ANNUAL REPORT 2018-19 TOGETHER WE RISE CONTENTS STRATEGIC REPORT An Overview (Vision, Mission, Objectives & Core Values) ................6 Bank’s Performance ..............................................................................................8 Financial Reviews ...................................................................................................9 Macroeconomic-Outlook ..................................................................................10 Customer Centric Business Model .............................................................. 13 CORPORATE GOVERNANCE REPORT OBJECTIVES Governance at A Glance ...................................................................................16 Board of Directors ............................................................................................... 18 The consolidated as well as standalone financial Profile of Directors ..............................................................................................20 statements, prepared in accordance with NFRS, remain the Chairman's Statement ...................................................................................... 23 The CEO’S Point of View ................................................................................. 25 primary source of communication with stakeholders. The Management Team .............................................................................................26 Department Heads .............................................................................................30 purpose is to show how we are working to improve every Compliance Department Structure............................................................ 32 aspect of our business for the benefit over stakeholders RISK REVIEW Board Level Committee ...................................................................................36 Risk Management Committee......................................................................38 Risk Management And Control Environment ...................................... 40 CORPORATE SOCIAL RESPONSIBILITY Social & Environment Related Initiatives .............................................. 46 CSR Activities ................................................................................................... 48 HUMAN RESOURCE MANAGEMENT Human Resource Overview ............................................................................ 52 HR Policies ..............................................................................................................54 Human Resource Accounting .................................................................... 56 PRODUCTS & SERVICES Sunrise Swasthya Yojana .................................................................................60 Technology Driven ..............................................................................................64 Sunrise Smart Banking .....................................................................................70 Online Account Opening ................................................................................. 72 Deposits ................................................................................................................... 75 Retail Banking ....................................................................................................... 76 Remittance .............................................................................................................. 77 Corporate Banking & Trade Payments ..................................................... 78 Macrofinace ............................................................................................................80 SME Banking ........................................................................................................... 81 Branchless Banking (BLB) .............................................................................. 82 C-ASBA .....................................................................................................................83 Mobile Banking .....................................................................................................83 QR (Quick Response) .......................................................................................84 EMI (Equated Monthly Installment) ..........................................................84 DMAT .........................................................................................................................85 FINANCIAL STATEMENTS Director's Report ............................................................................................. 88 Auditor's Report ..................................................................................................96 Financial Statement ...........................................................................................98 Disclosure under BASEL III .......................................................................... 193 Rating Information ........................................................................................... 196 Financial Highlights ..........................................................................................197 INVESTOR'S RELATIONSHIP Directive from Nepal Rastra Bank ............................................................210 Shareholders Enquiries And Communication ......................................211 Disclosure under Rule 26 ...............................................................................215 BANK'S PERFORMANCE Analysis .............................................................................................................220 Remittance Network ....................................................................................... 224 Correspondent Network ............................................................................... 226 Our Branch Network .......................................................................................230 ATM Locations ................................................................................................... 234 STRATEGIC REPORT CORPORATE GOVERNANCE RISK REVIEW CORPORATE SOCIAL RESPONSIBILITY HUMAN RESOURCE MANAGEMENT PRODUCTS & SERVICES FINANCIAL STATEMENTS INVESTOR’S RELATIONSHIP BANK’S PERFORMANCE STRATEGIC REPORT Sunrise Bank's secret of continued growth and success is it's highly diversified and well-balanced business model. Being among, the preferred banks in Nepal, we have always taken a proactive stance towards improving strategic alignment to drive stronger growth and deliver the highest returns on stakeholder value 2 SUNRISE BANK LIMITED ANNUAL REPORT | 2018-19 3 STRATEGIC REPORT CORPORATE GOVERNANCE RISK REVIEW CORPORATE SOCIAL RESPONSIBILITY HUMAN RESOURCE MANAGEMENT PRODUCTS & SERVICES FINANCIAL STATEMENTS INVESTOR’S RELATIONSHIP BANK’S PERFORMANCE line targets. We have always understood that Strategic supporting our ambitious plans will most certainly depend how well we manage our capital requirements now and in the future. Report Based on this premise, Bank has outstanding debenture worth NPR 1 Billion to augment the supplementary capital as well as to strengthen CCD Ratio. Furthermore, the bank has issued Sunrise Bank’s secret of continued growth 3 Billion Debenture and allotted as on 13th and success is its highly diversified and well- December 2019 after full subscription. balanced business model. Being among the We constantly question the status quo to preferred banks in Nepal, we have always taken find new and better ways to do things. With a proactive stance towards improving strategic fresh eyes, we seek out new ways to meet alignment to drive stronger growth and deliver customer needs and help shape their own the highest returns on stakeholder value.. path, through innovative products, insightful In the year under review, we embraced a advice and invigorating attitude. In doing broader performance-driven strategy to so, we have leveraged on innovation to build transform all key business verticals and support a fully integrated multi-channel banking services, and to sharpen their alignment with system that combines traditional and digital our vision to ‘Establish Sunrise Bank as a lead channels, giving rise to an unprecedented bank in all places of our branch locations and level of customer convenience. Innovation has nation-wide’. At the heart of our strategy is the helped us to simplify our procedures, reduce perfect blend of our corporate goals with the organizational layers and delegate more aspirations of stakeholders, which prompted decision making powers to branches, enabling us to leverage on four key levers; strengthen us to respond to customers’ needs faster than top line, enhance digital capability, boost core ever before. Meanwhile, amidst the growing capital and expand the bottom line. To grow risk of cyber security threats, we have begun the top line in 2018/19, we continued to orient to emphasize on innovation to preserve both ourselves more consistently towards Agri, customer privacy and data security. Retail and MSME customers in all core markets. At the same time, to strengthen our roots as a commercial bank, we adopted a two-pronged approach; firstly to increase our penetration and capture market share in selected retail segments and secondly to be the first-mover to promote unique, as well as structured solutions to capture the Retail and Corporate segment. Hand-in-hand with this volume driven strategy we enhanced digital capabilities, for which our IT transformation programme