,292,974
1,979,371
417,210,587

348,115,280
6,263,540
2,618,427
4,298,544
2,915,251
1,061,191
365,272,233

291,131,795
3,793,227
294,925,021

249,858,500
5,073,230
254,931,730

34,433,167
3,756,847
38,190,014

38,847,401
4,682,414
43,529,815

4,523,282
10,882,447
32,717,379
9,357,054
9,657,946
67,138,108
400,253,143

3,021,075
3,918,573
29,483,968
7,921,793
5,308,326
49,653,735
348,115,280

Each Director is paid Tk.5,000/- per meeting per attendance.


35 Consolidated Auditors' fees
Prime Bank Limited (note-35a)
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited
35a Auditors' fees of the Bank
External Audit fee
36 Charges on loan losses
Loan -written off
Interest waived
37 Consolidated depreciation and repair of Bank's assets
Prime Bank Limited (note-37a)
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited
37a Depreciation and repair of Bank's assets
Depreciation - (see annexure-C for detail)
Fixed assets
Leased assets
Amortization -(see annexure-C for detail)
Software-core banking
Software-ATM
Repairs
Building
Furniture and fixtures
Office equipment
Bank's vehicles
Maintenance

354

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

38 Consolidated other expenses


Prime Bank Limited (note-38a)

1,114,305,707

1,155,846,289

Prime Bank Investment Limited

12,705,853

18,842,978

Prime Bank Securities Limited*

5,863,524

7,410,881

Prime Exchange Co. Pte. Ltd., Singapore

14,190,798

8,224,318

PBL Exchange (UK) Ltd.

6,506,926

6,668,006

PBL Finance (Hong Kong) Limited

2,679,915

1,742,534

1,156,252,723

1,198,735,007

*Previously, interest expenses was included under the head of "Consolidated other expenses". Now it is presented under
the head of "Consolidated interest expenses" (note-24).
38a Other expenses of the Bank
Security and cleaning

162,915,686

165,790,496

Entertainment

40,994,187

47,687,861

Car expenses

165,854,269

148,941,549

ATM expenses

155,814,918

150,585,538

Retail expenses

87,845,530

64,324,900

1,772,786

1,750,362

821,726

664,020

Books, magazines and newspapers, etc.


Liveries and uniforms
Medical expenses
Bank charges and commission paid
Loss on sale of fixed assets
Finance charge for lease assets

137,934

165,729

4,834,775

8,006,432

281,382

143,122

97,507

1,767,809

House furnishing expenses

2,476,934

2,627,195

Subscription to institutions

10,068,894

9,201,312

Donations

39,140,323

33,425,556

Sponsorship

69,593,888

164,961,164

Traveling expenses

31,403,376

26,147,659

Expenses for merchant banking

5,112

3,319,093

17,595,136

22,873,227

Business development

36,135,564

19,909,911

Training and internship

21,257,378

14,657,059

Local conveyance, labor, etc.

Remittance charges

9,457,108

9,398,083

Cash reward to branches

2,235,000

1,155,000

Laundry, cleaning and photographs, etc.

5,786,304

6,423,219

Credit card expenses

38,057,189

32,238,509

Consolidated salary (staff)

26,808,753

35,276,010

Annual General Meeting

2,423,555

713,905

Exgratia

15,805,148

13,511,843

Welfare fund
Prime Bank Foundation
Miscellaneous expenses

6,560,200

6,891,000

131,203,993

137,820,000

26,921,153

25,468,725

1,114,305,707

1,155,846,289

355

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

39 Consolidated provision for loans, investments, off balance sheet exposure & other assets
Provision for bad and doubtful loans and advances / investments-PBL (note-39a)

2,643,500,000

2,980,000,000

Provision for unclassified loans and advances / investments-PBL (note-39a)

114,000,000

642,000,000

Provision for bad and doubtful loans and advances (OBU) (note-39a)

30,000,000

350,000,000

Provision for unclassified loans and advances / investments (OBU) (note-39a)

46,000,000

12,000,000

(1,510,000)

10,000,000

Provision for off-balance sheet exposure-PBL (note-39a)


Provision for diminution in value of investments-PBL (note-39a)

(7,000,000)

24,527,202

Provision for diminution in value of investments-PBIL

(49,637,089)

Provision for impairment of client margin loan-PBIL

245,135,052

Provision for diminution in value of investments-PBSL

(428,503)

(51,962)

Provision for impairment of client margin loan-PBSL

3,675,143

1,354,126

Provision for impairement loss for investment in subsidiaries (note-39a)

45,398,089

Provision for other assets (note-39a)

6,200,000

10,135,000

3,075,332,692

4,029,964,366

As per the Press release # BSEC/Mukhopatro/2011/1733 dated 31 December 2014 of Bangladesh Securities and Exchange
Commission, 20% provision has been made by Prime Bank Securities Limited while Prime Bank Investment Limited
made 50.00% provision on diminution in value of investments and 42.18% provision made on impairment of client
margin loan.
39a Provision for loans, investments, off balance sheet exposure & other assets of the Bank
Provision for bad and doubtful loans and advances / investments

2,643,500,000

2,980,000,000

Provision for unclassified loans and advances / investments

114,000,000

642,000,000

Provision for bad and doubtful loans and advances (OBU)

30,000,000

350,000,000

Provision for unclassified loans and advances / investments (OBU)

46,000,000

12,000,000

(1,510,000)

10,000,000

Provision for off-balance sheet exposure


Provision for diminution in value of investments

(7,000,000)

24,527,202

Provision for impairement loss for investment in subsidiaries

45,398,089

Provision for other assets

6,200,000

10,135,000

2,876,588,089

4,028,662,202

Prime Bank Limited (note-40a)

1,180,000,000

1,616,000,000

Prime Bank Investment Limited

8,532,689

29,190,904

Prime Bank Securities Limited

490,088

9,337,871

Prime Exchange Co. Pte. Ltd., Singapore

1,044,414

344,056

40 Consolidated tax expenses


Current tax

PBL Exchange (UK) Ltd.


PBL Finance (Hong Kong) Limited

10,870,823

10,025,519

1,200,938,014

1,664,898,350

Deferred tax

356

Prime Bank Limited (note-40a)

(292,800,000)

Prime Bank Investment Limited

(857,621)

(690,162)

Prime Bank Securities Limited

(391,254)

(415,071)

Prime Exchange Co. Pte. Ltd., Singapore

(198,166)

PBL Exchange (UK) Ltd.

PBL Finance (Hong Kong) Limited

(294,247,041)

(1,105,233)

906,690,973

1,663,793,117

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

40a Tax expenses of the Bank


Current tax

1,180,000,000

1,616,000,000

Deferred tax

(292,800,000)

887,200,000

1,616,000,000

Prime Bank Limited (note-41a)

1,866,257,765

1,558,097,238

Prime Bank Investment Limited

84,721,407

303,094,919

3,615,184

4,868,921

979,239

1,027,803

41 Consolidated receipts from other operating activities

Prime Bank Securities Limited


Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

54,459,314

45,312,857

2,010,032,909

1,912,401,737

41a Receipts from other operating activities of the Bank


Rent recovered
Service and other charges
Credit card income

8,323,697

7,618,374

72,669,789

21,555,536

45,111,771

38,914,255

Retail Income

212,931,338

221,870,549

Income from ATM services

112,559,700

115,967,133

Postage / Telex / Fax / SWIFT charge recoveries

172,324,387

160,888,059

Incidental charges
Rebate from foreign Bank outside Bangladesh
Gain from sale of treasury bond / shares
Miscellaneous earnings

100

86

77,611,186

102,710,778

1,059,789,624

745,505,236

104,936,174

143,067,232

1,866,257,765

1,558,097,238

Prime Bank Limited (note-42a)

1,482,600,260

1,429,170,216

Prime Bank Investment Limited

21,815,910

29,210,370

Prime Bank Securities Limited

57,539,985

60,291,380

Prime Exchange Co. Pte. Ltd., Singapore

28,571,653

24,322,701

21,117,569

23,792,906

42 Consolidated payments for other operating activities

PBL Exchange (UK) Ltd.


PBL Finance (Hong Kong) Limited

10,758,340

11,764,953

1,622,403,717

1,578,552,527

582,596,952

550,258,310

42a Payments for other operating activities of the Bank


Rent, rates and taxes
Legal expenses
Postage and communication charges, etc.
Directors' fees
Other expenses

35,854,242

37,756,196

112,446,490

134,001,254

3,799,929

4,364,816

747,902,647

702,789,641

1,482,600,260

1,429,170,216

(4,074,433,703)

(8,849,257,530)

43 (Increase) / decrease of consolidated other assets


Prime Bank Limited (note-43a)
Inter-company capital
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

5,680,537

193,704,428

(175,046,740)

(6,814,745)

(16,512,699)

(19,755)

1,139,897

1,936,520

(132,418,404)

1,194,169,831

(4,019,982,179)

(7,837,890,184)

357

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Amount in Taka
2014

2013

43a (Increase)/ decrease of other assets of the Bank


T & T bonds
Stationery and stamps
Advance deposits and advance rent
Branch adjustment account
Suspense account
Encashment of PSP / BSP
Credit card
Sundry assets

53,430,295,197

49,331,968,698

24,722,480

23,087,731

274,085,598

164,348,546

18,533,017

23,675,936

384,161,142

204,781,970

136,623,524

35,151,558

115,268,108

92,196,123

7,567,549,637

8,001,594,436

61,951,238,701

57,876,804,999

(4,074,433,703)

(8,849,257,530)

44 Increase / (decrease) of consolidated other liabilities


Prime Bank Limited (note-44a)

2,338,428,624

729,880,009

Prime Bank Investment Limited

66,278,159

(251,293,689)

(129,033,153)

150,305,281

3,434,146

12,096,811

(9,013,371)

12,596,912

Prime Bank Securities Limited


Prime Exchange Co. Pte. Ltd., Singapore
PBL Exchange (UK) Ltd.
PBL Finance (Hong Kong) Limited

6,161,015

1,945,895

2,276,255,420

655,531,219

3,560,736,089

2,019,648,273

44a Increase / (decrease) of other liabilities of the Bank


F.C. held against EDF L/C
Exchange equalization fund
Expenditure and other payables
Provision for bonus
Unearned commission on bank guarantee
Other provision

114,717,427

78,636,660

1,697,211

18,307,180

90,117,676

120,567,836

795,721

2,722,214,058

1,913,098,167

6,489,482,461

4,151,053,837

2,338,428,624

729,880,009

Net profit after tax (Numerator)

2,245,536,966

2,038,309,936

Number of Ordinary shares outstanding (Denominator)

1,029,348,616

1,029,348,616

2.18

1.98

Interest suspense account

45 Consolidated earnings per share (CEPS)

Consolidated earnings per share (CEPS)

Earnings per share has been calculated in accordance with BAS - 33: "Earnings Per Share (EPS)". Previous year's figures
have been adjusted for the issue of bonus shares during the year.
45a Earnings per share (EPS) of the Bank
Net profit after tax (Numerator)

2,392,899,827

1,829,495,239

Number of Ordinary shares outstanding (Denominator)

1,029,348,616

1,029,348,616

2.32

1.78

Earnings per share (EPS)

Earnings per share has been calculated in accordance with BAS - 33: "Earnings Per Share (EPS)". Previous year's figures
have been adjusted for the issue of bonus shares during the year.
46 Number of employees of the Bank
The number of employees engaged for the whole year or part thereof who received a total remuneration of Tk. 36,000
p.a. or above were 2,867.
47 Assets pledged as security for liabilities of the Bank
Treasury bills & bonds to Bangladesh Bank for Repo

358

743,665,000

Notes to the Financial Statements


for the year ended 31 December 2014
48 Disclosure on Audit Committee of the Bank
a) Particulars of Audit Committee
The audit committee of the Board was duly constituted by the Board of Directors of the Bank in accordance
with the BRPD Circular no.11 dated October 27,2013 of Bangladesh Bank.
Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 7, 2012 on
Corporate Governance, the current Committee is Constituted with the following 5 (Five) members of the
Board and it is also comply with the BRPD Circular No. 11 dated 27.10.2013.
Name
Prof. Ainun Nishat
Mr. M. A. Khaleque
Khandker Mohammad
Khaled
Mr. Manzur Murshed
Prof. Dr. Mohammed
Aslam Bhuiyan

Status with
bank

Status with
committee

Independent
Director

Chairman

Director

Member

Director

Member

Independent
Director
Independent
Director

Member
Member

Educational Qualification
M.Sc. Engineer (Civil), Bangladesh University of Engineering and
Technology (BUET), Ph.D. in Civil Engineering from University of
Strathclyde, Glasgow, U.K.
M. Com. CA (CC) ICAB
B.Sc. Engineer (Mechanical), Bangladesh University of Engineering
and Technology (BUET).
B.Sc. Engineer (Electrical), University of Dhaka, M.A. (Public
Admin.), American University of Bairut.
B.A. (Hons.), M.A. University of Dhaka, MS in Sociology on Rural
Development, Moscow University, Ph.D. from Bombay University.

b) Meetings held by the Audit Committee during the year by date:


Meeting No

Held on

93rd

04.03.2014

94th

25.03.2014

95th

20.04.2014

96th

12.05.2014

97th

12.07.2014

98th

12.08.2014

99th

09.09.2014

100th

28.10.2014

101st

25.11.2014

102nd

24.12.2014

c) Review by the Audit Committee and Recommended thereof:


i) Reviewed & approved the Audit Plan-2014 of Internal Audit & Inspection Department including IT Audit.
ii) Reviewed Management Letter issued by Bangladesh Bank & other External Auditors and Management
response thereto as part of compliance activities.
iii) Reviewed expressed interest of 17 Audit Firms and upon scrutinizing recommended for appointment.
iv) On the Risk Management issues, the committee directed updating all existing questionnaire/check list in
light of the BCA -2013 to ensure mitigation of the risks inherent with the banking business.
v) The committee reviewed statements on ICAP (Internal Capital Adequacy Assessment Process) under SRP
(Supervisory Review Process) for the year 2012 & 2013 as per guidelines of Bangladesh Bank and advised
maintaining required preparedness for the periodical dialogue/reviews on the subject with the Bangladesh
Bank.
vi) Conducting inspections of the wholly owned subsidiaries abroad.
vii) Brought Shariah Audit & inspection Report under the scrutiny of the committee to maintain uniformity in
the oversight responsibilities as per BCA.
d) Steps taken for implementation of an effective internal control procedure of the Bank :
i) Recommended for opening Islamic Desk at all branches of the bank to respond customers popular demand
of Shariah based Banking services across the country.
ii) Recommended for IT Test Area & Lab facilities to build up technical expertise through practical exercises.
iii) Directed Management to arrange special training program to acquaint all the employees about the range &
use of T-24 System for controlling lapses in banking system T24.
iv) Advised formation of Task force for resolving non compliance issues upon segregation of the audit
objections nature & merit-wise and setting time schedule for completion accordingly.

359

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014
49

Related Party Disclosures of the Bank


i) Names of the Directors together with a list of entities in which they have Interest

Annexure-E

ii) Significant contracts where Bank is a party and wherein Directors have interest during the year 2014
Name of party
iii)

Relationship
-

(Figure in Taka)
Amount
Nil

Nature of transaction
-

Shares issued to Directors and Executives without consideration or exercisable at a


discount

Nil

iv) Related party transactions


Nature of party/ contract

Relationship

Amount

Bangla Trac Ltd.

Common Director

Radiant Alliance

Common Director

6,011,500
1,246,819

Prime Insurance Company Ltd

Common Director

13,226,395

Lease agreement

Common Director

1,628,400

Lease agreement

Common Director

280,800

Lease agreement

Common Director

642,000

Lease agreement

Common Director

10,800,000

v) Lending policies in respect of related party


a.

Amount of transaction regarding loans and advances, deposits, guarantees and


commitment as on 31.12.2014

Nil

b.

Amount of transactions regarding principal items of deposits, expenses and


commission

Nil

c.

Amount of provision against loans and advances given to related party

Nil

d.

Amount of guarantees and commitments arising from other off-balance sheet


exposures

Nil

vi) Disclosure of transaction regarding Directors and their related concerns

Nil

vii) Business other than banking business with any relation concern to the Directors as per Section 18(2) of the
Bank Companies Act, 1991.
a) Lease agreement made with the Sponsor Director & Independent Director

Branch Name

Name of Director and related


by

Lease agreement

Jubilee Road
Branch

Mr. Md. Nader Khan


Director & owner of the
premises

Lease period:
31.07.2015

Lease agreement

ATM Booth
Jubilee Road
Branch

Mr. Md. Nader Khan


Director & owner of the
premises

Lease period: 12.10.2011 to 11.10.2021

Lease agreement

Kulaura Branch

Mrs. Marina Yasmin Chowdhury


Director & owner of the
premises

Nature of contract

Lease agreement

360

Gulshan Branch

Prof. Ainun Nishat


(Independent Director)

Remarks

Lease period:
31.07.2019

01.08.2012

01.08.2013

to

to

Prof. Ainun Nishat was not a


Director of the Bank when the lease
agreement was executed in 2002.
However, Mr. Ainun Nishat became
a Independent Director on 19 March
2009. He is one of the co-sharer of
the lease premises. Lease period:
01.09.2014 to 31.08.2017

Notes to the Financial Statements


for the year ended 31 December 2014

b) Service receiving companies where the Directors interest subsisted during the year
Name of party
Bangla Trac Ltd

Relationship
Common Director

Radiant Alliance Ltd

Common Director

Prime Insurance Company Ltd

Common Director

Nature of transaction
Procurement of Generators
Procurement of Solar Energy
System
Insurance Coverage

viii) Investment in the Securities of Directors and their related concern

Amount
6,011,500
1,246,819
13,226,395
Nil

ix) Business with subsidiary


Name of party
Prime Bank Investment Limited
Prime Bank Securities Limited
Prime Bank Securities Limited
Prime Bank Securities Limited
PBL Finance (Hong Kong) Ltd

Relationship

Nature of transaction

Subsidiary Company
Subsidiary Company
Subsidiary Company
Subsidiary Company
Subsidiary Company

OD Facilities
OD Facilities
Bank Guarantee
Share Trading
Term Placement

Outstanding
Amount
2,973,583,847
371,066,787
500,000,000
299,596,650
2,191,547,381

50 Workers Participation Fund and Welfare Fund


SRO-336-AIN/2010 dated 5-10-2010 issued by the Ministry of Labor and Employment and published in Bangladesh
gazettee on 7-10-2010 declares the status of business of certain institutions and companies like mobile operating
companies, mobile network service providing company, all Govt. and Non-govt. money lending companies, all insurance
companies etc. as Industrial Undertakings for the purposes of Chapter-XV of the Bangladesh Labour Act, 2006 (as
amended up to 2013) which deals with the workers participation in companys profit by way of Workers Participation Fund
and Welfare Fund. The Bangladesh Labour Act, 2006 (as amended up to 2013) requires the Industrial Undertakings to
maintain provision for workers profit participation fund @ 5% on net profit. Since this requirement contradicts with the
Section 11 of the Bank Companies Act 1991 (as amended up to 2013), we wrote a letter to the Association of Bankers
Bangladesh Limited (ABB) seeking advice on the same. Subsequently, ABB has provided us with a legal opinion on this
matter wherein it is said that the provisions of the two statutes shall be subject to challenge and shall vitiate the purpose
of such legislation. Therefore, no provision in this regard has been made in the Financial Statements during the year
under audit.
51 Events after the Reporting Period
i) Bangladesh Bank vide their letter ref no. BRPD (BFIS)/661/14B(P)/2014-8043 and BRPD (BFIS) 661/14B (P)/2015-1177
dated December 18,2014 and February 10, 2015 respectively approved issuance of BDT 2,500,000,000/- as SubOrdinated bond by Prime Bank Limited for inclusion as Tier II capital to increase Capital Adequacy requirement.
If the deal was closed/completed by 31 Dec. 2014, Capital adequacy of the Bank could have been reached up to
13.83% (consolidated) and 13.87% (solo).
ii) The Board of Directors in its 430th meeting decided to recommend payment of 15% (fifteen percent) cash dividend
for the year 2014. The total amount of dividend is Tk. 1,544,022,924 (One hundred fifty four crore forty lac twenty
two thousand nine hundred twenty four) only.

