ANNUAL REPORT 2017 COMMITTED TO GROWING STRONGER TOGETHER Committed to Growing Stronger Together Southeast Bank, already a strong Bank, is thriving to be efficient ways. Our maturing understanding of corporate stronger in close cooperation and association with its social responsibility is part and parcel of our approach to stakeholders. We maintain and cherish our relationship drive our business forward. with them; from customers, employees and shareholders to suppliers, business partners and wider community. We Today the Bank is more profitable, more flexible and look forward to collectively growing our business together better structured. It is a powerhouse with outstanding in the coming years. As an experienced Bank, we always solutions and attractive products for customers, excellent have the first-mover advantage to offer the best-in-class opportunities for employees and exceptional potential value-added services to the customers. Our people are for investors. In the growth graph, the Bank has been honest, skilled and efficient. They are better sourced, continuously making good profit and declaring good better motivated and better incentivized. We have the dividend to shareholders. The curve of growth keeps power and commitment today to write our future – we shall write it together. Together we are growing stronger soaring upward everyday. Every year, we leave an indelible and together we shall reach new heights of success. We stamp of success on the annals of Bank’s history. For us, are destined to grow because we have proved our strength yesterday is but today’s memory and tomorrow is today’s in the banking sector. We are accessible, committed vision. Success is not a destination to stop only to look and innovative. Customers provide us opportunity to back. It is a journey which we travel together. Together we grow and strengthen our business which we reciprocate are stronger, safer and happier. We dream together for a by extending all the relevant services they need in most brighter future and work hand in hand to make it a reality. Financial Indicators Financial Overviews - Last 5 Years Total Assets Total Loans and Advances (BDT in million) (BDT in million) 220,931 236,608 260,718 291,798 339,288 134,864 147,071 168,878 191,866 234,317 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Profit Before Provision Profit After Tax BDT in million BDT in million 3,379 3,837 3,069 2,435 1,169 6,700 8,290 8,034 8,503 9,062 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Earnings Per Share Return on Assets Percentage Percentage 1.64 1.67 1.23 0.88 0.37 3.68 4.18 3.35 2.66 1.27 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Total Capital to Risk Weighted Assets Ratio Return on Average Risk Weighted Assets Percentage Percentage 1.78 1.82 1.31 0.92 0.39 10.90 12.41 11.52 12.15 10.84 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Non-Financial Indicators Non-Financial Overviews - Last 5 Years A) In terms of Competitiveness Number of Deposit Customers Size of Loan Customers 10,750 11,789 13,025 14,155 15,563 357,210 416,823 468,154 570,196 638,139 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Number of Cardholders Number of Women Entrepreneurs Number of Debit Cardholders Number of Credit Cardholders 107 114 128 174 189 50,265 38,200 74,843 43,513 98,818 50,438 61,327 76,783 134,255 174,271 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Number of Branches Number of Foreign Correspondents 778 790 811 807 825 103 113 122 128 132 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Number of Employees Number of Shareholders 2,118 2,221 2,376 2,616 2,704 65,413 58,169 46,285 39,009 36,038 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Non-Financial Indicators Non-Financial Overviews - Last 5 Years B) In terms of Activity Level Number of Loans Disbursed Number of New Remittance Customers Engaged 55,486 63,421 66,239 73,037 85,353 9,656 9,382 10,717 10,121 10,795 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Number of Debt Collection or Received Market Share of SEBL Deposit (Percentage) Classified Loans Written Off Loans 2.91 2.73 2.65 2.56 2.87 7 7 2 4 5 97.09 97.27 97.35 97.44 97.13 64 125 129 153 147 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Market Share of SEBL Advance Market Share of SEBL Branches (Percentage) (In Number) (Percentage) 3.03 2.90 2.91 2.87 3.25 96.97 97.10 97.09 97.13 96.75 1.19 1.25 1.34 1.33 1.36 98.81 98.75 98.66 98.67 98.64 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Non-Financial Indicators Non-Financial Overviews - Last 5 Years C) In terms of Productivity Level : Per Employee Cost Number of Internet Banking Customers Engaged 1.27 1.49 1.51 1.60 1.76 3,806 4,183 4,068 3,690 1,830 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Accounts Opening Trend 158,985 151,142 138,416 177,260 