ISLAMI BANK Annual Report 2017.pdf - Annual Report 2017 Sustainable growth Shared prosperity DISCLAIMER Islami Bank Bangladesh Limited This e-mail

ISLAMI BANK Annual Report 2017.pdf - Annual Report 2017...

This preview shows page 1 out of 400 pages.

You've reached the end of your free preview.

Want to read all 400 pages?

Unformatted text preview: Annual Report 2017 Sustainable growth Shared prosperity DISCLAIMER: Islami Bank Bangladesh Limited: This e-mail including any attachment with it may contain privileged, proprietary & confidential information and is intended solely for the addressee. If you are not the intended recipient of this e-mail, you are hereby notified that any use, review, disclosure, copying, distribution or taking any action in reliance upon the contents of this emailed information is prohibited. If you received this in error or by mistake, (i) do not go through, forward, print, copy or otherwise disseminate this e-mail, (ii) notify the sender and (iii) delete this e-mail. The Bank considers unencrypted e-mail & the recipients should check this e-mail with attachments for viruses. No liability can be cast upon the Bank for any error or omission in the contents of the message that arise, as a result of e-mail transmission and the Bank cannot be made liable for any loss suffered by any person, on account of having acted upon any message which is vitiated by error, omission or interception. Islami Bank Bangladesh Limited 2017 Annual Report Annual Report 2017 Sustainable growth Shared prosperity Sustainable Growth Shared Prosperity Sustainable Development-We mean to meet the needs of the present without compromising the ability of future generations to meet their own needs. Keeping in view, we strive to ensure Economic Development, Social Development as well as Environmental Protection driven by digital technology. To this extent, we pay attention to our society and environment instead of mere growth. To its end in view, we focus on strategic partnership with all our stakeholders for building shared prosperity. Islami Bank Bangladesh Limited Annual 2017 Report Registered Office: Islami Bank Bangladesh Limited, Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh, GPO Box No.233; Phone: PABX (88-02) 9563040, 9560099, 9567161, 9567162; Mobile: 88-01711 435638, 88-01711-435639 FAX: 88-02-9564532, 9568634; SWIFT: IBBLBDDH, e-mail: [email protected]; Website: 2 Islami Bank Bangladesh Limited 2017 Annual Report THE MESSAGE FROM THE HOLY QUR’AN (8-9 ) And they (pious men) feed, for the love of Allah, the poor, the orphan and the captive. (Saying),"We feed you for the satisfaction of Allah; no reward do we desire from you, nor thanks. (Surah Ad-Dahr: 8-9) (245: ) Who is he that will lend to Allah a goodly loan so that He may multiply it to him many times? And it is Allah Who decreases or increases (your livelihood), and unto Him you shall return. (Surah Al Baqarah: 245) (261: ) The likeness of those who spend their wealth in the Way of Allah, is as the likeness of a grain (of corn); it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He pleases. And Allah is All-Sufficient (for His creatures' needs), All-Knower. (Surah Al Baqarah: 261) 3 Islami Bank Bangladesh Limited Annual 2017 Report GUIDANCE FROM THE HADITH Narrated Sa`d bin Abu Waqqas (R), The Prophet (SAW) came visiting me while I was (sick) in Mecca. I said, "O Allah's Messenger (SAW)! May I will all my property (in charity)?" He said, "No." I said, "Then 'One-half?" He said, "No". I said, "One third?" He said: "Yes, one third, yet even one third is too much. It is better for you to leave your inheritors wealthy than to leave them poor begging others. (Sahih Al Bukhari and Sunan An-Nasa'i). Narrated from Abu Hurayrah (R), He said that the Messenger of Allah (Peace be upon him) said, "Allah is in the help of a person, till the person is in the help of his brother (i.e. other person). (Sahih Muslim) 4 Islami Bank Bangladesh Limited 2017 Annual Report Letter of Transmittal All Honourable Members/Shareholders, Bangladesh Bank, Registrar of Joint Stock Companies and Firms, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited Subject: ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2017 Dear Sir, Please find an enclosed copy of the Annual Report along with the audited Financial Statements including consolidated and separate Balance Sheet as at December 31, 2017 and Profit & Loss Account, Cash Flow Statements and Statement of Changes in Equity for the year ended December 31, 2017 along with the notes thereon of Islami Bank Bangladesh Limited and its subsidiaries (Islami Bank Securities Limited and Islami Bank Capital Management Limited) for your kind perusal and record. Thank you. Yours faithfully, (J Q M Habibullah, FCS) DMD & Company Secretary 5 Islami Bank Bangladesh Limited Annual 2017 Report Contents 01 Company Ethos 02 Corporate Structure 03 Corporate Governance 04 Directors’ Report 05 Risk Management Company Ethos Letter of Transmittal Notice of 35th AGM Vision Mission Strategic Objectives Core Values & Commitments