EBL Annual Report 2014.Pdf
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STRATEGY FOR FLEXIBILITY Competitive pressures on business and a slow pace of economy in 2014 created the need for a better understanding of our processes and a greater need for making our business strategy fl exible to keep us on the growth path that is sustainable. What we have realized last year is when growth opportunities are limited in the marketplace it is always rewarding to look inward and remodel and rewrite processes to stabilize growth. In the process, we have felt the need to have a strategy that is fl exible and a mindset that is open to repositioning or realigning business. Our new stance on business and operation has already had a palpable impact on our competitive strength and business performance. 2014 was for us a year of soul searching, a year of restructuring and remodeling, and a year of reviewing our strategy for making it more fl exible to adapt to changes occurring in the marketplace. All this is to continue with the tradition of a sustainable growth that we have so effi ciently established. For we believe, winning for today is building for tomorrow. THE WINNING SPIRIT Ingenuity, responsible fi nance, and the leadership ability to Our two other business units and signifi cant contributors to put insights and perspectives into action have helped Eastern our wallet, corporate and SME banking, also brought local Bank Limited (EBL) emerge as one of the most valuable and international laurels for us making a point that when it brands in the fi nancial sector of Bangladesh. comes to innovation and service excellence they are no less active and meticulous than our retail banking. The underlying At EBL we believe in generating consistent quality in product spirit is that we are fl ourishing and growing as a team and the and service propositions, and everything that we do is geared business units are complementing each other in the pursuit of towards creating value for our stakeholders. excellence. How we are producing consistent quality in every aspect of In corporate banking, we are now being regarded as a leader service and product offering? Or what are the guiding principles in Bangladesh. With innovative and customized solutions and for executing our strategy up to their considerable potential? services, our corporate division emerged as a single point The answer to these questions lies in our culture of team spirit solution provider for customers including project fi nancing, and belief in sustainable growth. Our performance over the past working capital, trade, supply chain, cash management six years or so provides strong evidence how we are pursuing solutions, payroll, syndication, merger, acquisition, and sustainability principles in our everyday banking operations. advisory service. EBL has been closely working with Our focus has always been on performance and effi ciency multilaterals such as IFC, DEG, ADB, FMO, Proparco, CDC, and these qualities are now deeply rooted in our banking Norfund to develop products and build up the largest OBU operations. That we have been registering one of the highest Asset book among the local banks. per employee profi t for a considerable period of time in the In 2013 IFC recognized 25 fi nancial institutions as its best market is a testimony to our passion for performance and partners in trade and supply chain fi nance for 2013. The adherence to sustainable growth strategy. awards were announced at the 6th Global Trade Partners Meeting, which took place in Lisbon in 2014. Our corporate For us 2014 ended with a high note as we were felicitated banking was awarded the “Best Partner for Working Capital with ICSB National Award for Corporate Governance Systemic Solutions” for our innovative solutions for working Excellence. This award refl ects our commitment to corporate capital fi nance to importers and counter party exporters governance and recognition to the importance we attach including Offshore Bill Financing. to governance issues in our organization. As a strong believer of sustainable growth, principles of good corporate Our passion for excellence is refl ected in our effort to adopt governance form the core values of EBL. In order to achieve international best practices and go for globally recognized transparent and sound corporate governance, we have ISO 9001:2008 certifi cation of our processes. In 2011 we adopted international best practices to help us sustain in this got ISO for our Trade Service followed by certifi cation for globalized competitive free market economy. our Service Delivery in 2012. The effort came to a full-circle in 2014 when we were awarded ISO for our centralized Despite relatively slow pace of business, 2014 was signifi cant Operations Division that deals with whole of banking product for us