Best Financial Institution of the Year

The bank that does not bank on profits only

Sarwar A Chowdhury

The setting was Bangladesh 1996. The trade, especially the banking business, was flourishing. Here came a Bangladesh-Dutch private sector joint venture commercial bank in the scene to bring in international banking services. Several years later, Dutch-Bangla Bank Limited (DBBL) started turning to society. Making profits apart, the bank looked to ways of contributing to social developments through philanthropic activities.

The bank, which commenced its formal operations on June 3, 1996, believes that banking services and corporate social responsibility (CSR) are co-related. As the bank dreams of a better Bangladesh, it established Dutch-Bangla Bank Foundation in June 2001 to ensure humanitarian activities like rehabilitation of the destitute and neglected section of the society. In order to discharge its CSR in a wider perspective, the bank has recently increased its contribution to the foundation from 2.50 percent to 5 percent of profits after charging loan loss provision.

The foundation has so far adopted various CSR programmes such as 'Scholarship Programme for Meritorious and Poor Students', 'Blind Education and Rehabilitation Organisation', HIV/AIDS Assistance Programme', 'Smile Brighter Programme' for cleft-lipped boys and girls, 'Support to Acid & Dowry Victims', 'Vesico Vaginal Fistula (VVF) Operation' to improve women reproductive health', 'Disaster Management Programme', and 'Donation to Different Organisations'. The foundation also collaborates with other trusts, foundations, associations and bodies having similar activities, programmes and projects.

For carrying out social and philanthropic activities, the bank received an international award on CSR from Asian Institute of Management, Manila in the 3rd Annual Asian CSR Award Programme in 2005. The Institute of Chartered Accountants of Bangladesh also recognized the bank's annual reports as one of the best in terms of disclosures, transparencies and presentation for consecutive years.

Foreign investors such as FMO of the Netherlands and DEG of Germany have shown interest in channeling credit lines with the bank for its steady and solid business growth together with strict disciplines on expenses. Every year the bank receives one or two credit lines from FMO and DEG. This demonstrates that foreign investors have equal confidence in the bank as the local business people have already confirmed it.

From the very first year the bank is maintaining a steady business growth. At the end of 1997, the DBBL's net profit was Tk 8.27 million, while the net profit was Tk 369.19 million in 2006.

As on December 31, 2006, the DBBL's earning per share amounted to Tk 182.64 as against Tk 181.97 of the previous year. Total assets value of the bank stood at Tk 45,493.14 million at the end of 2006.

Owners' equity at the end of 2006 stood at Tk 1,667.25 million as compared to that of Tk 1,348.60 million in 2005. The statutory reserve of the bank rose to Tk 640.52 million in 2006 from Tk 490.46 million in 2005.

The operating profit for the year stood at Tk 1,094.48 million as against Tk 939.58 million in 2005, indicating 16.49 percent raise.

During 2006, DBBL's deposits soared to Tk 40,111.54 million compared to Tk 27,241.11 million during 2005, recording a 47.25 percent increase.

The DBBL's total capital as on December 31, 2006 stood at Tk 2,670.77 million. Its classified loan as on December 31, 2006 stood only at 2.88 percent of the total loan. At the end of the year, the amount of classified loans and advances stood at Tk 815.44 million.

The authorised capital of the bank is Tk 400 million, while the paid up share capital stood at Tk 202.14 million after 2006. The DBBL, listed with the country's stock exchanges, has been declaring 20 percent dividend on an average for the last five years.

DBBL's branches are now automated to provide real time any-where-any-branch banking services. The bank has set up exclusive ATM and Point of Sales (POS) terminals at strategic points throughout the country. The customers can receive banking services 24 hours a day. DBBL has tools to reach everywhere through SWIFT (Society for Worldwide Interbank Financial Telecommunication), internet banking, ATM and POS.

"We have a plan to increase the number of branches to 100, ATM booths to 1,000 and POS terminals to 500 in near future," said the bank's Managing Director Yeasin Ali.

He said, "Supporting the small and medium enterprises is now high on the bank's agenda."

Starting with only 26 employees in 1996, the number of employees stood at more than 600 at the end of 2006.

Talking about the banking regulations, Ali said, "We strictly follow all the banking regulations and guidelines."

"We believe in uncompromising commitment to our customer needs and satisfaction. We want to become customers' first choice in banking. Taking cue from our clientele, we intend to pave the way for a new era in banking that upholds our slogan 'Your Trusted Partner'," he said.