Code of Conduct and Ethical Principles Awards & Recognitions Forward Looking Statement Future Outlook: Priorities for 2018 Chairman’s Message Managing Director’s Review Corporate Milestones Sponsors & Placement Holders 5 8 9 10 11 12 13 14-16 17 18 19-23 24-31 32-33 34-35 Corporate Structure Corporate Information Corporate Organogram Board and its Committees Shari’ah Supervisory Committee Management Committee (MANCOM) Senior Executives Directors’ Profile 36-37 38 39-42 43 44 45 46-59 Corporate Governance Corporate Governance Report CEO and CFO’s Declaration to the Board Certificate on Compliance of Corporate Governance Compliance Status of BSEC Guidelines Global Reporting Initiatives Disclosure Indes Directors’ Report Directors’ Report - Corporate Profile - Financial Review - Business Model - Business Review Integrated Reporting 60-84 85 86 87-90 91-94 95-139 98-102 102 103-105 105-139 140 Risk Management Report of Risk Management Committee Risk Management Report Capital Plan Disclosure on Risked Based Capital (Basel III) Non-Performing Investment Management ICT Management Green Banking Stakeholder and materiality Sustainability Report 6 141-143 144-159 160-161 162-184 185-186 187-191 192-197 198-202 203-208 Islami Bank Bangladesh Limited 2017 Annual Report Management Report & Commentary 06 Management Report & Commentary 07 Financial Statements 08 Consolidated Financial Statements 09 Financial Statements-IBBL Management Report and Analysis Report on Financial Inclusion Products and Services Alternative Delivery Services Communication and Business Promotion Stakeholders’ Information Graphical Presentation Segment Information Horizontal & Vertical Analysis Profitability, Dividends, Performance and Liquidity Ratios Statement of Value Added Financial Calendar Financial Highlights Five Years Performance Media Highlights Success Story Report of the Shari’ah Supervisory Committee Audit Committee Report 209-213 213 214-218 219-223 224-227 228-234 235-237 238 239 240 241-245 245 246 247-248 249 250-265 266 267-270 Financial Statements Independent Auditors’ Report 271-273 Consolidated Financial Statements Consolidated Balance Sheet Consolidated Profit and Loss Account Consolidated Cash Flow Statement Consolidated Statement of Changes in Equity 276-277 278 279 280-281 Financial Statements-IBBL Balance Sheet Profit and Loss Account Cash Flow Statement Statement of Changes in Equity Liquidity Statement Notes to the Consolidated Financial Statements Financial Statements-OBU Financial Statements-IBSL Financial Statements-IBCML Standard Disclosure Index Bank’s Network IBBL ATM & IDM Location Glossary of Terms Proxy Form & Attendance Slip 282-283 284 285 286-287 288 289-344 345-350 351-370 371-378 379-381 382-383 384-392 393-394 395 7 Islami Bank Bangladesh Limited Annual 2017 Report Bmjvgx e¨vsK evsjv‡`k wjwg‡UW Islami Bank Bangladesh Limited Head Office, Islami Bank Tower 40, Dilkusha Commercial Area, Dhaka. NOTICE OF THE 35TH ANNUAL GENERAL MEETING Notice is hereby given that the 35th Annual General Meeting of Islami Bank Bangladesh Limited will be held on Monday, the 25th June 2018 at 10.00 AM at Kurmitola Golf Club, Dhaka Cantonment, Dhaka for transacting the following business: AGENDA 01. To receive, consider and adopt the Audited Financial Statements for the year ended 31st December 2017 and Reports of the Directors and Auditors thereon. 02. To approve Dividend for the year ended 31st December 2017. 03. To appoint Auditor(s) and to fix up their remunerations for the year 2018. 04. To elect/re-elect Directors. All Members are requested to kindly make it convenient to attend the Meeting in time. By order of the Board of Directors Dated: Dhaka 25th April, 2018 (J Q M Habibullah, FCS) DMD & Company Secretary ................................................................................................................... Notes: a) Record date is 21.05.2018 i.e. the honorable shareholders whose names will appear in the CDS (Central Depository System)/Company’s Register on 21.05.2018 will be entitled to get dividend for the Year 2017 against their shareholdings. b) A member eligible for attending and voting at the Annual General Meeting may appoint a proxy on his/her behalf. c) Power of Attorney / Proxy Form must be submitted to the Registered Office or Share & Bond Division (63 Dilkusha C/A, 5th Floor, Dhaka) of the Company at least 48 (Forty Eight) hours before the Meeting i.e. 10.00 AM on Saturday, the 23rd June, 2018. Revenue Stamp of Tk.20/- (Taka Twenty) only shall have to be affixed on the Proxy Form. d) Annual Report, Attendance Slip and Proxy Form along with the Notice will be sent to the honourable shareholders by post/courier. The honourable shareholders may also collect Proxy Form from the Share & Bond Division of the Company. e) Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2017 along with the Auditors’ Report thereon shall be available on Bank’s website: . f) Election of Directors will be dealt in terms of Articles of Association of the Company and relevant rules/laws/circulars in