Annual Report 2018 SERVICE UNBOUNDED SERVICE UNBOUNDED Customer satisfaction is the first priority of IFIC Bank. We have undertaken time-tested and robust initiatives to meet and surpass our customers’ expectations. So long our customers have graced us by visiting our branches and service centres. Henceforth, our motto is to reach out to the customer 24/7 to make banking easy and pleasant. This will be delivered through time honoured bricks and mortar presence as well as through digital platforms. We are also opening banking booths to be in your neighbourhood and extending our firm hands through a robust digital platform. We are creating a virtual banking service proposition by setting a 24/7 interactive Customer Care Centre. By keeping you in mind we have launched need based and customer friendly products like ‘Aamar Account’, ‘IFIC Home Loan’, ‘IFIC Agami’ and customer centric services like One Stop Service Model. We have also developed our Customer Care Centre into a One-Stop Touch Point. Hence, we are committed to be around you, all time, to deliver an unbounded banking experience. 2018 Highlights Deposits Assets $ 226,333 m $ 283,073 m +13.1% +11.8% Investments Loans & Advances 206,930 m $ 31,304 m $ +12.4% +15.4% Mortgage Loan Market $ 29,114 m Capitalization +11.1% $ 14,592 m Investment in Human Capital $ 29 m Participants 3,697 211 Training Programs CRAR ROE $ 12.63% $ 7.36% Operating Profit PBT PAT $ 3,895 m $ 2,859 m $ 1,570 m Total Equity $ 22,116 m +7.7% 1 IFIC Bank I Annual Report 2018 2 IFIC Bank I Annual Report 2018 Contents 3 IFIC Bank I Annual Report 2018 CONTENTS Rationale of the Cover Inner Front Directors’ Report 34 2018 Highlights 01 Report of the Executive Committee 62 118 292 Letter of Transmittal 06 Report on the Market Discipline Important Events Activities of the Audit Committee 64 Vision 08 Market Discipline - Disclosures on Important Events 292 Report of the Risk Management Committee 67 Mission 08 Risk Based Capital 118 Corporate Governance Practices 69 Core Values 09 Report on Sustainable Finance 135 Compliance Report on BSEC’s Notification 72 Report on Risk Management 138 CEO and CFO’s Declaration to the Board 86 Corporate Social Responsibility 155 296 Certificate of Compliance Auditors 87 10 Products and Services 158 Branch Network Ethical Principles Branch Network of IFIC Bank Limited 297 Codes of Conduct 10 Branch Network of Nepal Bangladesh Business Ethics 12 88 159 Bank Limited, Nepal 305 Management Discussion And Analysis HR Compliance 12 Financial Statements Branch Network of Oman Exchange Strategic Priority 13 Management Discussion And Analysis 89 LLC, Oman 308 Independent Auditor’s Report 160 Cautionary Statement Value Added Statement 95 Branch and Booth of IFIC Money Transfer Regarding Forward Looking Approach 14 Consolidated and Separate (UK) Limited, UK 309 Market Value Added Statement (MVA) 96 Financial Statements 165 Global Network of Correspondent Banks 310 Economic Value Added Statement 96 Financial Highlights of the Bank 257 15 DuPont Analysis 96 Financial Statements of Off-shore Banking 259 Human Capital 96 IFIC Profile Corporate Profile 15 Global Corporate Structure 16 264 313 102 AGM Notice Milestones in the Development 17 Financial Statements of the Subsidiaries Branding and Promotional Activities IFIC Securities Limited Notice of the 42nd AGM 313 Branding and Promotional Activities 102 Directors’ Report 265 Attendance Slip 315 18 Media Highlights 104 Independent Auditor’s Report 267 Proxy Form 317 Information on Corporate Governance Financial Statements 269 Composition of Board of Directors 19 IFIC Money Transfer (UK) Limited Executive Committee of the Board 19 107 Directors’ Report 285 Audit Committee of the Board 19 Shareholders’ Information Independent Auditor’s Report 286 Risk Management Committee of the Board 19 Directors’ Shareholding Status 108 Financial Statements 288 Group Photo of Board of Directors 20 Distribution of Shareholding 108 Directors’ Profile 22 Five Years Performance 109 Deputy Managing Directors’ Profile 24 Five Years Graphical Presentation 111 Senior Management Team (SMT) 25 Market Price Information 114 Senior Managment 26 Financial Calendar 115 Chairman’s Message 27 Redressal of Investors’ Complaints 115 Managing Director & CEO’s Review 30 Glimpses of the 41st AGM 116 4 IFIC Bank I Annual Report 2018 CONTENTS Rationale of the Cover Inner Front Directors’ Report 34 2018 Highlights 01 Report of the Executive Committee 62 118 292 Letter of Transmittal 06 Report on the Market Discipline Important Events Activities of the Audit Committee 64 Vision 08 Market Discipline - Disclosures on Important Events 292 Report of the Risk Management Committee 67 Mission 08 Risk Based Capital 118 Corporate Governance Practices 69 Core Values 09 Report on Sustainable Finance 135 Compliance Report on BSEC’s Notification 72 Report on Risk Management 138 CEO and CFO’s Declaration to the Board 86 Corporate Social Responsibility 155 296 Certificate of Compliance Auditors 87 10 Products and