Chairman

Director

Director

Managing Director

361

362

AB Bank Ltd., Mumbai, India


Banca Nazio, del Lavoro, Rome, Italy
Bank of Bhutan, Bhutan
Bank of Tokyo Mitsubishi, Japan
SMBC, Tokyo, Japan
Citibank N.A., Mumbai, India
Citibank N.A., London , UK
Citibank N.A., New York, USA
Citibank N.A., New York, USA (Off-shore Banking)
Commerz Bank AG, Frankfurt , Germany
Commerz Bank AG, Frankfurt , Germany
Commonwealth Bank of Australia, Australia
Credit Suisse (First Boston), Switzerland
Deutsche Bank Trust Company Americas
Habib American Bank, New York, USA
Habib Metropolitan Bank, Karachi
Habib Bank Limited, karachi
HDFC Bank Limited, Kolkata, India
HSBC Bank USA, New York, USA
HSBC Bank Middle East Ltd., Karachi, Pakistan
HSBC PLC, London, UK
HANA Bank, Seoul
ICICI Bank Ltd, Mumbai, India
Intesa Sanpaolo SPA, Milano, Italy
J. P. Morgan Chase Bank, New York
Korea Exchange Bank Seoul
Mashreq Bank PSC, New York, USA
Mashreq Bank PSC, Mumbai, India
National Westminister Bank, London, UK
The National Commercial Bank, Jeddah
Nepal Bangladesh Bank Ltd., Kathmandu, Nepal

Name of the Bank


CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD

Account type

of Prime Bank Limited as at 31 December 2014

Currency
type
US$
EURO
US$
JP
JP
US$
EURO
US$
US$
EURO
US$
AUD
CHF
US$
US$
US$
US$
US$
US$
US$
GBP
US$
US$
EURO
US$
US$
US$
US$
GBP
SAR
US$

FC
amount
966,327.54
70,310.95
6,765,823.00
5,056,246.00
860.36
385,293.03
1,119,041.42
1,938,517.18
66,999.11
44,596.07
284,931.06
201,200.91
415,959.13
200,422.67
1,084,557.29
3,217,503.07
8,629.36
384,310.46
5,768.00
418,650.45
79,467.78
329,296.89
432,566.42
200,995.01
107,881.00
29,060.24

Exchange
rate
77.9494
77.9494
0.6459
0.6459
77.9494
94.7007
77.9494
94.7007
77.9494
63.3807
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
77.9494
94.7007
77.9494
77.9494
77.9494
77.9494
120.9151
20.7682
77.9494

2014
Equivalent
Taka
75,324,652
5,480,696
4,370,045
3,265,829
67,065
36,487,520
87,228,607
183,578,934
5,222,540
2,826,530
22,210,205
15,683,490
32,423,765
15,622,827
84,540,590
250,802,434
672,653
29,956,770
546,234
32,633,551
6,194,466
25,668,495
33,718,293
24,303,332
2,240,494
2,265,228

Balance with other banks-Outside Bangladesh (Nostro Account)

FC
amount
4,107.04
28,049.39
4,376,782.00
4,350,310.00
7,511.98
42,388.60
113,148.99
1,495,835.62
104,320.75
45,672.21
110,638.40
120,074.66
395,952.22
227,620.00
412,746.21
188,202.26
115,062.14
7,339.36
315,518.40
7,755.67
60,749.25
42,591.23
89,899.87
250,509.00
209,857.95
111,284.00
84,290.24

2013
Exchange
rate
77.7500
77.7500
0.7393
0.7393
77.7500
106.8207
77.7500
106.8207
77.7500
68.9254
77.7500
77.7500
77.7500
77.7500
77.7500
77.7500
128.0776
77.7500
77.7500
106.8207
77.7500
77.7500
77.7500
77.7500
128.0776
20.7300
77.7500

Equivalent
Taka
319,322
2,180,840
3,235,755
3,216,184
584,056
4,527,980
8,797,334
159,786,208
8,110,938
3,147,975
8,602,136
9,335,805
30,785,285
17,697,455
32,091,018
14,632,726
14,736,883
570,635
24,531,556
828,466
4,723,254
3,311,468
6,989,715
19,477,075
26,878,103
2,306,917
6,553,566

Annexure-A

Annual Report 2014

363

People's Bank, Colombo, Sri Lanka


Skandinaviska Enskilda, Banken, Sweden
Sonali Bank, Kolkata, India
Standard Chartered Bank, Kolkata, India
Standard Chartered Bank, New York, USA
Standard Chartered Bank, Singapore
Standard Chartered Bank, Frankfurt, Germany
State Bank of India, Kolkata
The Bank of Nova Scotia, Canada
Unicredito Italiano SPA, Milano, Italy
Wells Fargo Bank N. A., New York
Zuercher Kantonal Bank, Zurich
Total

Name of the Bank


CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD
CD

Account type

of Prime Bank Limited as at 31 December 2014

Currency
type
US$
SEK
US$
US$
US$
SG$
EURO
US$
CAD
EURO
US$
CHF

FC
amount
267,297.93
29,524.78
328,315.94
935,921.85
552,389.63
399,445.15
154,578.99
82,714.23
70,427.23
719,142.50
16,753.32

Exchange
rate
77.9494
9.9069
77.9494
77.9494
77.9494
58.8831
94.7007
66.9323
94.7007
77.9494
78.7288

2014
Equivalent
Taka
20,835,713
292,499
25,592,031
72,954,547
43,058,440
23,520,569
14,638,739
5,536,254
6,669,508
56,056,726
1,318,969
1,253,809,238

Balance with other banks-Outside Bangladesh (Nostro Account)

FC
amount
280,986.45
39,379.62
45,626.72
324,827.41
204,828.11
848,203.65
49,756.28
66,834.20
517,182.08
238,990.15
64,033.20

Exchange
rate
77.7500
11.9281
77.7500
77.7500
77.7500
61.2542
106.8207
72.5618
106.8207
77.7500
87.1832

Equivalent
Taka
21,846,696
469,724
3,547,477
25,255,331
15,925,386
51,956,036
5,315,001
4,849,610
55,245,752
18,581,484
5,582,619
626,533,772

Annexure-A Continued
2013

Annual Report 2014

Reconciliation statement of Balance with Bangladesh Bank


as at 31st December 2014

Annexure-A-1

1) Balance with Bangladesh Bank-Taka account of the Bank


Detail
Balance as per Bank ledger

Total
13,528,018,067

Unresponded debit entries in


Bangladesh Bank statement
Prime Bank's ledger

22,168,897
1,412,956

23,581,852
13,504,436,215

Unresponded credit entries in


Bangladesh Bank statement
Prime Bank's ledger

4,499,453
1,156,835

5,656,288
13,510,092,503

Balance as per Bangladesh Bank statement


2) Balance with Bangladesh Bank-Foreign currency of the Bank
Balance as per Bank ledger

1,284,357,478

Unresponded debit entries in


Bangladesh Bank statement
Prime Bank's ledger

103,800,516
14,902,467

118,702,982
1,165,654,495

Unresponded credit entries in


Bangladesh Bank statement
Prime Bank's ledger
Balance as per Bangladesh Bank statement

364

534,829,089
453,658,715

988,487,804
2,154,142,299

Investment in shares of the Bank


as at 31st December 2014

Annexure-B
SL.
No.

Name of the Company

Face
Value

Cost / present Average Quoted rate Total market


No of shares
value of
per share as value as at
cost
holdings
on 31.12.14
31.12.14

Quoted:
1

AB Bank Ltd.

10

1,487,500

47,632,736

32.02

29.90

44,476,250

Bank Asia Ltd.

10

1,210,000

24,429,908

20.19

16.70

20,207,000

The City Bank Ltd.

10

1,320,000

29,538,943

22.38

21.80

28,776,000

DESCO

10

319,000

19,569,239

61.35

69.50

22,170,500

Dhaka Bank Ltd.

10

1,218,000

28,551,258

23.44

18.30

22,289,400

Eastern Bank Ltd.

10

1,000,000

37,410,456

37.41

27.20

27,200,000

Federal Insurance Company


Bangladesh Ltd.

10

2,784

20,380

7.32

16.80

46,771

Jamuna Bank Ltd.

10

1,000,000

18,370,447

18.37

12.30

12,300,000

Mutual Trust Bank Ltd.

10

364,000

6,962,625

19.13

19.80

7,207,200

10

National Bank Ltd.

10

1,100,000

27,970,098

25.43

11.40

12,540,000

11

One Bank Ltd.

10

1,012,000

22,130,581

21.87

15.80

15,989,600

12

Uttara Bank Ltd.

10

968,000

37,009,980

38.23

25.90

25,071,200

Sub Total

299,596,650

238,273,921

Unquoted:
1

Central Depository Bangladesh Ltd.

Investment in SWIFT

Market Stabilization Fund


Sub Total
Grand Total

10

4,569,443

15,694,430

3.43

4,184,430

5,000,000

15,694,430
4,184,430
5,000,000

24,878,860

24,878,860

324,475,510

263,152,781

According to the Bangladesh Bank Circular ref. DOS circular no.02 & 07 dated 16 September 2013 and 02 February 2014 respectively.
Investment in capital market limit should be within the 25% for Solo and 50% for Consolidation of total prescribed capital component.
As on 31 December 2014 Bank has invested in capital market 38.07% on Solo and 35.76% on consolidated.

365

366

1,306,112,866

319,950,486

Office equipment and machinery

Vehicles

31,690,384

As at 31 December 2014

1,410,371

Vehicles

8,015,482,024

5,680,135,592

As at 31 December 2013

287,303,685

43,212,614

244,091,071

7,728,178,339

As at 31 December 2014

Sub-total

Software-ATM

Software-Core Banking

Software-Amortization

Sub-total

6,026,748

1,637,587

Office equipment and machinery

As at 31 December 2014

2,978,790

Furniture and fixtures

Off-shore

31,690,384

Leased Vehicles

276,214,775

42,426,440

Furniture and fixtures

As at 31 December 2014

233,788,335

7,414,246,432

Office equipment and machinery

ATM

As at 31 December 2014

1,746,017

768,205,298

Furniture and fixtures

Library books

1,474,637,827

3,543,593,939

Taka

Opening
balance as on
01.01.14

Building

Land

Particulars

as at 31 December 2014

2,417,694,380

541,008,697

352,686

352,686

540,656,011

118,551

105,342

13,209

16,945,537

1,102,097

15,843,440

523,591,923

59,113

4,191,205

134,554,427

50,992,909

174,943,421

158,850,849

Taka

82,347,949

3,804,889

3,804,889

3,804,889

2,708,316

303,500

793,073

Taka

Disposals/
Additions
adjustments
during the year
during the year

COST

Schedule of fixed assets of the Bank

8,015,482,025

8,552,685,833

287,656,371

43,212,614

244,443,757

8,265,029,462

6,145,299

1,410,371

1,742,930

2,991,998

31,690,384

31,690,384

293,160,312

43,528,537

249,631,775

7,934,033,467

1,805,129

321,433,375

1,440,363,793

818,405,134

1,649,581,248

3,702,444,788

Taka

Total balance
as at 31.12.14

38,190,014

3,756,847

34,433,167

294,925,021

597,278.57

267,465.43

124,748.18

205,064.96

4,207,227

4,207,227

35,566,636

3,945,458

31,621,178

254,553,881

106,097

55,152,230

119,010,194

48,918,335

31,367,024

Taka

Charge for the


year

1,316,786,323

298,461,545

6,485,506

1,878,383

1,878,383

1,878,383

1,245,867

175,588

456,929

Taka

Disposals/
adjustments
during the year

DEPRECIATION

1,608,762,363 333,115,035.27

145,587,306

16,964,903

128,622,403

1,463,175,057

3,255,120

726,516

1,142,061

1,386,543

27,107,880

27,107,880

128,454,496

8,737,351

119,717,145

1,304,357,562

1,217,845

167,824,162

764,543,344

325,895,433

44,876,778

Taka

Opening
balance as on
01.01.14
-

1,608,762,363

1,939,999,015

183,777,321

20,721,750

163,055,571

1,756,221,695

3,852,398

993,981

1,266,809

1,591,607

31,315,106

31,315,106

164,021,131

12,682,809

151,338,323

1,557,033,059

1,323,943

221,730,526

883,377,950

374,356,839

76,243,802

Taka

Total balance
as at 31.12.14

6,406,719,662

6,612,686,818

103,879,050

22,490,864

81,388,186

6,508,807,767

2,292,900.85

416,389.82

476,120.23

1,400,390.80

375,278

375,278

129,139,181

30,845,728

98,293,453

6,377,000,408

481,186

99,702,849

556,985,843

444,048,295

1,573,337,446

3,702,444,788

Taka

Net book value


as at 31.12.14

Annexure-C

Annual Report 2014

367

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Total

2002-2003

1995 to 2000

2001

Assessment
year

Accounting
year

16,722,551,971

1,180,000,000

1,616,000,000

2,449,800,000

2,866,502,255

2,285,000,000

1,735,000,000

1,012,449,724

1,015,000,000

592,362,815

557,500,000

482,287,856

348,903,919

312,590,120

268,743,630

3,317,922,403

1,076,933,945

481,412,744

346,638,537

482,287,856

348,903,919

312,590,120

268,743,630

411,652

Taka

Taka

411,652

Tax as per
assessment order

Tax provision as
per accounts

as at 31 December 2014

12,547,023,555

1,354,221,954

1,000,000,000

2,193,417,798

2,033,288,558

1,432,194,785

915,627,471

1,019,804,475

737,606,389

470,158,263

438,405,004

342,757,186

337,138,495

247,455,962

24,947,215

Taka

Tax paid

Statement of tax position of the Bank

(259,877,589)

(61,933,945)

110,950,071

210,861,463

Taka

Excess/
(shortage)
of provision

Appealed against some disallowances made by the DCT


before the Appellate Tribunal.

Appealed against some disallowances made by the DCT


before the Appellate Tribunal.

198,449,090

Submission of tax return is yet not due.

- Return filed but the assessment is yet to completed.

- Return filed but the assessment is yet to completed.

Return filed but the assessment is yet to complete Excess


(102,313,148) payment of Tk. 102,313,148 in earlier years will be adjusted
against the tax provision of 2011.

Appealed against some disallowances made by the DCT


before the Appellate Tribunal.

(57,129,470) Completed

256,193,645 Completed

123,519,726 Completed

(43,882,852) Completed

(6,146,733) Completed

24,548,375 Completed

Present status

Assessment year 1999-2000 is final but the Tax Authority


referred it to High Court Division.

(21,287,668) Completed

24,947,215

Taka

Excess/
(shortage)
of tax paid

Annexure-D

Annual Report 2014

Name of Directors and their


interest in different entities of the Bank

Annexure-E
Sl
no.

368

Name of Directors

Status with PBL

Mr. Azam J Chowdhury


(Representative of East Coast
Shipping Lines Ltd.)

Chairman

Khandker Mohammad Khaled

Vice Chairman

Mr. M. A. Khaleque

Vice Chairman

Mr. Md. Nader Khan

Director

Entities where they have interest


East Coast Shipping Lines Ltd.
EC Distribution Ltd.
PFI Securities Limited (Corporate Interest)
East Coast Trading (Pvt.) Ltd.
EC Securities Ltd.
EC Bulk Carriers Ltd.
MJL Bangladesh Ltd. (Corporate Interest)
Bangladesh Trade Syndicate Ltd.
Green Delta Insurance Co. Ltd.
Omera Fuels Ltd. (Corporate Interest)
Nordic Woods Ltd. (Corporate Interest)
ASP Omera Crew Management Ltd. (Corporate Interest)
Prime Finance & Investment Ltd. (Corporate Interest)
Greenland Engineers & Tractors Company Limited
Machinery & Equipment Trading Company Limited
GETCO Limited
GETCO Trading Limited
GETCO Agro Vision Limited
GETCO Telecommunications Limited
GETCO Online Limited
GETCO Business Solutions Limited
GETCO Agri-Technologies Limited
Khaled Textile Mills Limited
Fareast Stocks & Bonds Limited
Fareast Islami Life Insurance Co. Ltd.
Fareast Finance & Investment Limited
Fareast Finance & Investment Limited
Fareast Stocks & Bonds Limited
Maksons Bangladesh Limited
Maksons Associates Limited
Prime Property Holdings Limited
PFI Properties Limited
Prime Prudential Fund Limited
Prime Financial Securities Limited
GETCO Limited
GETCO Agro Vision Limited
GETCO Fibers Limited
GETCO Power Limited
GETCO Elevator Company Limited
GETCO Agri Technologies
GETCO Online Limited
HRC Technologies Limited
Pragati Corporation
Pedrollo NK Limited
PNL Water Management Limited
Polyexprint Limited
PNL Holding Limited
Halda Valley Tea Company Limited
Pedrollo Dairy & Horticulture Limited
Polyexlaminate Limited
Polytape Limited
Hill Plantation Ltd.
Cider Education Services Ltd.
Halda Fisheries Ltd.

%
of Interest
25.00
40.00
5.13
20.00
89.20
20.00
52.07
65.00
0.83
75.00
45.00
50.00
8.94
42.00
42.00
37.50
51.00
27.50
60.00
48.00
34.00
50.00
55.00
10.00
1.01
4.90
1.77
7.24
50.00
50.00
20.00
10.00
10.00
20.00
37.50
27.50
37.50
27.00
30.00
40.00
40.00
40.00
100.00
40.00
35.00
30.00
20.00
15.00
2.35
2.00
1.43
0.67
19.21
5.00

Name of Directors and their


interest in different entities of the Bank

Sl
no.

Name of Directors

Status with PBL

Entities where they have interest


Prime Cement Ltd.

Mrs. Nasim Anwar Hossain

Director

Lubricants Asia Ltd.


Bengal Tiger Cement Industries Ltd.

Mr. Mafiz Ahmed Bhuiyan

Director

Director

Shepherd Consultant & Management Ltd

15.00

Quazi Sirazul Islam

Mr. Mizanur Rahman Bhuiyan


(Representative of Uniglory
Cycle Industries Ltd.)

Director

Director

20.00

Polyexprint Limited

15.00

Halda Valley Tea Co. Limited

15.00

PNL Water Management Limited

15.00

Pedrollo NK Limited

10.00

Pedrollo Dairy & Horticulture Limited

2.35

Polyexlaminate Limited

2.00

Hill Plantation Ltd.

6.67

Halda Fisheries Ltd.

5.00

Mr. Md. Shirajul Islam Mollah

Director

1.43

Amin Jewelers Limited

50.00

City Hospital Limited

30.00

Bangla Gold (Pvt.) Limited

15.00

Ducaty Apparels Limited

33.00

Meghna Bangladesh Ltd.

75.00

Meghna Wheels Ltd.

66.67

Meghna Light Industrial Products Limited

80.00

Uniglory Packaging Industries Limited

10.00

Meghna Automobiles Ltd.

40.00

Meghna Innova Rubber Co. Ltd.

70.00

Trans-world Bi-cycle Co. Ltd.

64.00

Tach-Star Packaging Limited

30.00

Executive Motors Ltd.

33.33

Uniglory Cycle Components Ltd.

27.00

Uniglory Wheels Ltd.

80.00

Uniglory Steel Products Ltd.

65.00

Uniglory Cycle Industries Limited

50.00

Meghna Rubber Industries Limited

93.34

Cycle Life Limited

75.00

Abrar Steel Industries Limited

40.00

Meghna Holdings Limited

10.00

Meghna Tyres Limited

25.00

Meghna Mainetti Limited

80.00

Uniglory Paper & Packaging Limited

10

5.00
100.00

PNL Holdings Limited

Polytape Limited

2.36
50.00

Prima Enterprise

Mr. Imran Khan

14.00

Shepherd World Trade Limited


Techno Resources Development Ltd

Annexure-E
%
of Interest
2.86

7.50

Hola Limited

10.00

Uniglory Accessories Limited

50.00

China - Bangla Ceramic Industries Ltd.

43.44

Bengal Tiger Cement Industries Ltd.

12.00

Bajnabo Textiles Mills Ltd.

50.00

Trustee Securities Ltd.

22.00

United Shipping Lines Ltd.