force. g) Entry is reserved only for members and Proxies / Attorneys. Attendance slip (duly signed) must be submitted to the Registration Counter at the time of entrance. Registration Counter shall remain open till 11:00 AM. 8 Islami Bank Bangladesh Limited 2017 Annual Report Vision Our vision is to always strive to achieve superior financial performance, be considered a leading Islami Bank by reputation and performance. Our goal is to establish and maintain modern banking techniques, to ensure soundness and development of the financial system based on Islamic Principles and to become a strong and efficient organization with highly motivated professionals, working for the benefit of people, based on accountability, transparency and integrity to ensure stability of the financial systems. We will try to encourage savings in the form of direct investment. We will also try to encourage investment particularly in projects, which are more likely to lead to higher employment. 9 Islami Bank Bangladesh Limited Annual 2017 Report Mission To establish Islamic Banking through introduction of a welfare oriented banking system and also ensure equity and justice in all economic activities, achieve balanced growth and equitable development through diversified investment operations particularly in the priority sectors and less developed areas of the country. To encourage the socio-economic development and financial services to the low-income community particularly in the rural areas. 10 Islami Bank Bangladesh Limited 2017 Annual Report Strategic Objectives The general strategic objectives of IBBL is to consider balanced scorecard methodology and continually adhere the same through annual reviewing while some specific objectives are mentioned below: Financial Efficiency To achieve sustainable growth in all key financial indicators; To increase bottom line through maximization of income and efficient management of expenditure. Customer Focus Develop strategic partnership by addressing their existing and dynamic needs of product and services; Endeavor to attract customer through delivering need based financial services; Continuous improvement of product and services for adopting changing need of customer base to retain market share. Operational Excellence Increase community outreach through innovation of various marketing channels; Increase efficiencies through use of virtual technologies for moving towards financial excellence; Improve internal and external communications through social communication network; Develop and implement a promotional plan to expedite financial inclusion; To include unbanked people into banking with Over the Counter banking services. Human Development Employ professionals who create success for customers; To develop the leadership abilities and potential of our team; To align incentives and staff rewards with performance; To continually learn and adopt global updated best practices. 11 Core Values & Commitments Adherence with Islamic Shari’ah Superiority of Islamic Financial System is the centre of our strength. All deposit and investment products as well as operational ethics are guided by the principles of Islamic Banking and Shariah. Welfare Banking Ensure equity & justice in all economic activities. Achieve balanced growth and equitable development. Banking unbanked population through financial inclusion. Socially Responsible Banking No investment in socially and environmentally undesirable project. Expanding investment on need based retail and priority sectors of the country. Integrity Act what we believe in. Respect every relationship. Commitments Strict compliance to regulatory requirement. Care for all stakeholders. Believe in continuous improvement. 12 Islami Bank Bangladesh Limited 2017 Annual Report Code of Conduct and Ethical Principles Shari’ah foundation of ethics Avoidance of interest (Riba) in all transactions Ensuring justice and fairness to all the stakeholders Righteousness in dealing with the day to day affairs Ensuring transparency & avoidance of obscurity (Gharar) Principles of personnel ethics Trustworthiness in discharging the assigned duties Dedication in abiding by the rules and regulations Commitment in making one’s work perfect Adherence to truth and avoidance of falsehood Maintaining highest level of honesty and integrity Rules of ethical conduct General Code of Conduct of the Bank Guidelines of National Integrity Strategy Disciplinary procedures regarding the commission of misconduct Conduct towards shareholders, managers and fellow employees Preserving the benefits and interest of the shareholders Maximizing company profit and manage the same ethically Providing fair and equal employment opportunity Ensuring logistic support for employee satisfaction Providing opportunities for professional development Adherence to good corporate governance practices Refraining from any sort of favoritism and biasness Appreciating the value of individual & team contribution Rules of conduct towards those who deal with the institution and related parties Ensuring prompt & responsive approach to the customer need Treating the customers fairly and without any prejudice Ensuring privacy/secrecy of customers/stakeholders information Updating customer regarding suspicious transaction in his account Informing the customers regarding all banking product & services Recognizing the norms, customs, values of the community/society Treating the external counter-parties professionally and impartially Avoiding conflict of interest while negotiating with the counter-parties 13 Islami Bank Bangladesh Limited Annual 2017 Report Awards & Recognitions South Asian Federation of Accountants (SAFA) SAFA awarded IBBL the 1st Position in SAARC Anniversary Award for Corporate Governance Disclosures for the year 2016 and 2012. We were also awarded the 1st position under Private Sector Banks (including Co-operative Banks) in the Best Presented Annual Reports for the year 2012. Institute of Chartered Accountants of Bangladesh (ICAB) ICAB conferred IBBL the 2nd position for good Corporate Governance for the year 2016, 3rd position under Private Sector Banks (including Co-operative Banks) in the Best Presented Annual Reports for the year 2014. ICAB also conferred IBBL the 1st position both under Private Sector Banks (including Co-operative Banks) in the Best Presented Annual Reports and SAARC Anniversary Award for Corporate Governance Disclosures for the year 2012. Institute of Cost and Management Accountants of Bangladesh (ICMAB) ICMAB glorified IBBL with 1st Position amongst the Private Commercial Banks in Islamic Operation in ICMAB National Best Corporate Award – 2016, 2015, 2014, 2013, 2012, 2011, 2010. The Banker IBBL, being only Bank in Bangladesh, entered into the World’s Top 1,000 Banks list in 2012. IBBL has made Bangladesh proud of being among the best 1000 banks in the world, ranked by 'The Banker’. This prestigious ranking is a clear testimony to IBBL’s stability and strength and its leadership in financial sector of Bangladesh. Position in terms of key indicators in 2017: 81st in Performance (Profits on Capital) 346th in Return on Asset (ROA) 765th in Size (Assets base) 846th in Soundness (Capital to Assets Ratio) and 941st in Strength of Tier 1 capital. IBBL won “Bank of the Year Award-2016” conferred by ‘The Banker’, UK’s premier financial magazine of Financial Times Group, London. The award is regarded as the Oscar in banking industry. The Banker has awarded this highly recognized global recognition upon Islami Bank Bangladesh Limited after a vigorous analysis of the performances over the years. IBBL is the only Bangladeshi Bank awarded ever by the The Banker. Global Finance The Global Finance, a reputed USA-based Financial Magazine, adjudged IBBL as the best Islamic Financial Institution of Bangladesh for the years 2008, 2009, 2010, 2011 & 2013. Bangladesh Bank and SME Foundation Bangladesh Bank and SME Foundation jointly conferred IBBL the prestigious award - the best ‘Small Entrepreneur Friendly Bank of the Year’ in 2014 to IBBL considering its contribution to SME financing. 14 Islami Bank Bangladesh Limited 2017 Annual Report Awards The Strongest Islamic Retail Bank in South Asia 2017 NRB Remittance Award 2017 (Gold) Bangladesh Bank Remittance Award 2016 The Strongest Islamic Retail Bank in Bangladesh 2017 Highest Taxpayer in the Banking Sector Award 2017 ICMAB Best Corporate Award 2016 SAARC Anniversary Award for Corporate Governance 2017 Arabian Banker Award 2017 The Banker Award 2016 Best Islamic Bank in Banladesh Large Taxpayer Unit Award 2017 Remittance Gold Award 2016 15 Islami Bank Bangladesh Limited Annual 2017 Report Other Recognitions Islami Bank Bangladesh Limited achieved ‘Islamic Retail Banking Awards (IRBA) 2017’ as Strongest Islamic Retail Bank in South Asian Region conferred by UK-based Financial Intelligence House Cambridge IF Analytica. IBBL was awarded as the highest taxpayer in the banking sector in 2016-2017 tax year by the Large Taxpayer Unit (LTU) of the National Board of Revenue. Islami Bank Bangladesh Limited has been awarded Bangladesh Bank Remittance Award for collecting highest remittance in the year 2016. IBBL is the only Bank among top 20 (twenty) VAT payers in Bangladesh in the year 2016. IBBL received the Asian Banker CEO Leadership Achievement Award-2016 and was recognised as the ‘Best Managed Bank’ in Bangladesh. The award was given at the Asian Banker Summit held at the JW Marriott Hanoi, Vietnam. Gold Medal for outstanding contribution to the foreign remittance services of Bangladesh by Centre for Non-Resident Bangladeshi in 2016. IBBL was awarded the ‘Sardar Patel Award’ 2016 for outstanding contribution in Sustainable Economic Development. Gold medal as ‘Branding Bangladesh Award’ for its outstanding performance in remittance services last year by Centre for Non-Resident Bangladeshi in 2014. Financial Branding Award by Centre for Non Resident Bangladeshis for its outstanding contribu...
View Full Document

  • Fall '16
  • James Bakul Sarkar
  • Islami Bank Bangladesh Limited

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes