Foreign Exchange Report on Standard Bank Bangladesh Ltd…

Chapter -1: Organizational Profile

Introduction

Standard Bank Limited is one of the largest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. Standard is a bank that serves both clients and country.

Historical Background  

Standard Bank Limited (SBL) was incorporated as a Private Limited Company on May11, 1999 under the Companies Act, 1994 and the Bank achieved satisfactory progress from its commercial operations on June 03, 1999. SBL has introduced several new products on credit and deposit schemes. It also goes for Corporate and Retail Banking etc. The Bank also participated in fund Syndication with other Banks. Through all these myriad activities SBL has created a positive impact in the Market. The Authorized capital of the Standard Bank Limited is Tk. 750.00 million and Paid up capital is 200.00 million. The authorized capital of the bank has been enhanced to Tk.1250 million and the paid up capital amounted to Tk.759 million as on December 31st 2004. The total shareholders equity and reserve stood at Tk.1099.99 million including sponsors capital of Tk.447.60 million as on December 31st, 2004.

Management and Internal Organization  

The board of directors being at the highest level of organizational structure plays an important role on the policy formulation. The board of directors is not directly concerned with the day to operation of bank, at least in written. The board establishes the objectives and policies of the bank. The board has the authority to declare dividend, approve the Balance Sheet, etc. Chairman keeps board of directors informed, on the progress of the bank and implements the policies established.

Use of Proceeds  

 The Company offers its shares to the public in terms of provisions of Banking License dated 20-05-1999 by the Bangladesh Bank and Memorandum and Articles of Association of the Bank. As required by Bangladesh Bank, Sponsors has earlier fully subscribed and paid for their 2,000,000 shares amounting to Tk. 200.00 million as reflected in the accounts as on 31st December, 2004. Further, Sponsors have raised Tk. 13.00 (4.00+9.00) Crore through issuance of Bonus shares and their own contributions. The proceeds of the present issue of 3,300,000 ordinary shares of Tk. 100 each amounting to Tk. 330,000,000 would be utilized in the normal lending and investment business of the Bank.

STANDARD BANK AT GLANCE

Foreign Exchange Report on Standard Bank Bangladesh Ltd...
Foreign Exchange Report on Standard Bank Bangladesh Ltd...

  Table 01:  Five years activities at a glance Year Ended 31st December

 

Vision of SBL

 

To become a leading banking institution and to play a pivotal role in the development of the country.

 Mission of SBL

 

Standard Bank Limited aims to become setting a new standard in banking inBangladesh by prudence, flair and quality of operations in their banking sector. The bank has a mission to achieve the organizational goals. The mission is-

 The bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work force.

Objectives of the Bank:

The motto of the Standard Bank Limited is to explore a new horizon of innovative modern banking. One of the main objectives of the bank is to be a provider of high quality products and services. The bank also caters to the needs of its corporate clients and provides a comprehensive range of financial services to national and multinational companies. With growing technological revolution in the bank in the not-so-distant future, the Bank is contemplating to introduce ATM service and Credit/Card service to its esteemed clients within the shortest possible time.

It renders all types of personal and business banking services to the customers of all strata of the society within the framework of the Bank Companies Act 1991 and rules and regulations lay down by Bangladesh Bank from time to time. Diversification of products and services and innovation of new products suited to the needs of the customers in keeping with relevant rules and laws have culminated in it being viewed as a niche Bank in the market.

Ø  Subsidiaries and Affiliates:

 

The Company does not have any subsidiary and does not propose to have any in the foreseeable future. However, the bank intends to keep an open mind to take advantage of any business expansion possibilities where creation of any subsidiary may be warranted.

Ø  Business Operations:

 

The product range of Standard Bank Limited consists of loans of various types for generating interest income and also for offering banking services of various types to ensure generating fees and commissions for it.

 

Strategies

 

üTo raise capital up to Tk. 1000.00 million by May 2005.

 

üTo increase direct contact with the clients in order to cultivate a closer relationship between the bank and its clients.

 

üTo strive for clients satisfaction through quality control and delivery of timely services.

 

üTo identify clients’ credit and other banking needs and monitor their perception towards employee’s performance in meeting those requirements.

 

üTo review and update policies, procedures and practices to enhance the ability to extend better service to clients.

 

üTo train and develop all employees and provide them adequate resources so that clients’ needs can be reasonably addressed.

 

ü  To promote organizational effectiveness by openly communicating company’s plans, policies, practices and procedures to employees in a timely passion.

 

üTo cultivate a working environment that fosters positive motivation for improved performance.

 

üTo diversify portfolio both in the retail and wholesale market.

 

Features of SBL

There are so many reasons behind the better performance of SBL than any other newly established banks:

vHighly qualified and efficient professionals manage the bank.

 

vSBL has established a core research and planning division comprising skilled person from the very inception of the bank.

 

vBanking operations of all branches of SBL has been computerized to provide the frequently customer service.

 

vSBL has become a member of the SWIFT system to expedite foreign exchange transaction.

 

vSBL provides attractive interest rate the other financial bank.

 

vThe bank provides loans to the clients at lower interest rate with easy and flexible condition than others do.

 

vProfit earning is not the only aim of SBL. The bank is responsible to maintain the social duties.

 

vThe bank frequently arranges customers meeting to achieve their valuable suggestions.

 

vLetter of Credit (L/C) commission and other charges are very lower than the others.

Figure 01: Status of Share Capital and Reserve fund of Standard Bank Limited

 

                           Capital and Reserve (Million Taka)

Foreign Exchange Report on Standard Bank Bangladesh Ltd...

Deposit

The deposit base of the bank continues to resister steady growth and stood at Tk. 8731.35 million as on December 31st, 2004 as against Tk. 5612.42 million as on December 31st 2004. It is an increase of 55.57%; the bank has by this time achieved a stable and sizable deposit base and has managed its deposit actively for the purpose of both liquidity and profitability.

 

Loans and Advance

 

The total loans and advances of the Bank stood at Tk. 7800.95 million (including bill purchased and discounted) as on December 31st, 2004 compared to Tk. 4952.24 million as of December 31st, 2003 showing an increase of 57.52%.

 

Figure 02: Deposit and Advance for STANDARD BANK LIMITED

 

 Deposit and Advance (Million Taka)

  Foreign Exchange Report on Standard Bank Bangladesh Ltd...

Investment

 

The investment has always an inverse relationship with capital adequacy ratio although it contributes to the desired bottom figure. The size of the investment portfolio in the year 2004 rose at Tk.943.08 million including government Treasury bill and the other security bonds against Tk. 522.25 million are showing an increase of 80.58%.

 

Export Business

 

 Export business handled by the Bank during the year 2004 amounted to Tk. 3536.51 million as against Tk.1713.21 million of the preceding year registering an increase of 106.43%.

 

Import Business

 

The total quantum of import business handled by the Bank in 2004 stood at Tk.11353.45 million as compared to the volume of Tk.6435.83 in 2003 registering an increase of 76.41%. 

 

Modernization and Development of the Branches

 

 The bank has endowed the branches with modern and sophisticated equipments and brought all the branches under computer network using the Bank’s own software in day to day banking for rendering prompt and skilled services to the clients.

 

Auditors of the Bank

 

 The Audit Firms M/s. Howladar & Co. has done audit and Inspection of the Books of Accounts of the Bank for the accounting year ended 31st December 2004. Jointly.

  Foreign Exchange Report on Standard Bank Bangladesh Ltd... Foreign Exchange Report on Standard Bank Bangladesh Ltd...