40.00

SR Telecom Ltd

40.00

Dhaka-Foshan Mould Company Ltd.

15.00

369

Annual Report 2014

Name of Directors and their


interest in different entities of the Bank

Sl
no.
11

12

13

Name of Directors
Mr. Md. Shahadat Hossain

Mrs. Marina Yasmin Chowdhury

Mrs. Nazma Haque

Status with PBL


Director

Director

Director

Entities where they have interest


VIP Shahadat Cold Storage
VIP Shahadat Poultry & Hatchery

50.00

Parkensine Products Ltd.

40.00

East Coast Trading (Pvt.) Ltd.

20.00

EC Securities Ltd.

3.60

EC Bulk Carriers Ltd.

20.00

East Coast Shipping Lines Ltd.

20.00

EC Distribution Ltd

40.00

Asian Gate Ltd

30.00

Acorn Limited

25.00

THANE Technology

25.00

Anirban Enterprise Ltd.

50.00

GQ Ball Pen Industries Limited


PP Woven Bag Industry
14

15

16

370

Mrs. Salma Huq

Mrs. Muslima Shirin

Mr. Nafis Sikder

17

Mr. Manzur Murshed

18

Prof. Ainun Nishat

19

Prof. Dr. Mohammed Aslam


Bhuiyan

Director

Director

Director

Independent
Director
Independent
Director
Independent
Director

Annexure-E
%
of Interest
50.00

9.92
33.40

Mosquito Coil Industry

0.13

GQ Foods Limited

26.66

GQ Enterprise Limited

68.81

Mawsons Limited

19.23

Marina Apparels Ltd.

99.00

Nafa Apparels Ltd.

99.00

Ayesha Clothing Co. Ltd.

99.00

Ayesha Washing Limited

99.00

Ayesha Fashion Limited

99.00

Safaa Sweaters Ltd

99.00

Aswad Composite Mills Limited

95.00

Cortz Apparels Limited

99.00

K.M. Apparels (Pvt.) Ltd.

99.00

Hamza Clothing Ltd.

99.00

Hamza Trims Ltd.

99.00

Modern Needlecraft Ltd.

99.00

Palmal Garments Ltd.

43.75

Palmal Garments Hosiery Ltd.

43.75

Palmal Logistics

51.00

Palmal Packaging Ltd.

10.00
N/A

N/A

N/A

N/A

N/A

N/A

Distribution of profit under


Islamic Banking operation

Annexure-F
Prime Bank Limited is operating 05 (five) Islamic Banking branches based on Islamic Shariah, which absolutely prohibits receipts
and payments of interest in any form. The operation of these 05 (five) branches are totally different from other conventional banking
branches as they operate on the basis of profit sharing arrangement.
Fixation of final profit rate for the year 2014
Provisional profit are applied to the different types of depositors at the rates to be decided by the Bank from time to time taking
into consideration of the industry trend and that of the rates of other Islamic Banks in Bangladesh. Final rates of profit are declared
annually as at 31 December in every year on the basis of income earned from different investments and other business by individual
branches and distributed as per weightage of the different deposit products.
For the year ended 31 December 2014, 70% of total investment income shall be distributed to the different types of Mudaraba
depositors (except no cost fund) according to the weightage. The remaining 30% of the investment income will be retained by the
Bank as Management fee (25%) and Investment loss Off-setting Reserve (5%).
Final Profit rate for the year 2014 is given below:
Deposit types

Weightage

Final rate of profit


for the year 2014(%)

Mudaraba Saving Deposits

0.75

5.84

Mudaraba Short Notice Deposits

0.52

4.05

36 Months

1.00

7.78

24 Months

0.98

7.63

12 Months

0.96

7.47

06 Months

0.92

7.16

03 Months

0.88

6.85

01 Month

0.88

6.85

Mudaraba Education Savings Scheme

1.20

9.34

Mudaraba Monthly Contributory Savings Scheme

1.05

8.17

Mudaraba Monthly Benefit Deposit Scheme

1.02

7.94

Mudaraba Double Benefit Scheme

1.02

7.94

Mudaraba Hajj Savings Scheme

1.20

9.34

Mudaraba Lakhpoti Deposit Scheme

1.05

8.17

Mudaraba Lakhpoti Deposit Scheme >3

1.05

8.17

Mudaraba Millionaire Deposit Scheme

1.05

8.17

Mudaraba House Building Deposit Scheme

1.05

8.17

Mudaraba My First Account

0.75

5.84

Mudaraba Sukonna Deposit

0.75

5.84

Mudaraba Nobagoto Deposit

1.05

8.17

Mudaraba 150% Deposit Scheme

1.01

7.86

Mudaraba Laksma Puran Saving Scheme

1.05

8.17

Mudaraba Brighter Tomorrow

0.96

7.47

Mudaraba Cash Waqf (Fixed)

1.20

9.34

Mudaraba Waqf (Installment)

1.20

9.34

Mudaraba Term Deposits

371

Annual Report 2014

Prime Bank Limited-Islamic Branches


Balance Sheet as at 31 December 2014

Annexure-G
Particulars

Notes

Amount in Taka
2014

2013

53,954,854

84,027,018

53,954,854

84,027,018

212,804

212,804

212,804

212,804

Government

Others

12,321,696,556

PROPERTY AND ASSETS


Cash in hand

Cash in hand (including foreign currencies)


Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies)
Balance with other banks and financial institutions

In Bangladesh
Outside Bangladesh
Placement with banks & other financial institutions

Investments in share & securities

Investments
General investments etc

10,728,159,623

Bills purchased and discounted

173,641,364

289,896,022

10,901,800,988

12,611,592,577

Fixed assets including premises

26,177,402

29,330,353

Other assets

4,997,176,910

3,413,895,473

Non - banking assets


Total assets

15,979,322,958

16,139,058,226

LIABILITIES AND CAPITAL


Liabilities
Placements from other banks, financial institutions and agents

Deposits and other accounts

10

Mudaraba savings deposits


Mudaraba term deposits
Other mudaraba deposits
Al-wadeeah current deposits and other deposits accounts
Bills payable

1,659,771,304

1,469,555,319

11,562,059,375

12,324,949,496

2,003,415,525

2,088,343,898

67,278,669

62,570,057

15,292,524,873

15,945,418,769

686,798,086

193,639,457

15,979,322,958

16,139,058,226

Paid up capital

Statutory reserve

Revaluation gain / (loss) on investments

Revaluation reserve

Other reserve

Surplus in profit and loss account / Retained earnings

Total Shareholders' equity

15,979,322,958

16,139,058,226

Other liabilities
Total liabilities

11

Capital / Shareholders' equity

Total liabilities and Shareholders' equity

372

Prime Bank Limited-Islamic Branches


Balance Sheet as at 31 December 2014

Particulars

Notes

Amount in Taka
2014

2013

OFF- BALANCE SHEET EXPOSURE


Contingent liabilities

12

Acceptances and endorsements

12.1

2,989,218,036

3,153,072,594

Letters of guarantee

12.2

732,937,880

1,045,110,938

Irrevocable letters of credit

12.3

1,962,011,752

1,550,741,407

Bills for collection

12.4

128,821,639

201,602,649

5,812,989,307

5,950,527,588

Documentary credits and short term trade -related transactions

Forward assets purchased and forward deposits placed

Undrawn note issuance and revolving underwriting facilities

Undrawn formal standby facilities , credit lines and other commitments

Other commitments

5,812,989,307

5,950,527,588

Other contingent liabilities

Other commitments

Total Off-Balance Sheet exposure including contingent liabilities

373

Annual Report 2014

Prime Bank Limited-Islamic Branches

Profit and Loss Account for the year ended 31 December 2014
Annexure-G(I)
Particulars

Notes

2014

2013

Investment income

13

1,831,292,356

2,784,445,882

Profit paid on deposits

14

(1,142,806,401)

(1,579,947,869)

688,485,955

1,204,498,013

Net investment income


Income from investment in shares / securities
Commission, exchange and brokerage

15

87,939,439

91,091,483

Other operating income

16

38,622,161

42,332,914

815,047,554

1,337,922,410

Total operating income (A)

Salaries and allowances

17

99,872,777

102,897,944

Rent, taxes, insurance, electricity, etc.

18

13,898,766

13,899,916

Legal expenses

19

672,768

731,628

Postage, stamp, telecommunication, etc.

20

5,542,033

7,832,437

Stationery, printing, advertisements, etc.

21

4,780,498

4,932,443

Chief Executive's salary and fees

Directors' fees & expenses

Shariah supervisory committee's fees and expenses

Auditors' fees

Charges on investment losses

22

Depreciation and repair of Bank's assets

23

8,011,888

7,838,369

17,343,909

18,527,960

Total operating expenses (B)

150,122,640

156,660,696

Profit / (loss) before provision (C=A-B)

664,924,915

1,181,261,714

Specific provision

General provision

Provision for off-balance sheet exposures

Provision for diminution in value of investments

Other provisions

Total provision (D)

664,924,915

1,181,261,714

Zakat expenses
Other expenses

Provision for investments

Total profit / (loss) before taxes (C-D)

374

Amount in Taka

24

25

Prime Bank Limited-Islamic Branches

Cash Flow Statement for the year ended 31 December 2014

Particulars

Amount in Taka
2014

2013

A) Cash flows from operating activities


Investment income receipts in cash
Profit paid on deposits
Dividend receipts
Fees and commission receipts in cash
Recoveries of investments previously written off
Cash payments to employees
Cash payments to suppliers
Income taxes paid

1,469,081,309

2,523,624,527

(1,213,317,191)

(1,572,272,330)

87,939,439

91,091,483

(99,872,777)

(102,897,944)

(4,780,498)

(4,932,443)

38,622,161

42,332,914

(40,053,106)

(43,450,386)

237,619,336

933,495,821

Statutory deposits

Purchase of trading securities (Treasury bills)

Investment to other banks

1,709,791,590

1,058,017,164

Receipts from other operating activities


Payments for other operating activities
Cash generated from operating activities before changes
in operating assets and liabilities
Increase / (decrease) in operating assets and liabilities

Investment to customers

(1,815,484,515)

(1,818,416,454)

Deposits from other banks

Other assets

(941,758,315)

(214,050,964)

Deposits from customers

288,864,420

(86,586,690)

Other liabilities account of customers

Trading liabilities

493,158,629

144,054,015

Other liabilities

(265,428,192)

(916,982,929)

(27,808,856)

16,512,892

Debentures

Proceeds from sale of securities

Payments for purchases of securities

(2,263,307)

5,092,915

Payment against lease obligation

Proceeds from sale of property, plant and equipment

(2,263,307)

5,092,915

Dividend paid

Net Cash from financing activities

(30,072,164)

21,605,807

Net cash from operating activities


B) Cash flows from investing activities

Purchase of property, plant and equipment

Net cash used in investing activities


C) Cash flows from financing activities

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C)


E) Effects of exchange rate changes on cash and cash equivalents

F) Cash and cash equivalents at beginning of the year

84,239,822

62,634,015

G) Cash and cash equivalents at end of the year (D+E+F)

54,167,658

84,239,822

53,954,854

84,027,018

Cash and cash equivalents at end of the year


Cash in hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies)

Balance with other banks and financial institutions

212,804

212,804

Placement with banks & other financial institutions

Prize bonds

54,167,658

84,239,822

375

376
-

Changes in accounting policy

Restated balance

Surplus / deficit on account of revaluation of properties

Adjustment of last year revaluation gain on investments

Surplus / deficit on account of revaluation of investments

Currency translation differences

Net gains and losses not recognized in the income statement

Net profit for the year

Dividends (Bonus shares)

Cash dividend

Issue of share capital

Appropriation made during the year

Balance as at 31 December 2014

Balance as at 31 December 2013

Taka

Taka

Statutory
reserve

Paid-up Capital

Balance as at 1 January 2014

Particulars

Statement of Changes in Equity for the year ended 31 December 2014

Prime Bank Limited-Islamic Branches

Taka

Revaluation
reserve

Taka

Revaluation gain / loss


on investments

Taka

Retained earnings

Taka

Total

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014 Please see PBL notes 1-2
Amount in Taka
2014
2013
1 Cash in hand
i) In local currency
ii) In foreign currency

53,288,075

82,487,257

666,779

1,539,761

53,954,854

84,027,018

Balance with Bangladesh Bank

Balance with Sonali Bank (as agent of Bangladesh Bank)

Sub-total (b)

53,954,854

84,027,018

212,804

212,804

Sub-total (a)
Cash with Bangladesh Bank and its agents

Grand total (a+b)


Required CRR and SLR of Islamic Branches are maintained at Head Office
2 Balance with other banks and financial institutions
In Bangladesh (note-2.1)
Outside Bangladesh (note-2.2)

212,804

212,804

ICB Islamic Bank Ltd., Motijheel, Dhaka

14,334

14,334

ICB Islamic Bank Ltd, Sylhet

17,016

17,016

12,603

12,603

43,953

43,953

Al Arafah Islami Bank Ltd. Dhaka

64,622

64,622

Bank Al Falah Ltd. Dhaka

36,595

36,595

Social Islami Investment Bank Ltd. Dhaka

67,635

67,635

168,851

168,851

2.1 In Bangladesh
Short-term deposit accounts

Social Islami Investment Bank Ltd. Dhaka


Savings accounts

2.2 Outside Bangladesh (NOSTRO Accounts)

212,804

212,804

3 Placement with banks & other financial institutions

4 Investment in share & securities

5 Investments
a) In Bangladesh
Quard against TDR

1,257,444,178

1,918,612,116

Bai-Murabaha (cc pledge)

3,414,628,256

3,645,849,351

Bai-Muajjal (cc hypo)

2,954,267,553

2,737,353,624

Retail investment

506,105,518

648,495,741

Izara (note-5.2)

313,017,705

491,240,293

Bai-Salam (packing credit)


Staff investment
Hire purchase
b) Outside Bangladesh

68,957,789

34,258,761

128,669,231

141,596,189

2,085,069,394

2,704,290,480

10,728,159,623

12,321,696,556

10,728,159,623

12,321,696,556

169,042,792

269,918,641

Payable Inside Bangladesh


Inland bills purchased
Payable Outside Bangladesh
Foreign bills purchased and discounted

4,598,573

19,977,381

173,641,364

289,896,022

10,901,800,988

12,611,592,577

377

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014
2013
5.1 Investments under the following broad categories
Investments
Bai-Murabaha / Bai-Muajjal
Quard against TDR
Bills purchased and discounted (note-6)
5.2 Izara
Lease rental receivable within 1 year
Lease rental receivable within 5 years
Lease rental receivable after 5 years
Total lease / Izara rental receivable
Less: Unearned interest receivable
Net lease / Izara finance
5.3 Investments on the basis of significant
concentration including bills purchased and discounted.
a) Investments to Directors of the Bank
b) Investments to Chief Executive and

other executives & officers
c) Investments to customer groups:
i) Commercial investment
ii) Export financing
iii) House building investment
iv) Retail investment
v) Small and medium enterprises
vi) Special program investment
vii) Staff investment
viii) Industrial investments
ix) Other investment

3,101,819,637
6,368,895,809
1,257,444,178
10,728,159,623
173,641,364
10,901,800,988

4,019,881,464
6,383,202,976
1,918,612,116
12,321,696,556
289,896,022
12,611,592,577

27,776,150
336,660,750
364,436,900
51,419,195
313,017,705

101,580,600
1,082,792,736
1,184,373,336
693,133,043
491,240,293

128,618,050

141,528,771

4,672,712,172
743,163,292
506,105,518
1,085,452,359
51,181
2,619,380,129
1,146,318,287

915,930,190
38,274,261
935,753,322
648,495,741
1,121,587,678
67,418
7,814,679,327
995,275,870
12,470,063,806
12,611,592,576

184,432,093
400,873,335
269,415,071
45,534,933
463,648,282
266,052,291
70,161,287
919,262,838

2,619,380,129

194,372,071
874,104,981
433,559,027
75,679,162
60,308,781
823,091,709
120,059,319
260,732,118
4,972,772,160
7,814,679,327

8,426,190,842
2,277,525,423
198,084,723
10,901,800,988

9,541,802,748
2,882,890,221
186,899,608
12,611,592,577

10,901,800,988

12,611,592,577

10,773,182,937
10,901,800,988
d)

Details of Industrial investments


i) Agricultural industries
ii) Textile industries
iii) Food and allied industries
iv) Pharmaceutical industries
v) Leather, chemical, cosmetics, etc.
vi) Tobacco industries
vii) Cement and ceramic industries
viii) Service Industries
ix) Transport and communication industries
x) Other industries including bills purchase and discounted

5.4 Investments -geographical location-wise


Inside Bangladesh
Urban
Dhaka Division
Chittagong Division
Khulna Division
Rajshahi Division
Barisal Division
Sylhet Division
Rural
Dhaka Division
Chittagong Division
Sylhet Division
Outside Bangladesh

378

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014
2013
5.5 Details of pledged collaterals
Collateral of movable / immovable assets

9,928,152,430

9,424,546,296

1,398,779,310

21,325,745

44,813,875

173,523,432

582,074,989

FDR of other banks

Personal guarantee

169,372,616

949,280,184

609,426,764

212,097,923

10,901,800,988

12,611,592,577

10,209,504,628

11,400,050,545

Local banks and financial institutions guarantee


Export documents
Fixed deposit receipts

Other securities

5.6 Particulars of investments


i)

Investments considered good in respect of which the Bank is fully secured

ii)

Investments considered good against which the Bank holds no security


other than the debtors personal guarantee

522,923,744

316,661,147

iii) Investments considered good secured by the personal undertaking of one


or more parties in addition to the personal guarantee of the debtors

169,372,616

894,880,886

iv) Investments adversely classified; provision not maintained there against

10,901,800,988

12,611,592,577

Investments due by directors or officers of the banking company or any of


them either separately or jointly with any other persons

128,669,231

141,596,189

vi) Investments due from companies or firms in which the directors of the Bank
have interest as directors, partners or managing agents or in case of private
companies, as members.

vii) Maximum total amount of investments, including temporary investment made


at any time during the year to directors or managers or officers of the banking
company or any of them either separately or jointly with any other person.

128,669,231

141,596,189

viii) Maximum total amount of investments, including temporary investments


granted during the year to the companies or firms in which the directors
of the banking company have interest as directors, partners or managing
agents or in the case of private companies, as members

ix) Due from banking companies

1,087,321,314

235,056,108

277,275,672

70,039,007

240,016,189

60,036,704

245,406,044

104,487,600

v)

x)

Classified investments
a)

Classified investments on which profit has not been charged (note-5.7)

b)

Provision on classified investments (note-5.8)

c)

Provision kept against investments classified as bad debts

d)

Profit Suspense Account (note-11)

xi) Cumulative amount of written off investments


Opening Balance

Amount written off during the year

Amount realised against investments previously written off

The amount of written off investments for which law suits have been filed

379

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014

2013

5.7 Classification of investments


Unclassified
Standard including staff investment

9,478,542,574

Special mention account (SMA)

12,137,830,784

335,937,100

238,705,685

9,814,479,674

12,376,536,469

438,693,506

33,986,865

Classified
Sub-standard
Doubtful
Bad / Loss

13,734,139

41,323,916

634,893,669

159,745,328

1,087,321,314

235,056,108

10,901,800,988

12,611,592,577

5.8 Particulars of required provision for investments


Status

Base

Rate

for provision

(%)

General Provision
Investments (Including SMA)

9,814,479,674

*Various

103,364,374

177,799,853

103,364,374

177,799,853

*General provision is kept @ 1% on general investments and 2% on small enterprise financing and 5% on consumer
financing.
Specific provision
Sub-standard
Doubtful
Bad / Loss

163,251,918

20

32,650,384

2,764,000

9,218,198

50

4,609,099

7,238,303

240,016,189

100

240,016,189

60,036,704

277,275,672

70,039,007

Required provision for investments

380,640,046

247,838,860

Provision maintained by Head Office

380,640,046

247,838,860

Excess / (short) provision at 31 December 2014


5.9 Particulars of required provision for Off-balance Sheet Exposures

Acceptances and endorsements

Base

Rate

for provision

1%

2,989,218,036

29,892,180

31,530,726

Letter of guarantee

732,937,880

7,329,379

10,451,109

Letter of credit

1,962,011,752

19,620,118

15,507,414

Required provision on Off-balance Sheet


Exposures

56,841,677

57,489,249

Provision maintained by Head Office

56,841,677

57,489,249

169,042,792

269,918,641

Excess / (short) provision at 31 December 2014


6 Bills purchased and discounted
Payable in Bangladesh
Payable outside Bangladesh

380

4,598,573

19,977,381

173,641,364

289,896,022

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014

2013

12,225,463
12,130,788
1,490,445
329,340
1,367
26,177,402

13,414,066
11,242,163
3,682,075
990,340
1,709
29,330,353

26,177,402
26,177,402

29,330,353
29,330,353

26,177,402

29,330,353

661,031
362,211,047
107,825
427,484
4,633,362,681
406,842
4,997,176,910

258,819
260,821,355
1,354,436
3,135,936,450
589,226
408,564
14,526,624
3,413,895,473

655,614,256

1,597,372,571

7 Fixed assets including premises, furniture and fixtures


Property, Plant & Equipment
Land
Building
Furniture and fixtures
Office equipment and machinery
Vehicles
Leased vehicles
Library books
ATM
Hardware & equipment
Furniture & fixture
Interior decoration

Less: Accumulated depreciation


Intangibles assets
Software-core banking
Software-ATM
Cost of intangibles assets
Less: Accumulated amortization
Net book value at the end of the year
8 Other assets
Stationery and stamps
Profit receivable
Advance income tax
Advance deposits and advance rent
Branch adjustments account
Migration account
Suspense account
Islamic transit account
Sundry assets
9 Borrowings from other banks, financial institutions and agents
In Bangladesh
Outside Bangladesh
10 Deposits and other accounts
Deposits from banks (note -10.1.a)
Deposits from customers (note-10.1.b)

14,636,910,616

14,348,046,197

15,292,524,873

15,945,418,768

Al-wadeeah current deposits

Bills payable

27,249,372

33,178,088

628,364,885

1,564,194,484

10.1 a) Deposits from Banks

Mudaraba savings deposits


Mudaraba special notice deposits
Mudaraba fixed deposits

655,614,256

1,597,372,571

381

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014
Sl No

Name of Bank

2013

Type of
Account

1 Al Arafah Islami Bank Ltd

MSB

18,022,182

14,728,547

2 Bank Al-Falah

MSB

268,818

6,345
12,167,806

3 Social Islami Bank Ltd

MSB

2,512,403

4 Islami Bank Bangladesh Ltd

MSB

6,445,969

6,275,390

27,249,372

33,178,088

Sub Total
5 Exim Bank Ltd

MSND

67,033,845

24,809,713

6 ICB Islamic Bank Ltd

MSND

2,194,509

2,120,793

7 Social Islami Bank Ltd

MSND

6,659

6,659

8 Shahjalal Islami Bank Ltd

MSND

534,472,965

1,508,450,115

9 Modhumoti Bank Ltd

MSND

28,387

5,592,532

MSND

24,376,852

23,214,672

MSND

251,668

Sub Total

628,364,885

1,564,194,484

Grand Total

655,614,256

1,597,372,572

Al-wadeeah current deposits

595,937,800

480,917,949

Foreign currency deposits

426,891,705

133,233,832

242,619

440,619

980,343,401

1,473,751,498

2,003,415,525

2,088,343,897

66,031,502

61,069,249

70,594

70,594

Demand draft payable

1,176,573

1,430,214

Foreign demand draft

10 Islami Bank Bangladesh Limited


11 Grameen Bank

b) Customer Deposits
i) Al wadeeah current deposits and other accounts

Security deposits
Sundry deposits
ii) Bills payable
Pay orders issued
Pay slips issued

T. T. payable

iii) Mudaraba savings deposits

67,278,669

62,570,057

1,632,521,932

1,436,377,231

6,730,206,248

7,013,593,729

1,297,235,007

817,285,777

iv) Mudaraba term deposits


Mudaraba fixed deposits
Mudaraba special notice deposits
Non resident Taka deposits
Mudaraba special scheme deposits

382

2,906,253,234

2,929,875,506

10,933,694,490

10,760,755,012

14,636,910,616

14,348,046,197

15,292,524,873

15,945,418,768

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014
c) Deposits and other accounts
Current deposits and other accounts
Deposits from banks (note -10.1.a)
Deposits from customers (note-10.1.b.i)
Bills payable
Deposits from banks (note -10.1.a)
Deposits from customers (note-10.1.b.ii)
Savings bank / mudaraba savings deposits
Deposits from banks (note -10.1.a)
Deposits from customers (note-10.1.b.iii)

2013

2,003,415,525
2,003,415,525

2,088,343,897
2,088,343,898

67,278,669
67,278,669

62,570,057
62,570,057

27,249,372
1,632,521,932
1,659,771,304

33,178,088
1,436,377,231
1,469,555,319

Term / Fixed deposits


Deposits from banks (note -10.1.a)
Deposits from customers (note-10.1.b.iv)

628,364,885

1,564,194,484

10,933,694,490

10,760,755,012

11,562,059,375

12,324,949,496

15,292,524,873

15,945,418,769

11 Other liabilities
Expenditure and other payables
Foreign currency held against EDF loan

3,638,087

3,294,653

437,753,955

85,857,204

Obligation under finance lease

Provision for unclassified investments

Provision for classified investment

Provision for off-balance sheet exposure

245,406,044

104,487,600

686,798,086

193,639,457

2,568,947,919

2,459,259,236

392,473,050

652,101,031

Interest suspense account


12 Contingent liabilities
12.1 Acceptances and endorsements
Back to back bills (Foreign)
Back to back bills (Local)
Back to back bills (EPZ)
Less: Margin

27,797,068

41,712,327

2,989,218,036

3,153,072,594

(474,974,398)

(717,626,079)

2,514,243,638

2,435,446,515

Letters of guarantee (Local)

245,087,592

285,838,261

Letters of guarantee (Foreign)

487,850,287

759,272,677

12.2 Letters of guarantee

Foreign counter guarantees


Less: Margin

732,937,880

1,045,110,938

(25,095,372)

(24,914,313)

707,842,508

1,020,196,625

Money for which the Bank is contingently liable in respect of guarantees given favoring:
Directors or officers

2,948,968

54,130,155

Banks and other financial institutions

487,850,287

779,238,926

Others

242,138,624

211,741,857

732,937,880

1,045,110,938

(25,095,372)

(24,914,313)

707,842,508

1,020,196,625

Government

Less: Margin

383

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014

2013

12.3 Irrevocable Letters of Credit


Letters of credit (Sight)
Letters of credit (Deferred)
Back to back L/C
Bank's liabilities PAD
Less: Margin

454,824,637

293,211,731

1,034,315,904

455,761,331

472,871,211

801,768,345

1,962,011,752

1,550,741,407

(226,951,596)

(409,040,927)

1,735,060,155

1,141,700,480

128,821,639

201,602,649

12.4 Bills for collection


Outward bills for collection
Inward local bills for collection

Inward foreign bills for collection

128,821,639

201,602,649

Less: Margin

(213,050)

128,821,639

201,389,599

13 Investment income
i) Income from general investment
Quard against TDR

19,104,773

103,973,188

Bai-Murabaha (cc pledge)

555,673,087

638,886,325

Bai-Muajjal (cc hypo)

329,868,555

459,781,751

85,207,611

110,515,252

43,528,827

95,234,116

8,391,376

(973,580)

Retail investment loan


Izara
Bai-Salam (packing credit)
Staff loan

6,706,321

7,701,644

Hire purchase

288,905,960

414,688,278

Other investments

458,920,816

886,115,704

Inland bills purchased

34,985,030

68,519,667

1,831,292,356

2,784,442,345

In Bangladesh

3,537

Out side Bangladesh

Sub-total (i)
ii) Profit on deposits with other Islamic banks

Sub-total (ii)
Grand total (i+ii)

3,537

1,831,292,356

2,784,445,882

14 Profit paid on deposits


a)

Profit paid on deposits:

Mudaraba savings deposits

67,193,263

131,447,430

Mudaraba special notice deposits

87,327,014

267,011,921

Mudaraba term deposits

653,435,120

854,344,000

Mudaraba special scheme deposits

326,800,190

323,903,776

Foreign currency deposits

Others

384

8,050,814

3,240,742

1,142,806,401

1,579,947,869

b)

Interest / Profit paid for borrowings:

Bangladesh Bank/ Other Bank/ FI/Agents bank

Islamic Bond Fund

1,142,806,401

1,579,947,869

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014

2013

15 Commission, exchange and brokerage


Commission on L/Cs-sight

13,922,444

11,913,223

Commission on L/Cs-deferred

12,432,629

8,450,202

Commission on L/Cs-back to back

29,800,863

38,729,498

Commission on L/Gs

8,056,672

6,796,222

Commission on remittance

2,277,295

2,291,493

Other commission
Exchange gain (note - 15.1) - including gain from FC dealings
Settlement fees / Brokerage

68,477

34,877

66,558,380

68,215,515

21,381,059

22,875,968

87,939,439

91,091,483

21,381,059

22,880,312

15.1 Exchange gain


Exchange gain
Less: Exchange loss

(4,344)

21,381,059

22,875,968

16 Other operating income


Rent recovered

554,038

529,500

Service and other charges

3,713,143

4,024,657

Retail Income

10,712,432

16,153,308

Income from ATM Service

3,370,950

3,501,870

7,187,553

6,239,601

Gain on sale of assets

Incidental charges

3,363,740

3,368,389

Postage / telex / SWIFT/ fax recoveries

Rebate from foreign Bank


Foreign correspondent charges
Miscellaneous earnings (note-16.1)

9,720,305

8,515,589

38,622,161

42,332,914

16.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank and sale proceeds
of various items, etc.
17 Salaries and allowances

Basic pay

50,304,090

51,707,020

Allowances

36,803,933

38,007,916

Bonus

7,948,200

8,246,000

Bank's contribution to provident fund

4,816,554

4,937,008

99,872,777

102,897,944

9,314,099

9,324,931

18 Rent, taxes, insurance, electricity, etc.

Rent, rate and taxes


Lease rent
Insurance
Power and electricity

705,852

772,645

3,878,815

3,802,340

13,898,766

13,899,916

672,768

731,628

19 Legal expenses

Legal expenses
Other professional charges

672,768

731,628

385

Annual Report 2014

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements for the year ended 31 December 2014
Amount in Taka
2014

2013

20 Postage, stamp, telecommunication, etc.

Postage
Telegram, telex, fax and e-mail
Data communication
Telephone - office
Telephone - residence

1,744,177
1,727,157
1,380,046
615,795
74,858
5,542,033

1,256,865
2,315,566
3,553,105
638,434
68,468
7,832,437

1,827,095
2,905,531
47,872
4,780,498

2,224,512
2,663,063
44,868
4,932,443

5,416,258
5,416,258

5,379,922
5,379,922

30,755
554,240
1,257,230
604,380
149,025
2,595,630
8,011,888

115,090
159,830
1,428,754
485,323
269,450
2,458,447
7,838,369

6,171,642
1,636,534
4,594,857
36,428
1,377,300
792,450
599,056
12,048
295,650
561,658
279,880
399,000
587,407
17,343,909

6,449,277
1,974,788
5,349,881
28,261
1,400
768,103
864,670
714,447
254,050
683,650
349,478
430,500
659,453
18,527,960

21 Stationery, printing and advertisements, etc.

Office and security stationery


Computer consumable stationery
Publicity and advertisement
22 Charges on loan losses

Loan -written off


Interest waived
23 Depreciation and repair of Bank's assets

Depreciation
Fixed assets
Leased assets
Repairs
Building
Furniture and fixtures
Office equipment
Bank's vehicles
Maintenance
24 Other expenses

Security and cleaning


Entertainment
Car expenses
Books, magazines and newspapers, etc.
Medical expenses
Bank charges and commission paid
Loss on sale of assets
Finance charge for lease assets
Retail Expenses
Traveling expenses
Local conveyance, labor, etc.
Business development
Training and internship
Remittance charges
Laundry, cleaning and photographs, etc.
Exgratia
Miscellaneous expenses
25 Provision for investments & off -balance sheet exposure

Provision for bad and doubtful investments


Provision for unclassified investments
Provision for off-balance sheet exposure
Provision for other assets

386

387

236,494,077,066

Segment liabilities

229,510,753,784

** PBSL-Prime Bank Securities Limited

** PBIL- Prime Bank Investment Limited

* Prime Exchange Company Pte. Ltd Singapore, PBL Exchange (UK) Ltd & PBL Finance (Hong Kong) Ltd

229,510,753,784

Segment liabilities

1,727,974,914

(887,200,000)

2,615,174,914

Segment assets

Net profit

Income tax including deferred tax

Profit / (loss) before tax

(2,876,588,089)

11,091,265,897

Operating profit (Profit before unallocated expenses and tax)

Provision against loans and advances, Others

11,091,265,897

Total income
(5,599,502,894)

(458,175,268)

Allocated expenses

11,549,441,165

Less: Inter segmental income

1,202,344,041

(31,472,621)
(98,834)
(31,571,455)
1,202,344,041

(3,246,640)

(27,327,168)

(898,813)

(898,813)

(898,813)

PBSL

15,979,322,958

15,979,322,958

664,924,915

664,924,915

(150,122,640)

815,047,554

815,047,554

815,047,554

Islamic Banking

7,217,888,655

(176,707,682)
(7,675,068)
(184,382,750)
7,217,888,655

Conventional Banking
including OBU

8,995,999,676

132,338,673
132,338,673
8,995,999,676

(58,799,620)
(195,497,963)

Income

Particulars

II) Business Segment

3,147,761,155
(887,200,000)
2,260,561,155
236,494,077,066

(23,195,920)

(5,726,429,614)

(2,876,588,089)

Provision against loans and advances, others

Profit / (loss) before tax


Income tax including deferred tax
Net profit
Segment assets

155,534,593

11,750,778,858
-

77,589,901

155,534,593
77,589,901

77,589,901

155,534,593

PBIL

11,750,778,858
11,750,778,858

PBL(Conventional Off Shore Banking


& Islamic Banking)
Units

Inside Bangladesh

Income
Less: Inter-segmental income
Total income
Operating profit (Profit before unallocated
expenses and tax)
Allocated expenses

Particulars

I) Geographical Segment

of Prime Bank Limited as at 31 December 2014

Financial Reporting by Segment of the Group

44,636,299

2,439,019,694

2,439,019,694

68,591,343

(11,717,071)

80,308,413

(150,803,625)

231,112,038

231,112,038

231,112,038

2,321,590,422

66,028,804
(10,870,823)
55,157,980
2,321,590,422

(47,147,565)

113,176,368

8,420,232,696

8,420,232,696

(215,954,205)

(7,773,902)

(208,180,303)

(198,744,603)

(86,126,788)

76,691,088

76,691,088

76,691,088

** Investment
(PBIL+PBSL)

41,601,324

(1,905,168)
(1,905,168)
41,601,324

(46,541,466)

* Remittance (Outside
BD)

75,827,949

16,184,777
(846,247)
15,338,530
75,827,949

(57,114,594)

73,299,371

PBL Finance
(Hong Kong)
Ltd.
113,176,368
113,176,368

Outside Bangladesh
Prime Exchange
PBL Exchange
Pte. Ltd.
(UK) Ltd.
(Singapore)
73,299,371
44,636,299
73,299,371
44,636,299

256,349,329,132

256,349,329,132

2,245,536,965

(906,690,973)

3,152,227,938

(3,075,332,692)

(5,986,555,947)

12,214,116,577

12,214,116,577

(458,175,268)

12,672,291,845

Total

256,349,329,133

3,152,227,939
(906,690,973)
2,245,536,966
256,349,329,133

(3,075,332,692)

(5,986,555,946)

12,214,116,577

12,214,116,577
12,214,116,577

Total

Annexure-H

388

Chairman

Net liquidity gap (A-B):

Director

5,391,868,993

34,627,456,736

89,275,355

Provision and other liabilities

Total liabilities (B):

2,942,889,234

30,840,210,630

755,081,517

40,019,325,729

Other accounts (note-13a.6)

Deposits (note-13a.6)

Borrowings from Bangladesh Bank, other banks, financial institutions


and agents (note-12a.4)

Liabilities:

Total assets (A):

91,804,093

Other assets

Non banking assets

56,642,992

30,925,806,865

3,097,836,950

Fixed assets including premises, furniture and fixtures

Loans and advances / investments (note-7a.1)

Investments (note-6a.1)

1,412,686,578

Balance with other banks and financial institutions (note-4a.3)

Money at call and short notice

4,434,548,251

Up to 1 month

Cash in hand (note-3a.4)

Assets:

Particulars

(7,470,084,528)

52,375,736,803

51,338,023

52,324,398,780

44,905,652,275

2,602,981,707

128,842,350

24,803,590,283

17,270,237,935

100,000,000

1-3 months

(Analysis of maturity of assets and liabilities) As at 31 December 2014

Liquidity Statement of the Bank

Director

23,142,572,137

39,273,178,865

5,310,728,935

31,623,967,930

2,338,482,000

62,415,751,002

210,081,160

179,235,798

52,909,983,172

9,116,450,872

3-12 months

153,476,611

55,115,885,561

1,290,414,068

49,250,159,050

4,575,312,443

55,269,362,172

3,345,273,685

1,154,308,119

36,009,389,193

14,760,391,175

1-5 years

3,242,878,767

49,059,230,124

11,203,125,180

37,856,104,944

52,302,108,890

176,340,640

2,817,082,531

5,093,657,559

2,717,882,879

28,396,910,612

13,100,234,670

Above 5 years

Managing Director

24,460,711,980

230,451,488,089

17,944,881,561

2,942,889,234

201,894,841,335

7,668,875,959

254,912,200,069

176,340,640

9,067,223,176

6,612,686,818

147,366,652,393

72,641,827,544

1,512,686,578

17,534,782,921

Total

Annexure-I

Annual Report 2014

389

2,942,889,234

Other accounts

34,667,482,153
7,669,546,403

Total liabilities (B):

Net liquidity gap (A-B):

93,799,325

30,834,917,191

Deposits

Provision and other liabilities

795,876,404

42,337,028,557

Borrowings from Bangladesh Bank, other banks, financial institutions


and agents

Liabilities:

Total assets (A):

32,181,138

Other assets

Non banking assets

56,951,072

32,710,088,393

3,574,030,738

Fixed assets including premises, furniture and fixtures

Loans and advances / investments

Investments

1,504,236,605

Balance with other banks and financial institutions

Money at call and short notice

4,459,540,611

Up to 1 month

Cash in hand

Assets:

Particulars

(7,120,876,722)

52,373,279,908

53,939,544

52,319,340,364

45,252,403,186

902,690,595

129,543,122

26,135,640,853

17,984,528,616

100,000,000

1-3 months

(Analysis of maturity of assets and liabilities) As at 31 December 2014

Consolidated Liquidity Statement

22,426,794,317

40,313,948,025

6,228,724,763

31,620,399,791

2,464,823,471

62,740,742,342

72,854,253

180,210,658

53,371,226,559

9,116,450,872

3-12 months

448,540,620

55,350,900,285

1,290,414,068

49,237,982,774

4,822,503,443

55,799,440,905

2,134,178,582

1,160,586,383

37,744,284,765

14,760,391,175

1-5 years

1,157,601,537

49,062,112,605

11,214,125,179

37,847,987,426

50,219,714,142

176,340,640

2,871,010

5,121,361,881

2,757,995,330

29,060,910,612

13,100,234,670

Above 5 years

24,581,606,157

231,767,722,976

18,881,002,879

2,942,889,234

201,860,627,546

8,083,203,317

256,349,329,133

176,340,640

3,144,775,578

6,648,653,116

152,719,235,900

74,496,312,013

1,604,236,605

17,559,775,281

Total

Annexure-I (1)

Annual Report 2014

Highlights of The Bank


Annexure-J
(Taka in million)
Sl. #

390

Particulars

2014

2013

Paid-up capital

10,293.49

10,293.49

Total capital (Consolidated)

27,423.70

26,811.97

Total capital (Solo Basis)

27,312.77

26,495.44

Capital surplus / (deficit) (Consolidated)

5,791.27

4,532.82

Capital surplus / (deficit) (Solo Basis)