Services 158 Branch Network Ethical Principles Branch Network of IFIC Bank Limited 297 Codes of Conduct 10 Branch Network of Nepal Bangladesh Business Ethics 12 88 159 Bank Limited, Nepal 305 Management Discussion And Analysis HR Compliance 12 Financial Statements Branch Network of Oman Exchange Strategic Priority 13 Management Discussion And Analysis 89 LLC, Oman 308 Independent Auditor’s Report 160 Cautionary Statement Value Added Statement 95 Branch and Booth of IFIC Money Transfer Regarding Forward Looking Approach 14 Consolidated and Separate (UK) Limited, UK 309 Market Value Added Statement (MVA) 96 Financial Statements 165 Global Network of Correspondent Banks 310 Economic Value Added Statement 96 Financial Highlights of the Bank 257 15 DuPont Analysis 96 Financial Statements of Off-shore Banking 259 Human Capital 96 IFIC Profile Corporate Profile 15 Global Corporate Structure 16 264 313 102 AGM Notice Milestones in the Development 17 Financial Statements of the Subsidiaries Branding and Promotional Activities IFIC Securities Limited Notice of the 42nd AGM 313 Branding and Promotional Activities 102 Directors’ Report 265 Attendance Slip 315 18 Media Highlights 104 Independent Auditor’s Report 267 Proxy Form 317 Information on Corporate Governance Financial Statements 269 Composition of Board of Directors 19 IFIC Money Transfer (UK) Limited Executive Committee of the Board 19 107 Directors’ Report 285 Audit Committee of the Board 19 Shareholders’ Information Independent Auditor’s Report 286 Risk Management Committee of the Board 19 Directors’ Shareholding Status 108 Financial Statements 288 Group Photo of Board of Directors 20 Distribution of Shareholding 108 Directors’ Profile 22 Five Years Performance 109 Deputy Managing Directors’ Profile 24 Five Years Graphical Presentation 111 Senior Management Team (SMT) 25 Market Price Information 114 Senior Managment 26 Financial Calendar 115 Chairman’s Message 27 Redressal of Investors’ Complaints 115 Managing Director & CEO’s Review 30 Glimpses of the 41st AGM 116 5 IFIC Bank I Annual Report 2018 Letter of Transmittal 6 IFIC Bank I Annual Report 2018 All Shareholders of IFIC Bank Limited Bangladesh Bank Bangladesh Securities and Exchange Commission Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Limited Chattogram Stock Exchange Limited Annual Report for the Year ended on 31 December 2018 Dear Sir, We are pleased to present before you a copy of the Annual Report 2018 along with audited Financial Statements including consolidated and separate Balance Sheet as at 31 December 2018, Profit and Loss Account, Cash Flow Statement, Statement of Changes in Equity, Liquidity Statement for the year ended on 31 December 2018 with the notes thereto of IFIC Bank Limited and its Subsidiaries for your kind information and record. Yours sincerely, Md. Mokammel Hoque, FCS Company Secretary 7 IFIC Bank I Annual Report 2018 Vision At IFIC, we want to be the preferred financial service provider through innovative, sustainable and inclusive growth and deliver the best in class value to all stakeholders. Mission Our Mission is to provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for. We are committed to the welfare and economic prosperity of the people and the community, for we derive from them our inspiration and drive for onward progress to prosperity. In an intensely competitive and complex financial and business environment, we particularly focus on growth and profitability of all concerned. 8 IFIC Bank I Annual Report 2018 Core Values Integrity : Upholding integrity in all that we do, always, everywhere. Fairness : Striving to offer the best to our customers equitably with transparency. Innovation : Encouraging and nurturing creativity. Commitment : Committed to excellence in customer service and maximization of stakeholders’ value through teamwork. 9 IFIC Bank I Annual Report 2018 Ethical Principles Code of Conduct Ethics is the integrity measures, integrity measure and a guiding and anyone else with whom we which evaluate the values, principle to operate the Bank and have contact. norms and rules that constitute to conduct daily business with All members of the Board of the base for individual and customers, vendors, competitors, Directors and its committees, social relationship, from a regulators and other agencies, employees of all levels and moral perspective. Professional the media, and anyone else who categories of IFIC Bank Limited, ethic regulates the relations has a stake in the Bank or with business partners and service between individuals within a whom the Bank has a contact. providers and receivers to and professional group and their IFIC Bank’s Code of Conduct/ from IFIC Bank are expected to relations with the community Ethics sets forth the guiding display the highest standards of whereas organizational ethic principles by which we operate professionalism and commitment defines the code of conduct in an our Bank and conduct our daily to ethics and integrity in all of organization.