131,706 2013 2014 2015 2016 2017 D) In Terms of Quality Service Number of Accounts Closed or Became Dormant 13,566 15,942 95,276 159,662 202,809 2013 2014 2015 2016 2017 Number of Service Drops of Call Centre Average Number of Customer Complaints Received 1.00% 3.00% 11.00% 3.00% 2.00% 4.00% 2015 2016 2017 2015 2016 2017 Non-Financial Indicators Non-Financial Overviews - Last 5 Years Customer Satisfaction Level With Customer Satisfaction Level With Technological Facilities Bank Staff 77% 86% 94% 82.5% 90.7% 9187% 91.91% 92.14% 94.76% 96.31% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Average Time Taken to Respond Employee Turnover Rate to Customer Inquiry 3.57% 4.98% 4.61% 4.15% 6.02% 6.23 5.39 2.37 3.26 4.40 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Late Attendance Per Month Number of Employees Received New Qualifications or Completed Courses 2.63% 2.73% 4.64% 4.83% 5.92% 75 226 190 184 136 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Awards and Recognition Southeast Bank awarded SAFA – Best Presented Annual Report Award – 2016 in the Private Sector Banking Category Southeast Bank Limited (SEBL) has been awarded First and bestowed the prestigious awards on the Bank for its Runner Up Award under the category of Private Sector outstanding performance, encouraging financial results Banks and Joint Second Runner Up under the category and indicators, sufficient disclosures for all stockholders of SAARC Anniversary Award for Corporate Governance and its commitment to achieving further excellence in for “Best Presented Annual Report 2016” by South Asian corporate governance and compliance with legal and Federation of Accountants (SAFA). regulatory requirements. South Asian Federation of Accountants (SAFA) exhaustively analyzed the Bank’s Annual Report-2016 Southeast Bank Limited 7 Awards and Recognition Southeast Bank awarded first Position for the best Corporate Governance Southeast Bank Limited has been awarded first position and indicators, sufficient disclosures for all Stakeholders for the best Corporate Governance among private and its commitment to achieving further excellence in sector banks by Institute of Chartered Accountants of corporate governance and compliance with legal and Bangladesh (ICAB). regulatory requirements. The Bank has been ranked in the joint Second position M. Kamal Hossain, Managing Director of Southeast Bank under the category: Private Sector Banks and nominated Limited, received the awards from Abul Maal Abdul for the SAFA BPA Reports Award 2016 Competition. The Muhith, MP, Hon’ble Minister, Ministry of Finance, Institute of Chartered Accountants of Bangladesh (ICAB) Government of the People’s Republic of Bangladesh in a exhaustively analyzed the Bank’s Annual Report-2016 ceremony held on 25 November 2017 at a local hotel in and bestowed the prestigious awards on the Bank for its Dhaka. outstanding performance, encouraging financial results 8 Annual Report 2017 Awards and Recognition Southeast Bank won “Silver Award” for the Corporate Governance Excellence Southeast Bank Limited has been given Silver Award in the “4th ICSB National Award for Corporate Governance Excellence, 2016” in Banking Companies Category by The Institute of Chartered Secretaries of Bangladesh (ICSB). The ICSB bestowed the prestigious Award on the Bank for its corporate governance practices that came out in the disclosures in the Bank’s Annual Report-2016. The Institute of Chartered Secretaries of Bangladesh exhaustively analyzed the Bank’s Annual Report-2016 and sieved out the Bank from many aspirants for its outstanding performance, sufficient disclosures for all Stakeholders and its commitment to achieving further excellence in corporate governance and compliance with legal and regulatory requirements. Southeast Bank Limited 9 Awards and Recognition 10 Annual Report 2017 Awards and Recognition Southeast Bank Limited 11 Balance Score Card BDT in million Financial Highlights 2017 2016 2015 Financial Results Revenue 27,305.90 25,617.57 26,260.72 Provision for Credit Losses 6,628.68 3,728.28 2,323.29 Operating Expenses 4,870.74 4,349.23 3,570.11 Net Revenue 1,168.63 2,435.07 3,069.42 Financial Results(%) Reported/Adjusted efficiency ratio 34.96% 33.84% 30.77% Return on common shareholder's equity (ROE) 4.46% 9.06% 11.86% Net Interest Margin (NIM) 3.42% 3.77% 3.80% Total Shareholder return 4.95 3.10 (0.30) Common Share Performance Market Capitalization 20,356.29 17,146.97 16,230.02 Dividends (%) Dividend yield 0.07 0.11 0.08 Reported/Adjusted dividend payout ratio 1.18 0.75 0.45 Revenue Provision for Operating Expenses Credit Losses 6 8 1 30 61 26 323 728 629 570 349 871 2, 3, 6, 3, 4, 4, 27, 25, 26, 2015 2016 2017 2015 2016 2017 2015 2016 2017 Net Revenue Earnings Per Share Dividend Per Share Dividend Yield 35 66 27 50 00 50 08 11 07 069 435 169 3.