5,823.59

4,493.43

Total assets

254,912.20

243,868.80

Total deposits

204,837.73

201,907.14

Total loans and advances / investments

147,366.65

153,588.76

Total contingent liabilities and commitments

118,111.17

116,414.90

10

Credit deposit ratio

71.94%

76.07%

11

Percentage of classified loans / investments against total loans and advances /


investments

7.61%

5.09%

12

Profit after tax and provision

2,392.90

1,829.50

13

Amount of classified loans / investments during the year

11,214.64

7,814.50

14

Provisions kept against classified loans / investments

4,165.30

3,342.05

15

Provision surplus / (deficit) against classified loans / investments

23.78

10.22

16

Cost of fund

7.36%

8.80%

17

Interest earning assets

221,521.17

211,398.98

18

Non-interest earning assets

33,391.03

32,469.83

19

Return on investment (ROI)

9.56%

10.86%

20

Return on assets (ROA)

0.96%

0.76%

21

Income from investment

6,194.36

5,582.71

22

Earnings per share (Taka)

2.32

1.78

23

Net income per share (Taka)

2.32

1.78

24

Price earning ratio (times)

8.43

14.57

FINANCIAL STATEMENTS
(ANNEXURE-K)

OFF-SHORE BANKING UNITS

391

Annual Report 2014

Off-shore Banking Units

Balance Sheet as at 31 December 2014


Particulars

Notes

PROPERTY AND ASSETS


Cash
In hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies)
Balance with other banks and financial institutions
In Bangladesh
Outside Bangladesh
Loans and advances
Loans, cash credits, overdrafts, etc.
Bills purchased and discounted
Fixed assets including premises, furniture and fixtures
Other assets
Non - banking assets
Total assets
LIABILITIES AND CAPITAL
Liabilities
Borrowings from other banks, financial institutions and agents
Deposits and other accounts
Current deposits
Bills payable
Savings bank deposits
Term deposits
Bearer certificate of deposit
Other liabilities
Total liabilities
Capital / Shareholders' equity
Paid up capital
Statutory reserve
Foreign currency gain
Other reserve
Deficit in profit and loss account / Retained earnings
Total Shareholders' equity

2014
USD

2013
Taka

Taka

3,698,555
3,698,555

288,300,173
288,300,173

347,658,546
347,658,546

4
5

77,029,695
33,711,251
110,740,946
33,593
935,103
115,408,197

6,004,418,487
2,627,771,777
8,632,190,264
2,618,535
72,890,705
8,995,999,676

3,592,242,835
2,457,608,207
6,049,851,042
3,091,918
5,618,574
6,406,220,080

110,826,709

8,638,875,435

6,174,618,379

2,105,781
2,105,781

164,144,402
164,144,402

93,753,151
93,753,151

10

2,475,707
115,408,197

192,979,839
8,995,999,676

137,848,550
6,406,220,080

115,408,197

8,995,999,676

6,406,220,080

227,296
5,681,742
9,667,692
15,576,730

17,717,568
442,888,358
753,590,824
1,214,196,750

17,672,245
499,139,380
779,617,066
1,296,428,691

15,576,730

1,214,196,750

1,296,428,691

6
7

Total liabilities and Shareholders' equity


OFF- BALANCE SHEET EXPOSURES
Contingent liabilities
Acceptances and endorsements
Letters of guarantee
Irrevocable letters of credit
Bills for collection
Other contingent liabilities
Other commitments
Documentary credits and short term trade -related transactions
Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving underwriting facilities
Undrawn formal standby facilities , credit lines and other commitments
Liabilities against forward purchase and sale
Other commitments
Total Off-Balance Sheet exposures including contingent liabilities

392

11

Off-shore Banking Units

Profit and Loss Account for the year ended 31 December 2014

Particulars

Notes

2014
USD

2013
Taka

Taka

Interest income

12

4,595,965

356,708,919

237,699,454

Interest paid on deposits, borrowings, etc.

13

(2,964,386)

(230,076,343)

(134,334,236)

1,631,579

126,632,576

103,365,218

Net interest
Commission, exchange, brokerage, etc.

14

234,922

18,233,143

16,732,483

Other operating income

15

137,462

10,668,874

7,689,346

2,003,963

155,534,593

127,787,047

Total operating income (A)

Salaries and allowances

16

132,575

10,289,648

10,985,512

Rent, taxes, insurance, electricity, etc.

17

10,626

824,702

855,636

379

29,406

40,662

Legal expenses
Postage, stamp, telecommunication, etc.

18

1,545

119,938

195,127

Stationery, printing, advertisements, etc.

19

3,166

245,759

285,516

Auditors' fees
Depreciation and repair of Bank's assets

20

8,326

646,173

658,226

Other expenses

21

142,247

11,040,294

2,910,067

298,865

23,195,920

15,930,746

1,705,099

132,338,673

111,856,301

Specific provision

General provision

Provision for diminution in value of investments

Other provision

Total provision (D)

1,705,099

132,338,673

111,856,301

Current tax

Deferred tax

1,705,099

132,338,673

111,856,301

Total operating expenses (B)


Profit / (loss) before provision (C=A-B)
Provision for loans and advances / investments

Total profit / (loss) before taxes (C-D)


Provision for taxation

Net profit / (loss) after taxation

393

Annual Report 2014

Off-shore Banking Units

Cash Flow Statement for the year ended 31 December 2014


Particulars

2014
USD

2013
Taka

Taka

A) Cash flows from operating activities


Interest receipts in cash

4,595,965

356,708,919

237,699,454

(2,964,386)

(230,076,343)

(134,334,236)

234,922

18,233,143

16,732,483

(132,575)

(10,289,648)

(10,985,512)

Cash payments to suppliers

(19,697)

(1,528,790)

(1,679,870)

Receipts from other operating activities

137,462

10,668,874

7,689,346

(138,896)

(10,780,204)

(2,628,704)

1,712,794

132,935,951

112,492,961

Interest payments
Fees and commission receipts in cash
Cash payments to employees

Payments for other operating activities


Cash generated from operating activities before changes in
operating assets and liabilities
Increase / (decrease) in operating assets and liabilities
Loans and advances to other banks
Loans and advances to customers
Other assets
Deposits from other banks / borrowings
Deposits from customers
Other liabilities
Net cash used in operating activities

(32,929,357)

(2,566,823,592)

(1,283,481,494)

(862,838)

(67,257,721)

(5,502,433)

899,953

70,150,809

(56,661,099)

(1,002,364)

(78,133,658)

(118,196,586)

(33,894,605)

(2,642,064,161)

(1,463,841,612)

(32,181,811)

(2,509,128,210)

(1,351,348,651)

(1,521)

(118,551)

(31,807)

B) Cash flows from investing activities


Purchase / sale of property, plant and equipment
Proceeds from sale of property, plant and equipment

(1,521)

(118,551)

(31,807)

31,410,395

2,448,421,444

1,536,886,081

31,410,395

2,448,421,444

1,536,886,081

(772,937)

(60,825,317)

185,505,623

1,466,944

(4,898,407)

4,471,493

347,658,546

167,051,330

3,698,555

288,300,173

347,658,546

Cash in hand (including foreign currencies)

Balance with Bangladesh Bank and its agent bank (s)

3,698,555

288,300,173

347,658,546

3,698,555

288,300,173

347,658,546

Net cash used in investing activities


C) Cash flows from financing activities
Borrowing from Prime Bank Limited, Other Bank and
Bangladesh Bank
Net cash from financing activities
D) Net increase / (decrease) in cash and cash equivalents (A+ B + C)
E) Effects of exchange rate changes on cash and cash equivalents
F) Cash and cash equivalents at beginning of the year
G) Cash and cash equivalents at end of the year (D+E+F)
Cash and cash equivalents at end of the year

(including foreign currencies)


Balance with other banks and financial institutions

394

Notes to the Financial Statements


for the year ended 31 December 2014

1.1 Status of the units


Off-shore Banking Units of Prime Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank
obtained the Off-shore Banking Unit permission vide letter no. BRPD (P) 744 (84)/2001-868 dated 19 March 2001. The
Bank commenced the operation of its Off-shore Banking Unit from March 15, 2007. Presently the Bank has 3 (Three) units
in Dhaka, Adamjee EPZ and Chittagong.
1.1.1 Principal activities
The principal activities of the units are to provide all kinds of commercial banking services to its customers through its
Off-shore Banking Units in Bangladesh.
1.2 Significant accounting policies and basis of preparation of financial statements
1.2.1 Basis of accounting
The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the Bank
Companies Act 1991, Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank.
1.2.2 Use of estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
1.2.3 Foreign currency transaction
a) Foreign currencies translation
Foreign currency transactions are converted into equivalent Taka using the ruling exchange rates on the dates of
respective transactions as per BAS-21" The Effects of Changes in Foreign Exchange Rates". Foreign currency balances
held in US Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh
Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into
equivalent US Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent.
b) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated
at contracted rates. Contingent liabilities / commitments for letter of credit and letter of guarantee denominated in
foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.
c) Translation gains and losses
The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on
the translation of net investment in foreign subsidiary.
1.2.4 Cash flow statement
Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 " Cash Flow
Statement" under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the
Banking Regulation & Policy Department of Bangladesh Bank.
1.2.5 Reporting period
These financial statements cover from January 01 to December 31, 2014.
1.3 Assets and basis of their valuation
1.3.1 Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and
highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit
management for its short-term commitments.
1.3.2 Loans and advances / investments
a) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis.
b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not charged on
bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum
accounts.
1.3.3 Fixed assets and depreciation
a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 Property, Plant and Equipment. The
cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its
working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.
b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets.

395

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

Category of fixed assets

Rate

Furniture and fixtures

10%

Office equipment

20%

c) For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation
is charged up to the date of disposal.
1.4 Basis for valuation of liabilities and provisions
1.4.1 Benefits to the employees
The retirement benefits accrued for the employees of the units as on reporting date have been accounted for in
accordance with the provisions of Bangladesh Accounting Standard-19, "Employee Benefit". Bases of enumerating the
retirement benefit schemes operated by the Bank are outlined below:
a) Provident fund
Provident fund benefits are given to the permanent staffs of the OBU under the Provident Fund Rules of the Bank. The
Commissioner of Income Tax, Taxes Zone - 5, Dhaka has approved the Provident Fund as a recognized provident fund
within the meaning of section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984.
The recognition took effect from 07 July 1997. The Fund is operated by a Board of Trustees consisting six members (03
members from management and other 03 members from the Board of Directors) of the Bank. All confirmed employees
of the Units are contributing 10% of their basic salary as subscription to the Fund. The units also contribute equal amount
of the employees' contribution. Interest earned from the investments is credited to the members' account on yearly basis.
b) Gratuity fund
The Bank operates a funded gratuity scheme on "Continuing Fund Basis", in respect of which provision is made annually according
to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with Bank Service Rules.
The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved the Prime Bank Limited
Employees' Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.035.02.0016.2013/217, dated 22/07/2013)
within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First Schedule of Income Tax Ordinance 1984. The
recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees consisting six members (03 members from
the Board of Directors and other 03 members from management) of the Bank. Actuarial valuation of gratuity scheme has been
made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 Employees Benefit".
c) Welfare fund
Prime Bank's employees' welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes
to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental death or
permanent disabilities of the employees. Disbursement from the fund is done as per rules for employees' welfare fund.
Welfare fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited.
d) Incentive bonus
Prime Bank started a incentive bonus scheme for its employees. 10% of net profit after tax is given by the Board of directors
in every year for its employees. These bonus amount distributed among the employees as per performance. The bonus
amount are paid annually, normally first quarter of every following year and the cost are accounted for the period to which
it relates. Provision for incentive bonus for Off-shore Banking Units is kept with Head Office, Prime Bank Limited.
1.4.2 Provision for liabilities
A provision is recognised in the balance sheet when the unit has a legal or constructive obligation as a result of a past
event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with
the BAS 37 "Provisions, Contingent Liabilities and Contingent Assets".
1.5 Revenue recognition
1.5.1 Interest income
In terms of the provisions of the BAS-18 "Revenue", the interest income is recognized on accrual basis.
1.5.2 Fees and commission income
Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission
charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.
1.5.3 Interest paid and other expenses
In terms of the provisions of the BAS - 1 "Presentation of Financial Statements" interest and other expenses are recognized
on accrual basis.
2 General
a) These financial statements are presented in Taka, which is the Banks functional currency. Figures appearing in these
financial statements have been rounded off to the nearest Taka.
b) Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 77.9494 (closing
rate as at 31st December 2014) and Tk.77.6135 (average rate which represents the year end).

396

Notes to the Financial Statements


for the year ended 31 December 2014

2014
USD

2013
Taka

Taka

3 Balance with other banks and financial institutions


In Bangladesh (note-3.1)
Outside Bangladesh (note-3.2)
3.1 In Bangladesh

3,698,555

288,300,173

347,658,546

3,698,555

288,300,173

347,658,546

3,698,555

288,300,173

347,658,546

57,044,185

4,446,560,011

1,760,328,910

6,516,199

507,933,785

742,662,715

3.2 Outside Bangladesh (Nostro accounts)


Current account
Citibank N.A., New York, USA
4 Loans and advances
i) Loans, cash credits, overdrafts, etc.
Loan (General)
Hire purchase
Lease finance

Over Draft

1,238,184

96,515,708

96,268,814

T.R Loan

12,231,127

953,408,983

992,982,397

77,029,695

6,004,418,487

3,592,242,835

20,964,720

1,634,187,335

1,409,272,204

12,746,531

993,584,442

1,048,336,003

ii) Bills purchased and discounted (note-5)


Payable Inside Bangladesh
Inland bills purchased
Payable Outside Bangladesh
Foreign bills purchased and discounted

33,711,251

2,627,771,777

2,457,608,207

110,740,946

8,632,190,264

6,049,851,042

20,964,720

1,634,187,335

1,409,272,204

12,746,531

993,584,442

1,048,336,003

33,711,251

2,627,771,777

2,457,608,207

5 Bills purchased and discounted


Payable in Bangladesh
Payable outside Bangladesh

6 Fixed assets including premises, furniture and fixtures


Cost
Furniture and fixtures

21,718

1,692,925

1,880,845

Office equipment and machinery

7,280

567,449

585,892

Vehicle

4,595

358,161

625,181

33,593

2,618,535

3,091,918

1,339

104,377

104,110

7 Other assets
Advance deposits and advance rent
Stationery A/c & Stamp in hand

437

34,078

40,792

Suspense

553,526

43,147,019

5,473,673

Due from Head Office

379,801

29,605,231

935,103

72,890,705

5,618,574

397

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

2014
USD

2013
Taka

Taka

8 Borrowings from other banks, financial institutions and agents


Bangladesh Bank
Prime Bank Limited
Other Bank & Financial Institutes

55,826,709

4,351,658,435

5,008,368,379

55,000,000

4,287,217,000

1,166,250,000

110,826,709

8,638,875,435

6,174,618,379

OBU has been enjoying foreign currency loan of US$ 20,000,000 from International Finance Corporation bearing
interest @ 3.25% with 3 months LIBOR & USD $ 25,000,000 from FMO, Netherland bearing interest @ 3.80% with 6
months LIBOR and USD $ 10,000,000 from Commercial Bank of Qatar bearing interest @ 3.40% on quarterly basis.
9 Deposits and other accounts
Bank deposits
Customer deposits and other accounts (note-9.1)

2,105,781

164,144,402

93,753,151

2,105,781

164,144,402

93,753,151

761,458

59,355,218

56,442,058

181,317

14,133,526

14,097,371

845,000

65,867,243

9.1 Customer deposits and other accounts


Current deposits
Foreign currency deposits
Fixed Deposit
Security deposits receipts
Sundry deposits

318,006

24,788,415

23,213,722

2,105,781

164,144,402

93,753,151

32,578

2,539,430

10 Other liabilities
Interest on bills discount
Interest on borrowing
Provision for Expenses/adjusting A/C credit

477,862

37,249,073

6,470,680

Interest Suspense A/c

260,168

20,279,920

20,023,985

Due to Head Office

1,705,099

132,911,416

111,353,884

2,475,707

192,979,839

137,848,550

11 Contingent liabilities
11.1 Acceptance & endorsement
Back to Back bills
Less: Margin
11.2 Letters of guarantee
Letters of guarantee (Local)

227,296

17,717,568

17,672,245

Letters of guarantee (Foreign)

Foreign counter guarantees

227,296

17,717,568

17,672,245

227,296

17,717,568

17,672,245

5,681,742

442,888,358

499,139,380

5,681,742

442,888,358

499,139,380

5,681,742

442,888,358

499,139,380

Less: Margin
11.3 Irrevocable Letters of credits
Letters of credits
Back to Back letter of credit
Less: Margin

398

Notes to the Financial Statements


for the year ended 31 December 2014

2014
USD

2013
Taka

Taka

11.4 Bills for collection


Outward local bills for collection

9,667,692

753,590,824

779,617,066

Inward local bills for collection

Inward foreign bills for collection

9,667,692

753,590,824

779,617,066

9,667,692

753,590,824

779,617,066

2,526,686

196,104,937

30,966,367

1,121,445

Outward foreign bills for collection

Less: Margin
12 Interest income
Loan (general)
SOD
LTR loan

148,605

11,533,784

19,918,659

Lease finance

Hire purchase

564,267

43,794,718

59,722,734

Payment against documents


Documentary bills purchased
Others

1,353,034

105,013,695

125,116,889

4,592,592

356,447,134

236,846,093

3,373

261,785

853,361

3,373

261,785

853,361

4,595,965

356,708,919

237,699,454

1,538

119,331

b) Interest paid on local bank accounts

1,639,914

127,279,499

114,608,821

c) Interest paid on foreign bank accounts

1,322,934

102,677,512

19,725,415

2,964,386

230,076,343

134,334,236

120,213

9,330,134

6,928,998

Interest on loans and advances


Interest on balance with other banks and financial
institutions
Interest received from FC account
Total Interest income
13 Interest on deposits, borrowings, etc.
a) Interest paid on deposits

d) Interest paid on Bangladesh Bank

14 Commission, exchange and brokerage


Commission on L/Cs
Commission on L/Gs

2,928

227,244

Commission on export bills

37,881

2,940,106

3,567,123

Commission on accepted bills

40,536

3,146,116

3,766,777

Commission on OBC, IBC, etc.

781

1,305

101,286

36,707

32,060

2,488,258

2,432,098

234,922

18,233,143

16,732,483

Commission on bills purchased

Commission on PO, DD, TT, TC, etc.