because all three professional bodies, who measure processing and delivery to support consumer, corporate, performance of corporate bodies on different parameters of SME and treasury business. fi nancial reporting, corporate health and governance in the Starting with only 25 people in 2006, our SME unit today is a country, gave us recognition for our quality and consistency key contributor to the profi tability of the bank. To be awarded of performance excellence. Apart from ICSB, the other two the Structured SME Bank of the Year at SME Financing Fair professional organizations are ICAB and ICMAB. jointly organized by Bangladesh Bank and SME Foundation in The most happening unit of our bank is our retail banking. It 2014 was a great recognition for our SME unit and a proof of is said that ‘retail is all about detail’ and at EBL we focus on our innovative and personalized services. the minute details of every product and service we offer to our Our passion for excellence has contributed greatly to customers. Our retail banking stands tall in the market for its enhance our brand value and our perception in the market consistency in innovation and value creation. about world class banking services we offer. At EBL we strive Our passion to serve our customer with warmth, hospitality for and compete to win hearts of our customers and not just and effi ciency has been recognized by the Asian Banker share of their wallet. The accolade we received at the Global Excellence in Retail Financial Services Awards Program, which Brand Excellence Awards held in Singapore in July 2014 has become performance bench mark for consumer banking speaks volumes about sustainability in innovative branding. in Asia Pacifi c, Central Asia, the Middle East and Africa. The This is the second time we have won the Brand Excellence award program evaluates a total of 252 banks in 42 countries Award. This award is a telling evidence of our consistency in in a thorough evaluation process. delivery of brand excellence. EBL has successfully undergone the stringent evaluation We believe that our culture of working together as a team criteria of the award program for each product and process is helping us grow sustainably and our winning spirit and to emerge as the best retail bank of Bangladesh for two insatiable hunger to perform is paying dividend in whatever consecutive years, 2013-14. that we do together as a team. 2 EASTERN BANK LIMITED ANNUAL REPORT 2014 THE WINNING SPIRIT ICSB National Award for Corporate Governance Excellence Structured SME Bank of the Year 2014 2013 in the banking company category Best Retail Bank in Bangladesh 2014 awarded ICMAB Best Corporate Award 2013 by the Asian Banker Global Brand Excellence Award by The World Brand Congress The 14th ICAB National Awards for the Best Presented Annual Reports 2013 3 EASTERN BANK LIMITED ANNUAL REPORT 2014 CONTENTS 11 Letter of Transmittal Stakeholders Information Corporate Governance Report 12 Disclaimer 59 Our Stakeholders 73 Corporate Governance Practices in EBL 13 Vision 60 Financial Highlights 14 Mission 61 Five-Year Progression of EBL 86 BB Guidelines for Corporate Governance: 15 Values 63 Market Price Information Our Compliance Status 16 Strategic Priority 63 DSE Price Volume Chart of 93 BSEC Guidelines for EBL share 17 Code of Conduct and Corporate Governance: Ethical Guidelines 64 Vital Graphs Our Compliance Status 18 Corporate Directory 67 Value Added Statement 99 Certifi cate on Compliance 20 Company Milestones 68 Economic Value Added Statement of Corporate Governance Guidelines 22 EBL Organogram 68 Market Value Added Statement 23 Board of Directors 69 Financial Goals & Performance 30 Management Committees 69 Financial Calendar 35 Directors’ Responsibility 71 Glimpses of the 22nd AGM Statement 37 Report of the Audit Committee 40 Report of the Risk Management Committee of the Board 42 Chairman’s Statement 46 Review of the Managing Director & CEO 48 Directors’ Report 2014 4 FINANCIAL REPORTS 2014 Sustainability Report Management Discussion 176 Auditor’s Report to the 100 Sustainability: An Overview and Analysis Shareholders 178 Consolidated & Separate Financial 100 Approach to Sustainability 116 Financial Review Statements 100 Sustainable Activities 121 Business Review 247 Highlights on the overall activities 101 Environmental and Social 122 Corporate Banking Obligations 248 Financial Statements of Offshore 101 Environmental and Social 125 Treasury Banking Unit (OBU) Initiatives 127 Consumer Banking 263 Financial Reports of the 102 Sustainability Management 131 SME Banking Subsidiaries: 102 General Code of Conduct 134 Business Support 264 EBL Securities Ltd. 102 Integrated Report: Delivering 135 Operations Division 272 EBL Investments Ltd. our Promises 138 Information Technology 279 EBL Finance (HK) Ltd. 105 SME Success Stories