Commission for services rendered to issue of shares
Other commission
Exchange gain including gain from FC dealings
Brokerage

234,922

18,233,143

16,732,483

399

Annual Report 2014

Notes to the Financial Statements


for the year ended 31 December 2014

2014
USD

Taka

2013
Taka

15 Other operating income


Postage charge recovery
Service & other charge
SWIFT charge recovery
Miscellaneous earnings

2,587
10,725
124,150
137,462

200,786
832,378
9,635,711
10,668,874

194,783
1,022,430
6,472,133
7,689,346

61,593
54,413
10,586
5,983
132,575

4,780,486
4,223,165
821,627
464,369
10,289,648

5,117,143
4,536,307
834,875
497,187
10,985,512

7,881
211
2,533
10,626

611,695
16,381
196,626
824,702

621,867
55,291
178,478
855,636

717
612
216
1,545

55,664
47,527
16,747
119,938

81,735
92,409
20,983
195,127

1,171
1,928
68
3,166

90,890
149,621
5,248
245,759

85,047
145,036
55,433
285,516

7,696
7,696

597,279
597,279

636,661
636,661

102
335
194
630
8,326

7,893
25,980
15,021
48,894
646,173

8,510
13,055
21,565
658,226

10,796
996
3,969
69
1,385
723
770
123,539
142,247

837,889
77,322
308,071
5,351
107,469
56,136
59,748
9,588,307
11,040,294

957,078
100,565
720,428
333,167
5,658
59,186
72,476
3,543
657,965
2,910,067

16 Salaries and allowances


Basic pay
Allowances
Bonus
Unit's contribution to provident fund
Retirement benefits and gratuity
17 Rent, taxes, insurance, electricity, etc.
Rent, rate and taxes
Insurance
Power and electricity
18 Postage, stamp, telecommunication, etc.
Postage
Telegram, telex, fax and e-mail
Telephone - office
Telephone - residence
19 Stationery, printing and advertisements, etc.
Office and security stationery
Computer consumable stationery
Publicity and advertisement
20 Depreciation and repair of Bank's assets
Depreciation
Fixed assets
Leased assets
Repairs
Furniture and fixtures
Office equipment
Vehicle
Maintenance

21 Other expenses
Security and cleaning
Entertainment
Bank charge & Commission
Car expenses
Books, magazines and newspapers, etc.
Travel expenses
Local conveyance, labor, etc.
Training & internship
Other Professional Charges
Exgratia
Miscellaneous expenses

400

FINANCIAL STATEMENTS
(ANNEXURE-L)

PRIME BANK INVESTMENT LIMITED

401

Annual Report 2014

Auditors Report To The Shareholders


of Prime Bank Investment Limited

Introduction
We have audited the accompanying financial statements of Prime Bank Investment Limited, which comprise the
Statement of Financial Position as at December 31, 2014 and the Statement of Comprehensive Income, Statement of
Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the period then ended, and a
summary of significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules
1987 and other applicable laws and regulations and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with Bangladesh Standards on Auditing (BSAs). Those standards require that we comply with relevant
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risk of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the
auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank
Investment Limited as at December 31, 2014 and its financial performance and its cash flows for the period then
ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities
and Exchange Rules 1987.
We also report that:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared
from our examination of those books;
c) the Statement of Financial Position and the Statement of Comprehensive Income dealt with the report are in
agreement with the books of accounts and returns;
d) the expenditure incurred and payments made were for the purpose of the Companys business for the period;


Chartered Accountants

402

Dated: February 25, 2015


Dhaka

Prime Bank Investment Limited


Statement of Financial Position
As at 31 December 2014

Amount in Taka
31.12.2014

31.12.2013

ASSETS
Non-Current Assets
Property, plant and equipment

12,804,672

17,924,016

37,500,000

37,500,000

Preliminary and pre-operational expenses

2,614,571

3,137,486

Deferred tax asset

344,306

53,263,549

58,561,502

Advances, deposits and prepayments

6,016,517,292

6,503,380,927

Investment in shares

1,102,855,608

1,066,059,442

Dividend Receivable

4,018,805

4,468,239

765,968

56,168

7,603,618

15,972,649

32,863,813

87,686,951

Investment in Prime Bank Securities Ltd

Total non-current assets


Current Assets

Prepaid expenses
Advance corporate income tax
Cash and bank balances
Total current assets
Total Assets

7,164,625,104

7,677,624,376

7,217,888,653

7,736,185,876

3,000,000,000

3,000,000,000

EQUITY AND LIABILITIES


Capital and Reserve
Share capital
General Reserve

28,002,888

28,002,888

15,117,108

198,499,857

3,043,119,996

3,226,502,745

Deferred tax liabilities

513,315

Total non-current liabilities

513,315

Retained earnings
Total Equity
Non-current Liabilities

Current Liabilities
3,387,911,205

3,788,934,831

Liability for withholding taxes

Loan facilities

95,625

79,303

Security deposit receipt

44,100

44,100

Provision for expenses


Provision for investment and margin loan
Corporate income tax payable
Accounts payable
Dividend payable
Other payables
Total current liabilities
Total Equity and Liabilities

Chief Executive Officer

Chartered Accountants

Director

4,161,269

7,972,785

700,000,000

504,502,037

8,534,689

29,139,720

673,694

601,331

10

10

74,348,064

177,895,701

4,175,768,656

4,509,169,818

7,217,888,653

7,736,185,878

Vice Chairperson

Dated: 25 February 2015


Dhaka

403

Annual Report 2014

Prime Bank Investment Limited

Statement of Comprehensive Income


for the year ended 31 December 2014

Amount in Taka
Jan-Dec14

Jan-Dec13

INCOME
Interest income

391,826,475

455,964,116

Settlement fee

53,211,749

45,258,899

Management fee

19,872,877

21,232,690

Gain on sale of shares

29,691,761

252,033,568

31,836,370

24,160,056

539,612

225,000

Dividend on shares
Underwriting commission
Issue management fee
Bank interest on STD accounts
Documentation fees

100,000

50,000

3,201,399

5,601,605

19,000

17,000

530,299,243

804,542,934

EXPENDITURE
Interest expenses

452,709,342

568,950,077

Settlement and other fees

6,565,430

6,260,808

Salary and allowances

28,775,522

31,576,176

Rent, Taxes, Insurance and Electricity

7,993,200

7,649,825

238,050

125,525

Legal & Professional expenses


Postage, Stamp and Telecommunication
Stationery, Printing and Advertisement
Directors remuneration
Auditor's fee
Depreciation, Amortisation and Repair of assets

1,512,472
932,710

239,250

59,450

115,000

115,000

6,428,119

6,263,540

Entertainment, Travelling & Conveyance

1,261,030

1,895,940

Security expense

2,021,006

1,991,839

Other expenses

1,559,232

1,475,824

Interest waiver to affected small investors

1,299,153

7,218,567

510,508,960

636,027,753

Profit before provision and tax

18,790,283

168,515,181

Less: Provision for investment and margin loan

195,497,963

(176,707,681)

168,515,181

Less: Tax expenses

7,675,068

28,500,742

Current Tax expense

8,532,689

29,190,904

(857,621)

(690,162)

(184,382,749)

140,014,439

(0.61)

0.47

Profit before tax

Deferred Tax expense/(income)


Profit after tax
Earnings per share

Chief Executive Officer

Chartered Accountants

404

995,916
1,308,710

Director

Vice Chairperson

Dated: 25 February 2015


Dhaka

405

3,000,000,000

3,000,000,000

Director

Balance as at 31 December 2013

Chief Executive Officer

3,000,000,000

Paid up capital Taka

Balance as at 31 December 2014

Retained Profit for the year

Balance as at 01 January 2014

Particulars

for the year ended 31 December 2014

Statement of Changes in Equity

Prime Bank Investment Limited

28,002,888

28,002,888

28,002,888

General Reserve

198,499,857

14,117,108

(184,382,749)

198,499,857

Retained Earnings

Dated: 25 February 2015


Dhaka

Vice Chairperson

3,226,502,745

3,042,119,996

(184,382,749)

3,226,502,745

Total

Annual Report 2014

Prime Bank Investment Limited


Statement of Cash Flows

for the year ended 31 December 2014


Amount in Taka
2014

2013

Cash Flows from Operating Activities:


Cash generated from operations

(46,500,419)

414,413,028

Advance Income Tax

(630,000)

(11,000,000)

Payment for withholding taxes

(2,413,975)

(2,403,750)

Advance deposit

(200,000)

(117,588)

(13,370,988)

(136,261,037)

(63,115,382)

264,630,653

(261,300)

(472,560)

Sale of shares during the year

303,379,894

403,555,453

Purchase of shares during the year

(128,424,862)

(70,270)

198,243,148

214,625,214

372,936,880

617,637,837

(364,644,636)

(645,000,000)

(239,999,996)

(364,644,636)

(884,999,996)

(54,823,138)

(2,731,507)

87,686,951

90,418,458

32,863,813

87,686,951

Income tax paid


Net cash used operating activities
Cash Flows from Investing Activities:
Purchase of property, plant and equipment

Margin Loan recovered


Net cash from investing activities

Cash Flows from Financing Activities:


Proceeds/(Repayments) of loan facilities
Dividend paid
Net cash used in financing activities

Net Cash Inflow/(Outflow) for the Year


Opening cash and bank balances
Closing cash and bank balances

Chief Executive Officer

Director

Vice Chairperson

Dated: 25 February 2015


Dhaka

406

FINANCIAL STATEMENTS
(ANNEXURE-M)

PRIME BANK SECURITIES LIMITED

407

Annual Report 2014

Auditors Report To The Shareholders


Prime Bank Securities Limited

Introduction
We have audited the accompanying financial statements of Prime Bank Securities Limited, which comprise the
Statement of Financial Position as at December 31, 2014 and the Statement of Comprehensive Income, Statement of
Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the period then ended, and a
summary of significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules
1987 and other applicable laws and regulations and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with Bangladesh Standards on Auditing (BSAs). Those standards require that we comply with relevant
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risk of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the
auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank
Securities Limited as at December 31, 2014 and its financial performance and its cash flows for the period then ended
in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities and
Exchange Rules 1987.
We also report that:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared
from our examination of those books;
c) the Statement of Financial Position and the Statement of Comprehensive Income dealt with the report are in
agreement with the books of accounts and returns;
d) the expenditure incurred and payments made were for the purpose of the Companys business for the period;


Chartered Accountants

408

Dated: February 22, 2015


Dhaka

Prime Bank Securities Limited


Statement of Financial Position
as at 31 December 2014

Amount in Taka
31.12.2014

31.12.2013

ASSETS
Non-Current Assets

666,785,887

670,155,631

2,021,974

5,243,558

606,497

912,072

157,415

664,000,000

664,000,000

535,558,155

659,755,776

38,975,388

31,514,980

Investment in Securities

87,628,861

81,550,534

Accounts receivable

12,350,022

13,137,599

Property, plant and equipment


Intangible assets
Deferred tax
Investment in DSE and CSE Shares
Current Assets
Advances, deposits and prepayments

Cash and Bank balances

14,974,084

134,764,255

381,629,800

398,772,908

15,500

1,202,344,042

1,329,911,407

Shareholders Equity

767,484,333

799,055,787

Share capital

750,000,000

750,000,000

17,484,333

49,055,787

Non-current Liabilities

233,839

Deferred tax

233,839

434,859,709

530,621,780

Loan to Customers
Other assests
Total Assets
EQUITY AND LIABILITIES

Retained earnings

Current Liabilities
Security deposit

112,820

265,370

17,750,107

150,475,274

Loan from bank

371,066,787

338,010,202

Other Liabilities & Provisions

45,929,995

41,870,934

1,202,344,042

1,329,911,407

Accounts payable

Total Equity and Liabilities

Chief Executive Officer

Chartered Accountants

Director

Chairman

Dated: February 22, 2015


Dhaka

409

Annual Report 2014

Prime Bank Securities Limited

Statement of Comprehensive Income


for the year ended 31 December 2014

Amount in Taka
31.12.2014

31.12.2013

INCOME
Commission income

30,121,613

31,572,380

Interest income

11,667,012

67,578,007

386,861

2,868,559

2,257,010

1,430,440

Gain on sale of shares


Dividend income
Other income

971,313

569,922

45,403,809

104,019,308

EXPENDITURES
Operating Expenses

22,992,826

24,731,443

Financial Expenses

46,349,449

48,648,446

4,287,514

4,455,387

73,629,789

77,835,276

(28,225,980)

26,184,032

3,246,640

1,302,164

Direct Expenses
Profit before provision and tax
Less: Provisions
Provision for diminution in value of investment in shares

(428,503)

(51,962)

Provision for investment and clients' margin loan

3,675,143

1,354,126

(31,472,620)

24,881,868

98,834

8,922,800

Current Tax

490,088

9,337,871

Deferred Tax

(391,254)

(415,071)

(31,571,454)

15,959,069

(0.42)

0.21

Profit before tax


Less: Tax Expenses

Profit after tax


Earning per share

Chief Executive Officer

Chartered Accountants

410

Director

Chairman

Dated: February 22, 2015


Dhaka

411

Chief Executive Officer

Director

15,959,069
49,055,787

33,096,718

Retained earnings

Balance as at 31 December 2013

750,000,000

Taka

750,000,000

Paid up capital

Profit for the Year

Balance as at 01 January 2013

Particulars

for the year ended 31 December 2013

Statement of Changes in Equity

17,484,333

750,000,000

49,055,787

Retained earnings

Balance as at 31 December 2014

750,000,000

Taka
(31,571,454)

Paid up capital

Profit for the Year

Balance as at 01 January 2014

Particulars

for the year ended 31 December 2014

Statement of Changes in Equity

Prime Bank Securities Limited

799,055,787

15,959,069

783,096,718

767,484,333

(31,571,454)

799,055,787

Dated: February 22, 2015


Dhaka

Chairman

Total

Total

Annual Report 2014

Prime Bank Securities Limited


Statement of Cash Flows

for the year ended 31 December 2014


Amount in Taka
2014

2013

Cash flow from operating activities


Net profit during the year

(31,571,454)

15,959,069

2,633,263

2,607,827

Add: Amount considered as non-cash items


Depreciation & amortization charged
Write off of preliminary expenses
Dividend receipts

15,500

614,121

(1,782,450)

(969,400)

Provision for diminution in value of investment

(428,503)

(51,962)

Provision for negative equity under margin loan

3,675,143

1,354,126

4,112,953

3,554,712

Changes in working capital


(Increase)/decrease in advances, deposits and prepayments

(20,000)

82,500

(Increase)/decrease in advance income tax

(7,440,408)

(31,283,680)

(Increase)/decrease in investments in securities

(6,078,327)

(4,498,684)

787,577

(5,478,679)

(Increase)/decrease in loans to customers

17,143,108

5,256,792

(Increase)/decrease in deferred tax

(391,254)

(415,071)

Increase/(decrease) in current tax

490,088

9,337,871

Increase/(decrease) in provision for expenses

322,333

50,405

Increase/(decrease) in accounts payable

(132,877,717)

135,807,449

Increase/(decrease) in secured overdraft

33,056,585

(14,268,227)

(Increase)/decrease in accounts receivable

(Increase)/decrease in other assets


Net cash flows from operating activities

(15,500)

(95,008,016)

114,143,715

(122,466,517)

133,657,495

893,896

(53,380)

893,896

(53,380)

Cash flow from investing activities


Fixed assets acquisition
Net cash flows from investing activities
Cash flows from financing activities
Dividend receipts

1,782,450

969,400

1,782,450

969,400

Net cash increase / (decrease)

(119,790,171)

134,573,515

Cash and cash equivalents at the beginning of the year

134,764,255

190,740

14,974,084

134,764,255

Net cash from financing activities

Cash and cash equivalents at the end of the year


Cash in hand

25,000

7,011

Cash at Bank

14,949,084

134,757,244

14,974,084

134,764,255

Chief Executive Officer

Director

Chairman

Dated: February 22, 2015


Dhaka

412

FINANCIAL STATEMENTS
(ANNEXURE-N)

PRIME EXCHANGE CO. PTE. LTD.,


SINGAPORE

413

Annual Report 2014

Independent Auditors Report

to the Member of Prime Exchange Co. Pte. Ltd.


Report on the Financial Statements
We have audited the accompanying financial statements of Prime Exchange Co. Pte. Ltd. (the Company), which
comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the financial year then ended, and a summary of
significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance
with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting
Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions
are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and
loss account and balance sheet and to maintain accountability of assets.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entitys preparation of the financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and
Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company as at
31 December 2014 and of the results, changes in equity and cash flows of the Company for the financial year ended
on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly
kept in accordance with the provisions of the Act

C. C. YANG & CO.


PUBLIC ACCOUNTANTS AND
CHARTERED ACCOUNTANTS
SINGAPORE
11 February 2015

414

Prime Exchange Co. Pte. Ltd.

Statement of Comprehensive Income


for the year ended 31 December 2014

(Expressed in Singapore Dollars)


2014

2013

Revenue
Commission Income

628,295

627,720

16,302

16,251

575,663

276,247

(359,890)

(341,600)

(52,711)

(59,440)

(538,221)

(419,383)

Profit Before Tax from Continuing Operations

269,438

99,795

Income Tax Expense

( 14,088)

(5,440)

Profit from Continuing Operations, Net of Tax

255,350

94,355

$ 255,350

$ 94,355

Other Items of Income


Other Income
Foreign Currency Gains
Other Items of Expense
Employee Benefits Expense
Depreciation
Other Expenses

Other Comprehensive Income


Other Comprehensive Income, Net of Tax
Total Comprehensive Income

415

Annual Report 2014

Prime Exchange Co. Pte. Ltd.


Statement of Financial Position
as at 31 December 2014

(Expressed in Singapore Dollars)


2014

2013

ASSETS
Non-Current Assets
Property, Plant and Equipment

61,974

100,324

Total Non-Current Assets

61,974

100,324

69,990

69,990

11,528

8,050

Cash and Bank Balances

1,144,279

874,745

Total Current Assets

1,225,797

952,785

$ 1,287,771

$ 1,053,109

250,000

250,000

583,017

422,022

833,017

672,022

Deferred Tax Liabilities

6,429

9,728

Total Non-Current Liabilities

6,429

9,728

431,277

367,066

17,048

4,293

Total Current Liabilities

448,325

371,359

Total Liabilities

454,754

381,087

$ 1,287,771

$ 1,053,109

Current Assets
Other Receivables
Prepayments

Total Assets
EQUITY AND LIABILITIES
Equity
Share Capital
Retained Earnings
Total Equity
Non-Current Liabilities

Current Liabilities
Trade and Other Payables
Tax Payable

Total Equity and Liabilities

416

Prime Exchange Co. Pte. Ltd.


Statement of Changes in Equity
for the year ended 31 December 2014

(Expressed in Singapore Dollars)

Balance at 1.1.2014

Total

Share
Capital

Retained
Earnings

672,022

250,000

422,022

Distributions to Owner
Dividends

(94,355)

(94,355)

Total Distributions to Owner

(94,355)

(94,355)

255,350

255,350

Total Comprehensive
Income for the Year - 2014

$ 833,017

$ 250,000

$ 583,017

719,778

250,000

469,778

Dividends

(142,111)

(142,111)

Total Distributions to Owner

(142,111)

(142,111)

Total Comprehensive Income for the Year - 2013

94,355

94,355

$ 672,022

$ 250,000

$ 422,022

Balance at 31.12.2014
Balance at 1.1.2013
Distributions to Owner

Balance at 31.12.2013

417

Annual Report 2014

Prime Exchange Co. (Pte.) Ltd.


Statement of Cash Flows

for the year ended 31 December 2014


(Expressed in Singapore Dollars)
2014

2013

Cash Flows From Operating Activities


Profit Before Income Tax

269,438

99,795

Total Adjustments

52,711

59,440

Depreciation

52,711

59,440

322,149

159,235

(232)

Prepayments

(3,478)

(735)

Increase in Trade and Other Payables

64,211

210,754

382,882

369,022

(4,632)

(7,500)

378,250

361,522

(14,361)

(81,660)

13,676

(14,361)

(67,984)

(94,355)

(142,111)

(94,355)

(142,111)

Net Increase in Cash and Cash Equivalents

269,534

151,427

Cash and Cash Equivalents at Beginning of Year

874,745

723,318

$ 1,144,279

$ 874,745

Operating Profit Before Working Capital Changes


Increase in Other Receivables

Cash Flows Generated From Operations


Income Tax Paid
Net Cash Flows From Operating Activities
Cash Flows From Investing Activities
Purchase of Property, Plant and Equipment
Decrease in Amount Due From Holding Company
Net Cash Flows Used In Investing Activities
Cash Flows From Financing Activities
Dividends Paid on Ordinary Shares
Net Cash Flows Used In Financing Activities

Cash and Cash Equivalents at End of Year

418

FINANCIAL STATEMENTS
(ANNEXURE-O)

PBL EXCHANGE (UK) LTD.

419

Annual Report 2014

PBL Exchange (UK) Limited

Independent Auditors Report


to the Members of PBL Exchange (UK) Limited
We have audited the financial statements of PBL EXCHANGE (UK) LIMITED for the year ended 31 December 2014 set out
on pages 5 to 11. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the companys members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the companys members those matters we are required
to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the companys members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the
financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Boards Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes
an assessment of: whether the accounting policies are appropriate to the companys circumstances and have been
consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors;
and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion the financial statements:
give a true and fair view of the state of the companys affairs as at 31 December 2014 and of its loss for the year then
ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors Report for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements and the directors report in accordance with
the small companies regime.

Mrs. Seema Siddiqui (Senior Statutory Auditor)


for and on behalf of Reddy Siddiqui & Kabani

Chartered Accountants
Statutory Auditor

15 February 2015
Park View
183-189 The Vale Acton
London
W3 7RW

420

PBL Exchange (UK) Limited


Profit and Loss Account

for the year ended 31 December 2014

Turnover
Administrative expenses
Operating loss

Period ended
31 December
2014

Year ended
31 December
2013

358,535

330,858

(373,832)

(364,551)

(15,297)

(33,693)

(6)

(4)

(15,303)

(33,697)

(15,303)

(33,697)

Interest payable and similar charges


Loss on ordinary activities before taxation
Tax on loss on ordinary activities
Loss for the year

The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.

421

Annual Report 2014

PBL Exchange (UK) Limited


Balance Sheet

as at 31 December 2014
2014

2013

Fixed assets
Tangible assets

120,721

132,303

Current assets
Cash at bank and in hand
Creditors: amounts falling due within one year

223,333

283,684

(245,807)

(302,435)

Net current liabilities

(22,474)

(18,751)

98,247

113,552

Called up share capital

500,000

500,000

Profit and loss account

(401,753)

(386,448)

98,247

113,552

Total assets less current liabilities


Capital and reserves

Shareholders' funds

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small
companies regime within Part 15 of the Companies Act 2006.
Approved by the Board and authorised for issue on 15 February 2015

Prof. Ainun Nishat


Director

422

Md Shirajul Islam Mollah


Director

PBL Exchange (UK) Limited


Cash Flow Statement

for the year ended 31 December 2014


Period ended
31 December
2014

Year ended
31 December
2013

Net cash inflow/(outflow) from operating activities

50,102

(255,807)

Returns on investments and servicing of finance


Interest paid

(6)

Net cash outflow for returns on investments and servicing


of finance

(4)
(6)

(4)

Capital expenditure
Payments to acquire tangible assets
Net cash outflow for capital expenditure

(1,731)

(1,731)

Net cash inflow/(outflow) before management of liquid


resources and financing

48,365

(255,811)

Increase/(decrease) in cash in the year

48,365

(255,811)

423

Annual Report 2014

424

FINANCIAL STATEMENTS
(ANNEXURE-P)

PBL FINANCE (HONG KONG) LTD.

425

Annual Report 2014

Independent Auditors Report


to the Shareholders of PBL Finance (Hong Kong) Limited
(Incorporated in Hong Kong with limited liability)
We have audited the financial statements of PBL Finance (Hong Kong) Limited (the Company ) set out on pages 5
to 16, which comprise the statement of financial position as at 31st December, 2014, and statement of income and
retained earnings and statement of cash flows for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Directors Responsibility for the Financial Statements
The directors are responsible for the preparation of financial statements that give a true and fair view in accordance
with the Hong Kong Financial Reporting Standard for Private Entities issued by the Hong Kong Institute of Certified
Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. Our report is made solely
to you, as a body, in accordance with Section 80 of Schedule 11 to the new Hong Kong Companies Ordinance (Cap.
622), and for no other purpose. We do not assume responsibility toward or accept liability to any other person for the
contents of this report.
We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute
of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity s preparation of financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the state of the Companys affairs as at 31st
December, 2014, and of its profit and cash flows for the year then ended in accordance with the Hong Kong Financial
Reporting Standard for Private Entities and have been properly prepared in accordance with the Hong Kong
Companies Ordinance.

T. 0. Yip & Co. Limited


Certified Public Accountants (Practising) Hong Kong
Yip Tak On, George
Practising Certificate Number : P00301
Date : 07 February 2015

426

PBL Finance (Hong Kong) Limited

Statement of Income and Retained Earnings


for the year ended 31st December, 2014

Interest income
Interest expenses

2014

2013

HK$

HK$

8,412,464

8,012,647

(2,562,328)

(2,879,048)

Net interest income

5,850,136

5,133,599

Other operating income

5,425,926

4,457,709

Total operating income

11,276,062

9,591,308

Staff costs

(2,974,550)

(2,304,613)

(197,210)

(104,396)

Other operating expenses

Depreciation

(1,525,677)

(1,158,499)

Total operating expenses

(4,697,437)

(3,567,508)

Profit before taxation

6,578,625

6,023,800

Income tax expense

(1,083,089)

(986,273)

Profit for the year

5,495,536

5,037,527

5,037,527

4,635,624

Dividends

(5,037,527)

(4,635,624)

Retained earnings at end of year

5,495,536

5,037,527

Retained earnings at start of year

427

Annual Report 2014

PBL Finance (Hong Kong) Limited


Statement of Financial Position
as at 31st December, 2014

2014

2013

HK$

HK$

Non-current assets
Property, plant and equipment

227,628

286,175

229,651,539

241,716,631

Deposits, prepayments and other receivables

347,966

323,572

Cash and bank balances

849.546

1,504,980

230,849,051

243,545,183

2,699,327

2,012,001

219,297,000

233,118,600

84.816

163.230

222,081,143

235,293,831

8,767,908

8,251,352

8,995,536

8,537,527

3,500,000

3,500,000

5,495,536

5,037,527

8,995,536

8,537,527

Current assets
Discounted bills receivable

Current liabilities
Accrued liabilities and other payables
Amount due to ultimate holding company
Income tax payable

Net current assets

Equity
Share capital
Retained earnings

The financial statements were approved and authorised for issue by The Board of Directors on 07 February 2015

Director

428

Director

PBL Finance (Hong Kong) Limited


Notes to Statement of Cash Flows
for the year ended 31st December, 2014

2014

2013

HK$

HK$

Operating activities
Profit before taxation

6,578,625

6,023,800

4,012

197,210

104,396

Operating profit before changes in working capital

6,775,835

6,132,208

Decrease/(Increase) in discounted bills receivable

12,065,092

(123,474,085)

Increase in deposits, prepayments and other receivables

(24,394)

(154,737)

Increase in accrued liabilities and other payables

687,326

989,049

(13,821,600)

122,928,000

Net cash generated from operation

5,682,259

6,420,435

Tax paid

(1,161,503)

(1,728,124)

Net cash generated from operating activities

4,520,756

4,692,311

Purchase of property, plant and equipment

(138,663)

(300,963)

Net cash used in investing activities

(138,663)

(300,963)

568,000

Dividend paid to equity shareholders of the Company

(5,037,527)

(4,635,624)

Cash used in from financing activities

(5,037,527)

(4,067,624)

Net (decrease)/increase in cash and cash equivalents

(655,434)

323,724

Cash and cash equivalents at start of year

1,504,980

1,181,256

849,546

1,504,980

849,546

1,504,980

Adjustments for :
Property, plant and equipment written off
Depreciation

(Decrease)/Increase in amount due to ultimate holding company

Investing activities

Financing activities

Issue of shares

Cash and cash equivalents at end of year


Analysis of cash and cash equivalents
Cash and bank balances

429

Annual Report 2014

Some PBL Activities


During 2014

430

Annual Managers Conference

Agreement signing with IFC for $ 70 Million Short Term


Finance

Launching of Low Interest Loans under the Refinancing


Scheme

Signing of Agreement with FMO

Signing of MoU with Bangkok Hospital

Launching of Anchol an Women Entrepreneurs Loan


Product under SME Loans

Appointment of Mr. Fahad, youngest FIDE Master as PBL


Brand Ambassador

Winners of Prime Bank Art Competition

19th Anniversary Celebration

Distribution of Winter Clothing

Prime Banks Medical Camp at Biswa Ijtema Premises

Inauguration of Prime Bank Cup Golf Tournament

Closing ceremony of the 73rd Foundation Training Course


for the MTs

Agreement signing with NOVOAIR

Signing of MoU with Hotel Agrabad

Prime Bank officials paying homage to war heroes on


Victory day.

431

Annual Report 2014

Gallery of some
Significant Events in 2014

432

Prime Bank Gets ICMAB Best Bank Award in the Private


Commercial Bank (Traditional Operation) Category

Opening of Heyako Bazar Branch, Fatikchhari

Prime Bank Receives Remittance Award

Opening of Magura Branch

Opening of Patuatuli Branch, Dhaka.

Opening of Sherpur Branch

Branch
Network
Bashabo Branch
Shapnil (2nd & 3rd Floor), 60-61
South Bashabo, Dhaka
Adamjee EPZ Branch
Phone: (02) 7219201, Direct: (02)
AdamjeeEPZ, Holding # 4
7219206
Siddirganj, Narayanganj
Fax: (02) 7219205
Phone: (02) 7692025-26, 7692024

Fax: (02) 7692027
Bashundhara Branch
Swift: PRBLBDDHAEZ
BaitulAman Tower (1st Floor),

Boshundhara Project, Block-B, Plot#
Asad Gate Branch
236, P.S-Cantonment, Dhaka
Family World Tower,
Phone: PABX: (02) 8845214, 8845213,
2/6, Sir Sayed Road, Ward # 42,
Mohammadpur (Mirpur Road), Dhaka Direct: (02) 8845215
Fax: (02) 8845214
Phone: (02) 9125400, 8142106,

8142134, Fax: (02) 9122640
Bhairab Branch

181, Tin Potty Road, BhairabPawAshulia Branch
rashava, Bhairab, Kishoregonj
Sherif Mansion (1st floor), Diakhali,
Jamgora Bazar, Ashulia, Savar, Dhaka Phone: PABX: 02-9470723, 9470771
Fax: 02-9471755
Phone: (02) 7788290, 7788326,

7788325,
Bijoy Nagar Branch
Fax: (02) 7788291
Akram Tower (1st floor), 15/5, Bijoy
Nagar (SayedNazrul Islam Saroni),
Banani Branch
House # 62, Block # E, Kemal Ataturk Dhaka-1000
Phone: (02) 9335762, 9335732,
Avenue, Banani, Dhaka-1213
9334123
Phone: (02) 8815754, 9889868
Fax: 02-9332639
Fax: 02-8853616

Swift: PRBLBDDH020
Boalmari Branch
Azahar Tower, Holding 503, Station
Banasree Branch
Arcadia (Ground Floor and 1st Floor), Road, Ward # 03, Boalmari, Faridpur
Phone: 06324-56132, 06324-56130
Plot No.-14, Block No.-C, Main Road,
Fax: 06324-56139
Banasree, Dhaka.

Phone: (02) 8399548, 8399591
Damudya Branch
Fax: (02) 8399547
Holding # 264 (1st & 2nd floor), Ward
# 8, Sonali Bank Road, Damudya,
Bangshal Branch
Shariatpur
43/44 Malitola, North South Road,
Phone: (06023) 56396
Bangshal, Dhaka-1100
Fax: (06023) 56390
Phone: (02) 9561501, 7123480,

7113310,
Dhanmondi Branch
Fax: 7175185
Momtaz Plaza (1st floor), House No
Swift: PRBLBDDH026
# 7, Road No # 4, Dhanmondi R/A,
Dhaka
Baridhara Branch
Phone: (02) 8622304, 9662704
Concord I-K Tower (1st Floor)
Fax: (02) 9662705
Plot# 02, Block# CEN(A) North
Avenue, Gulshan-2 Dhaka-1212
Phone: (02) 9850376, (02) 9850392, Elephant Road Branch
Ananta Plaza, 136, Elephant Road,
01730781181 (HOB)
Dhaka-1205
Fax: (02) 9850384

Dhaka Division

Phone: (02) 9662776-7, 9673783


Fax: 88-02-8622591
Swift: PRBLBDDH011
Faridpur Branch
KMA Arcadia (1st floor),
Holding # 60/116(A), Moirapotty,
Faridpur
Phone: (0631) 65133
Fax: (0631) 65128
Foreign Exchange Branch
Al-Haj Mansion, 82, Motijheel C/A,
Dhaka -1000, Phone: (02) 9551682,
Direct: (02) 7161146
Fax: 88-02-9553078
Swift: PRBLBDDH019
Ganakbari Branch
Somsher Plaza (1st Floor), Balibhadra
Bazar Bus Stand, Dhamsona, Ganakbari, Savar, Dhaka-1340
Phone: (02) 7789379, 7788100
Fax: 02-7789378
Swift: PRBLBDDH014
Gareb-E-Newaz Avenue Branch
Gareb-E-Newaz Branch Holding # 1,
Gareb-E-Newaz Avenue Sector # 11,
Uttara R/A, Dhaka
Phone: (02) 8950997, 8991781
Fax: (02) 8931687
Gulshan Branch
Plot # 01, Block # CEN (H), Road #
109, Gulshan Avenue, Dhaka-1212
Phone: (02) 9886171, 8815885
Fax: 02-9884977
Swift: PRBLBDDH016
Hemayetpur Branch
MadhuBhaban, Singair Road,
Hemayetpur, Savar, Dhaka.
Phone: (02) 7742096, 01730781154
(HOB), Fax: (02) 7742096

IBB Dilkusha Branch
19, Dilkusha C/A, Dhaka -1000.
Phone: (02) 9587494, 9577582,
9576414
Fax: 02-9567228
Swift: PRBLBDDH005

433

Annual Report 2014


IBB Mirpur Branch
Mamoni Tower,
1244, East Monipur, Begum Rokeya
Sarani, Mirpur, Dhaka-1216
Phone: (02) 8057681-2, 8058371
Fax: 88-02-8075441

Ibrahimpur Branch
SumonaSahadat Center,
80, Ibrahimpur, Kafrul, Dhaka-1206
Phone: Direct: 02-8872557,
PABX: 02-8872503, 8872423
Fax: 02-8872501

Jamalpur Branch
Jibon Mansion,
Station Road, Jamalpur.
Phone: (0981) 65360, (0981) 65 361
Fax: (0981) 65362

Jatrabari Branch
Nur Tower, 76/Ga, BibirBagicha,
North Jatrabari, Dhaka-1204
Phone: (02) 7552158, (02) 7552178
Fax: (02) 7552169

JoydevpurChowrasta Branch
Shapla Mansion (1st Floor), JoydevpurChowrasta, Chandana Dhaka-Tangail Road, Gazipur
Phone: (02) 9264135, 9264103
Fax: 88-02-9264097

Joypara Branch
Azahar Ali Mozahar Ali Shopping
Complex (1st floor) Joypara,
LotakholaDohar, Dhaka.
Phone: 02-7768055, 02-7768053,
02-7768054
Fax: 02-7768052

Kawran Bazar Branch
54, Kawran Bazar C/A, Dhaka-1215
Phone: (02) 8157288, 9124296-7
Fax: 88-02-9129004
Swift: PRBLBDDH010

Kishoregonj Branch
ShamsuddinBhuiyan Plaza,
Teripotty, Kishoregonj
Phone: (0941) 62590,
Direct: (0941) 62592
Fax: (0941) 62591

Madhabdi Branch
Plot # 17, Madhabdi Bazar,
Narsingdi-1604
Phone: (06251) 56682
Fax: 88-06257-56683

434

Mirpur-1 Branch
Rabiul Plaza (1st Floor), Plot # Shee-1/
Kha, Section -1, Mirpur, Dhaka-1216
Phone: (02) 8034126, 8034590
Fax: (02) 8034591

Mirzapur Branch
Rashid BiponiBhaban,
706, College Road, Mirzapur, Tangail.
Phone: (09229) 56591, Direct:
(09229) 56592
Fax: (09229) 56593

Modhukhali Branch
Modhuban Shopping Mall (1st Floor)
Modhukhali, Faridpur
Phone: 0632656017 (Direct),
0632656018 (PABX)
Fax: 0632656019

Mohakhali Branch
69, Mohakhali C/A, Dhaka-1212
Phone: (02) 9850302, 9882291
Fax: 88-02-9886052
Swift: PRBLBDDH007

Motijheel Branch
Adamjee Court Annex Building -2,
119-120, Motijheel C/A, Dhaka-1000
Phone: (02) 7175491-2, 9567225,
9562982
Fax: 88-02-9567223
Swift: PRBLBDDH001

Mouchak Branch
Manhattan Tower (1st Floor),
83, Siddheswari Circular Road,
Malibagh, Dhaka-1217
Phone: (02)8352831, 9347757
Fax: 88-02-9338883
Swift: PRBLBDDH013

Moulvi Bazar Branch
77/4, Moulvi Bazar, Dhaka-1100
Phone: (02) 7313407, 7311017
Fax: 88-02-7318305
Swift: PRBLBDDH003

Mymensingh Branch
10, Swadeshi Bazar, Mymensingh
Phone: PABX: (091) 52390,
Direct: (091) 52391
Fax: (091) 52391

Narayanganj Branch
Modern Model Complex, 56, S.M.
Maleh Road, Narayanganj-1400
Phone: (02) 764689, 7630150
Fax: 02-7630140
Swift: PRBLBDDH012

New Eskaton Branch


133, New Eskaton Road,
Dhaka - 1000
Phone: (02) 9354044, 9354738,
9359683
Fax: 88-02-9354826

Pallabi Branch
SetarasDream (1st Floor), Holding
No: 1/11 & 1/12, Pallabi, Mirpur, Dhaka
Phone: PABX: (02) 9000559,
9001913, Direct: (02) 9013629
Fax: (02) 9001813

Panthapath Branch
Firoz Tower, 152/3-B, Green Road,
Panthapath, Dhaka-1205
Phone: (02) 9142879, 8128100,
8152852
Fax: 02-9137887

Patuatuly Branch
Bishal Hafiz Market, Holding # 10
(1st & 2nd Floor) Wise Ghat Road,
Patuatuly, Dhaka-1100
Phone: (02) 7343474, 01766675393,
01766675384

PragatiSarani Branch
Facilities Tower, Kha-199/2,
MaddhyaBadda, Dhaka
Phone: (02) 9840689, 8816938,
9840685
Fax: 02-8837531

Ring Road Branch
BaitulAman Tower (1st Floor), Holding
No: 840-841, Uttar Adabor, Dhaka
Phone: PABX: (02) 8158866,
Direct: (02) 9129093
Fax: (02) 8117010

Satmasjid Road Branch
House # 99, Road # 11/A,
Dhanmondi R/A, Dhaka-1209
Phone: (02) 9122374, 8124258,
8153556
Fax: (02) 8121652
Swift: PRBLBDDH023

Savar Branch
KK Plaza (1st floor),
Holding # A-91, Word # 5,
Savar Bazar Road, Savar, Dhaka
Phone: (02) 7744862, Direct: (02)
7744861
Fax: (02) 7744863

SBC Tower Branch


SadharanBima Tower (Ground Floor)
37/A, Dilkusha C/A, Dhaka
Phone: (02) 9561221, 9559943
Fax: 88-02-9564189
Swift: PRBLBDDH024

Serajdikhan Branch
Haji Mostafa Plaza (1st floor),
Dag # 284, Bazar Road,
Serajdikhan, Munshigonj.
Phone: 02-7628320, 7628330
Fax: 02-7744863

Shibpur Branch
Khan Tower (Ist Floor),
Shibpur Bazar, Narsingdi
Phone: 06256-75130, 06256-75131
Fax: 06256-75134

Shimrail Branch
Hazi A Rahman Super Market &
Shopping Tower (1st Floor),
Holding # 96, ShimrailMorr, Chittagong Road Chowrastha, Shanarpar, Siddirgonj, Narayangonj
Phone: (02) 7691670, 7692912
Fax: (02) 7691671

Sreenagar Branch
Rahman Complex
Sreenagar Bazar Munshigonj
Phone: 01730781191 (HOB)

Tangail Branch
Holding No: 414-417,
Main Road, Tangail
Phone: PABX: (0921) 61248, 61271,
Direct: (0921) 61330
Fax: (0921) 61322

Tejgaon Branch
Shanta Western Tower,
Level-02, 186, BirUttam Mir
ShawkatSarak, Dhaka-1208
Phone: 02-8879157-8, 02-8879160
Fax: 02-8879156

Tongi Branch
SenaKalyan Commercial Complex
(1st Floor), Plot # 9, Block #F,
Tongi, Gazipur
Phone: (02) 9813811, 9813874
Fax: (02) 9813835

Uttara Branch
Siaam Tower (1st Floor), Plot # 15,
Sector # 03, Dhaka Mymensingh
Road, Uttara Model Town, Dhaka
Phone: (02) 8916233, 8950341-2,

Direct: (02) 8950016


Fax: (02) 8924248
Swift: PRBLBDDH021

Wari Branch
Tanin Roseate (1st floor),
43 Ranking Street, Wari, Dhaka.
Phone: (02) 9512085, 7118311, 7118169
Fax: (02)9512084

Chittagong Division
Agrabad Branch
B.M Height (1st Floor)
318, Sheikh Mujib Road
Agrabad, Badamtoli Chittagong.
Phone: (031) 716724-5, 7207018
Fax: 88-031-718971
Swift: PRBLBDDH015

Ashugonj Branch
SeriyaSayed Tower,
Post office Road, Ashugonj Bazar,
Ashugonj, Brahmanbaria
Phone: 08528-74596, 74595
Fax: (08528)74594

Banshkhali Branch
G.S. Plaza (1st floor), ChittagongBanshkhali Highway, BanshkhaliPawrashava, Banshkhali, Chittagong
Phone: (0303) 756222
Fax: (0303) 756223

Bhatiary Branch
Khalek Tower (1st & 2nd Floor)
Bhatiary (Uttar Bazar),
Sitakunda, Chittagong.
Phone: 031-2781261, 2781263
Fax: 031-2781262

Brahmanbaria Branch
1st Floor, K. Das Bhaban
K. Das Square, Brahmanbaria
Phone: 0851-61698, 0851-61699
Fax: 0851-58849

Chauddagram Branch
Abdul Goni Shopping Complex
(1st floor), Chowddgram Bazar,
Comilla
Phone: (08020) 56364
Fax: (08020) 56362

Chaumuhani Branch
Holding # 180-182 (1st floor), Feni
Road, Chowmuhani, Begumganj,
Noakhali.
Phone: (0321) 54096
Fax: (0321) 56096

Comilla Branch
Holding No: 10/8, Ward#12, Chatpatty
(Gangagonj), Kotowali, Comilla
Phone: (081) 72611, 72612, 72610
Fax: (081) 72646

Coxs Bazar Branch
Hajera Shopping Center,
Holding # 256, Main Road,
Coxs Bazar
Phone: (0341) 51085
Fax: (0341) 51084

Dagonbhuiyan Branch
R.B Plaza, 391 FazilerGhat,
Dagonbhuiyan, Feni
Phone: (03323) 79248, 79249
Fax: (03323) 79250

Fatickchari Branch
Haji Hossain Plaza (1st Floor),
College Road, Bibirhat, Dhurang
Union, Fatickchari, Chittagong
Phone: (03022) 56006
Fax: (03022) 56006

Feni Branch
Kazi Center, Holding No: 106,
S.S.K. Road, Feni
Phone: (0331) 63091, 63093, 63092
Fax: (0331) 63092

Hajigonj Branch
Ananda Complex, Holding # 191,
Hajiganj Bazar, Hajiganj,Chandpur
Phone: (08424) 75110, 75111
Fax: (08424) 75111

Halishahar Branch
Nandita House (1st & 2nd Floor),
Plot No. # 5/A, Lane # 2, Road # 2,
Block # G, Halishahar Housing Estate,
Double Mooring, Chittagong
Phone: (031) 2512039, 2512064
Fax: (031) 2512054

Hathazari Branch
N. Zahur Shopping Center (1st Floor)
Kachari Road, Hathazari, Chittagong
Phone: (031) 2601524, 2601525
Fax: 88-031-2601526

IBB O. R. Nizam Road Branch
O.R. Nizam Road, Hazrat Garibullah
City Corporation Bhaban (Ist Floor),
739/804 CDA Avenue, Bagmoniram,
Chittagong
Phone: (031) 639855, 2861437
Fax: 031-2861434
Swift: PRBLBDDH027

435

Annual Report 2014


IBB Pahartali Branch
B S Plaza, Plot # 305/1390,
Abdul Ali Hat, Sorai Para,
AlankerMorr, Pahartali, Chittagong
Phone: (031) 753143, 2771752
Fax: (031) 753144

Jubilee Road Branch
Pedrollo Plaza, 5, Jubilee Road,
Chittagong -4000
Phone: (031) 613939, 2850319
Fax: 031-618689
Swift: PRBLBDDH017

Karnaphuli EPZ Branch
Karnaphuli Export Processing Zone,
North Patenga, Chittagong
Phone: (031) 2502382, 2502381
Fax: (031) 2502383

Keranihat Branch
HaziUlamia Market Keranihat,
Satkania, Chittagong
Phone: 03036-56134, 03036-56133
Fax: 03036-56135

Khatungonj Branch
142, Chand Mia Lane,
Khatungonj, Chittagong-4000
Phone: (031) 623213-14, 627297
Fax: 031-610848
Swift: PRBLBDDH002

Laldighi East Branch
8, Laldighi East, Chittagong
Phone: (031) 2850771, 2850773
Fax: (031) 2850772
Swift: PRBLBDDH025

Muradpur Branch
Shah Alam Plaza, 129,
CDA Avenue, Muradpur, Chittagong
Phone: 031-2557826, 2557824
Fax: 031-2557825

Oxygen More Branch
405 Sekander Center,
Chittagong Cantonment,
Oxygen More, Chittagong
Phone: (031) 2583181, 2583180
Fax: (031) 2583180

Prabartak More Branch
12/12 O.R. Nizam Road, Prabartak
More, Panchlish, Chittagong
Phone: (031) 2553593, 2553591-2
Fax: (031) 2553594

436

Raojan Branch
Fazal Tower (1st Floor), Raojan Bus
Stand, MaderMohal, Chittagong
Phone: (03026) 56214, 56168
Fax: (03026) 56215
RajshahiDivision
Baneswar Branch
Baneswar Bazar, Puthia, Rajshahi
Phone: 01755534922

Bogra Branch
331/364, Rangpur Road,
Borogola, Bogra-5800
Phone: (051) 78203, 67172
Fax: 051-61142
Swift: PRBLBDDH022

ChapaiNawabganj Branch
Holding No.29 ( First Floor),
Islampur, Daudpur Road, Bara
Indira Moor, ChapaiNawabganj
Phone: (0781) 51125, 51126
Fax: (0781) 51127

Ishwardi Branch
Holding # 1335/982, (1st Floor)
Station Road, IshwardiPawrashava,
Word # 7, Ishwardi, Pabna
Phone: (07326) 64435, 64650
Fax: 07326-64436

Joypurhat Branch
Tahera Complex,
306 Main Road, Joypurhat
Phone: (0571) 51156, 51157
Fax: (0571) 51158

Mohadebpur Branch
CharmathaBoker More,
Bridge Road, Mohadebpur, Naogaon.
Phone: (07426) 75041, 75088
Fax: 07426-75044

Naogaon Branch
JagannathBhaban (2nd & 3rd Floor)
Ward # 4, Holding # 320, Main Road
Bridge-er-More, Naogaon
Phone: (0741) 62150, 62151
Fax: 0741-62152

Natore Branch
Holding # 1052 (1st floor),
Dhaka-Rajshahi Highway, Natore
Phone: (0771) 67001
Fax: (0771) 67002

Pabna Branch
423/1, Sonapotti Road, Pabna
Phone: (0731) 66426, 66425
Fax: (0731) 66399

Rajshahi Branch
138/144, Shaheb Bazar,
Rajshahi-6100
Phone: (0721) 773981, 774582, 771874
Fax: 0721-773980
Swift: PRBLBDDH009

Sherpur Branch
Azhar Complex (1st Floor)
Sherpur Bus Stand, Sherpur, Bogra
Phone: 05029-77228;
PABX: 05029-77229
Fax: 05029-77225

Sylhet Division
Barolekha Branch
Hazi Abdul Ali Trade Center,
842, Barolekha, Moulvibazar
Phone: PABX: (08622) 56519,
Direct: (08622) 56520
Fax: (08622) 56522

Beanibazar Branch
Zaman Plaza (1st Floor),
Beanibazar, Sylhet
Phone: (08223) 56139, 56140
Fax: (08223) 56141

Biswanath Branch
Al-Burak Shopping Center (1st Floor),
Biswanath Bazar, Biswanath, Sylhet
Phone: (08244)56017
Fax: (08224) 56004

Court Road Branch
Court Road, Moulvi Bazar -3200
Phone: (0861) 53877, 53878
Fax: 0861-53878
Swift: PRBLBDDH014

Dhaka Dakshin Branch
Bakul Mansion (1st floor),
College Road, Golapganj, Sylhet
Phone: (08227) 56180, (08227) 56187
Fax: (08227) 56308

Fenchugonj Branch
Akul Shah Shopping City (1st Floor),
Thana Road Point, Fenchugonj Bazar,
Fenchugonj, Sylhet
Phone: 08226-56414 (Direct),
08226-56415 (PABX)
Fax: 08226-56416

Habigonj Branch
Holding # 3794 (1st floor), Commercial Area, Habiganj, Habiganj
Phone: (0831) 62814, 62813
Fax: (0831) 62815

IBB Amberkhana Branch


Nabiba Complex, Amberkhana
Airport Road, Sylhet-3100
Phone: (0821) 717332, 728944
Fax: (0821)-717337

Islampur Branch
Century Park. Plot # 1052,
Islampur, Sylhet.
Phone: (0821)761174, 761157
Fax: 0821-761115

Kadamtali Branch
Motin Complex,
Fenchuganj, South Surma
(beside Shahzalal Market), Sylhet
Phone: (0821)728910, 841319
Fax: 0821-728630

Kulaura Branch
232, Marina Square, Dakkhin Bazar,
Kulaura, Moulvibazar.
Phone: (08624)57081, 57082
Fax: 08624-57080

Nabigonj Branch
AnwaraBipan (1st Floor)
Holding # 322, Osmani Road,
Nabigonj, Habigonj
Phone: (08328) 56025, 56029
Fax: (08328) 56015

Sreemangal Branch
Saptadinga Complex (1st Floor)
Ward # 9, Holding No # 145 Moulvibazar Road, Sreemangal, Moulvibazar
Phone: (08626) 71181, 71183
Fax: 08626-71182

Subid Bazar Branch
Corner View (1st floor, west side),
Plot No: 488(SA),2155(RS), Sylhet
Phone: (0821) 727688, 727629
Fax: (0821) 2830942

Sunamganj Branch
Subakth Raja Complex, 414 Old
Station Road, Sunamganj
Phone: (0871) 62516, 62515
Fax: (0871) 62514

Sylhet Branch
Laldighirpar, Sylhet-3100
Phone: (0821) 721127, 710208
Fax: 0821-710673
Swift: PRBLBDDH006

Tajpur Branch
Maya View Super Market (1st Floor),
Tajpur, Osmaninagar,
Balaganj, Sylhet
Phone: (08242) 56211, 56210
Fax: (08242) 56212

Upashahar Branch
Alif Center (1st Floor - Front Portion),
Subhanighat, Upashahar, Sylhet
Phone: (0821) 811366, 723524
Fax: (0821) 710094

KhulnaDivision
Daulatpur Branch
Akankha Tower 454, Khan-A-Sabur
Road, Daulatpur, Khulna
Phone: 041-2850877, 2850876
Fax: 041-2850875

Jessore Branch
47, NetajiSubhas Chandra Road,
Jessore town, Jessore-7400
Phone: (0421) 68815, 68814
Fax: 0421-68816
Swift: PRBLBDDH018

Khulna Branch
7, Old Jessore Road, Khulna -9100
Phone: (041) 720071, 725100
Fax: 041-731195
Swift: PRBLBDDH004

Kushtia Branch
Bangabandhu Super Market 2,
N S Road, Kushtia
Phone: (071) 72431, 72432
Fax: (071) 72430
Magura Branch
219, Monowara Complex (1st Floor)
Syed Ator Ali Road,Magura
Phone: 0488-51105 (Direct),
0488-51055 (PABX)
Fax: 0488-51200

Barisal - 8200
Phone: (0431) 64011, 64012
Fax: 0431-63712
Swift: PRBLBDDH008

Rangpur Division
Dinajpur Branch
Mazeda Plaza ( 1st Floor), 518/473
Ganashtala, Jail Road, Dinajpur
Phone: (0531) 51289, 51291
Fax: (0531) 51296

Rangpur Branch
Shah-Amanat Super Market
(1st Floor), 268 Station Road,
JahajCompanier More, Rangpur.
Phone: (0521) 64119, 64120
Fax: (0521) 64118

SME Branches
Aganagar SME Branch
Golden Plaza (2nd Floor),
PurboAganagar, Keranigonj, Dhaka
Mobile: (02) 7763273
Email: smeaganagar@primebank.com.bd
Fax: 88-02-7763273

Bhujpur SME Branch
Macca Shopping Center (1st Floor),
Bhujpur, Fatickchari, Chittagong
Mobile: 01713-255771
Email: smebhujpur@primebank.com.bd

Chatkhil SME/Agri Branch
Momota Shopping Center, C&B
Road, Chatkhil ,Noakhali
Mobile: (03222) 75113
Email: smechatkhil@primebank.com.bd
Fax: 03222- 75119

Companygonj SME Branch
Mother Shoping Complex,
5, West NabipurNabinagar Road,

Satkhira Branch
Islam Plaza,
AbulKashem Road, Satkhira.
Phone: (0471) 62450, 63007
Fax: 0471-63001

Barisal Division
Barisal Branch
37, Hemayet Uddin Road,

Muradnagar, Companygonj, Comilla


Mobile: (0265) 9090
Email: smecompanygonj@primebank.com.bd
Fax: (0265) 9090

Heyako Bazar SME Branch
Chowdhury Building,Heyako Bazar,
Bhujpur, Fatikchari, Chittagong
Mobile: 01730794626

437

Annual Report 2014


Jhikorgacha SME/Agri Branch
Zaman Market (ist floor), Holding No.
522, Jhikorgacha, Jessore.
Mobile: (04225) 71780
Email: smejhikorgacha@primebank.com.bd
Fax: 04225-71788
Khawjanagar SME /Agri Branch
Subarna Rice Mill,
Khawjanagar, Kushtia
Mobile: 01730-373919
Email: smekhajanagar@primebank.com.bd

Madhabpur SME Branch
Katiara, Madhabpur, Habiginj
Mobile: (08327) 56327
Email: smemadhabpur@primebank.com.bd
Fax: 08327-56343

Madunaghat SME/Agri Branch
Mabia Emporium, Madunaghat
Bazar, Hathazari, Chittagong
Mobile: (031)2573206
Email: smemadunaghat@primebank.com.bd
Fax: 031-2573205

Narsingdi SME Branch
B.S. Plaza (1st Floor), 9, North
KandaparaBazir More, Narsinghdi
Mobile: (02) 9463343
Email: smenarsingdi@primebank.com.bd
Fax: 02-9463343

Nawabpur SME Service Centre
243-244 Nawabpur Road
Mollik Plaza (2nd floor) Ward # 35,
Thana- Bangshal Dhaka-1100.
Mobile: 02-9571896
Fax: 02-9512179

Posta SME Branch
Holding#90, Ward#62, Water
Works Road, Posta, Lalbag, Dhaka
Mobile: (02) 9571896
Email: smeposta@primebank.com.bd
Fax: (02) 9571896

Raipur SME/Agri Branch
Queen Complex, Holding #514/15,
Main Road, Raipur, Laxmipur
Mobile: (03822) 56396
Email: smeraipur@primebank.com.bd
Fax: 03822-56397

Sherpur SME Branch
819, Municipal Road,
Habib Mansion (1st Floor),
Narayanpur, Sadar, Sherpur
Mobile: (0931) 62176
Email: smesherpur@primebank.com.bd
Fax: 0931-62175

438

Sonargaon SME Branch


Madina Tower (1st Floor),
Habibpur, Sonargaon, Narayangonj
Mobile: (02) 7656359
Email: smesonargaon@primebank.com.bd
Fax: 02-7656362
Syedpur SME Branch
Radish Complex, Sayedpur,
Jagnnathpur, Sunamganj
Mobile: 01713-255776
Email: smesyedpur@primebank.com.bd
Takerhat SME Branch
Nasirpur, Rajoir, Madaripur
Mobile: 01713-255772
Email: smetakerhat@primebank.com.bd

Thakurgaon SME Branch
Chowdhury Complex (1st Floor),
Nishchintapur, Sadar, Thakurgaon
Mobile: (0561) 52295
Email: smethakurgaon@primebank.com.bd
Fax: 0561-52538
Subsidiary Companies
Prime Exchange Company (Pte)
Limited, Singapore
Main Branch
2A Desker Road, (2nd floor)
Singapore 209549
Tel: (+65) 6392 4996,
(+65) 6392 4829
Fax: (+65) 6392 4838
Jurong East Branch
Block: 134 #01-305 Jurong Gateway
Road, Singapore 600134
Tel: (65) 68994647
Fax: (65) 65617559
Email: primex@singnet.com.sg
PBL Exchange (UK) Ltd
Email: pbl.ex.uk@primebank.com.bd
Website: www.pblexchange.co.uk
London Branch
16 Brick Lane London
E1 6RF
Tel: 0207 650 0005
Mob: 0793 922 7610
Oldham Branch,
Manchester
104 Featherstall Road
North Oldham
OL9 6BX
Tel: 0161 652 2444
Fax: 0161 620 6303

Birmingham Branch
493 Coventry Road
Birmingham, B10 0JS
Tel: 01217735553
Cell: 07916252007

PBL Finance (Hong Kong) Limited
Suite 1407, 14/F Admiralty Centre
Tower One
18 Harcourt Road, Hong Kong
Tel.: +852 25292710, +852 25292719
Cell: +852 62742996; +852 63135258;
+852 54191413
Fax: +852 25296009
SWIFT: PRBL HK HH
Email: rashed@pblfinancehk.com,
masud@pblfinancehk.com, pbl.
finance.hk@primebank.com.bd
Prime Bank Investment Ltd.
Peoples Insurance Bhaban (11th
Floor)
36 Dilkusha C/A
Dhaka 1000
Phone: +88 02 9555674, +88 02
9557688
Fax: +88 02 9559257
Email: pbil.bd@gmail.com,
mbid@primebank.com.bd
Prime Bank Securities Limited
29 Rajuk Avenue (3rd Floor)
Motijheel C/A, Dhaka-1000
Phone: +880-2-9513396-7
Fax: +880-2-9566912
Email: pbsl@primebank.com.bd
Web: www.pbsl.com.bd
Prime Bank Foundation
House No. # 08 (2nd Floor)
Road No. # 19/A, Block - E
Banani, Dhaka - 1213.
PABX: 8813788, 8813800
Direct Phone: 8828900
Fax: 9883982
Web: www.primebankfoundation.org

Glossary
AD
Authorized Dealer
ALCO
Asset Liability Committee
ATM
Automated Teller Machine
BB
Bangladesh Bank (Central Bank of Bangladesh)
B/L Bad/Loss
BA
Bangladesh Accounting Standard
BIBM
Bangladesh Institute of Bank Management
CRR
Cash Reserve Requirement
CRG
Credit Risk Grading
CSR
Corporate Social Responsibly
CPI
Consumer Price Index
CDBL
Central Depository Bangladesh Limited
CBS
Core Banking Software
CRISL
Credit Rating and Information Services Ltd.
DCFCL
Departmental Control Function Check List
DEPZ
Dhaka Export Processing Zone
DP
Depository Participants
EPS
Earning Per Share
EPZ
Export Processing Zone
FY
Fiscal Year (July to June)
GDP
Gross Domestic Product
GRI
Global Reporting Initiative
HOB
Head of Branch
ICAB
Institute of Chartered Accountants of Bangladesh
IT
Information Technology
IMF
International Monetary Fund
IAS
International Accounting Standard
IPO
Initial Public Offering
LC
Letter of Credit
MBID
Merchant Banking and Investment Division
MTMF
Medium Term Macro Economic Framework
MANCOM Management Committee
NII
Net Interest Income
NPL
Non Performing Loan
NCBs
Nationalized Commercial Banks
OBU
Offshore Banking Unit
PCBs
Private Commercial Banks
PBL
Prime Bank Limited
PECL
Prime Exchange Co. Pte.Ltd.
PBIL
Prime Bank Investment Ltd.
PBSL
Prime Bank Securities Ltd.
POS
Point of Sale
PV
Present Value
RWA
Risk Weighted Assets
RMG
Readymade Garments
ROA
Return on Assets (excluding contingent items)
ROE
Return on Equity
R&D
Research and Development
ROD
Rights Share Offer Document
SAFA
South Asian Federation of Accountants
SME
Small and Medium Enterprise
SOP
Standard Operating Procedure
SLR
Statutory Liquidity Requirement

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