Islami Bank Bangladesh Limited Financial & Business Analysis: 1999 "An excellent year, with sound strategic direction, higher deposit balances, increased profitability and operational enhancements"

Exchange Rate at 31 Dec 99 1 USD = 51.15 Bangladeshi Taka Financial Trends

Ownership and Legal Status

Islami Bank Bangladesh Limited was stablished in 1983 as the first interest free Shari'a Bank in the Country. The equity is widely held. Foreign sponsors include Islamic Development Bank, Jeddah; Kuwait Finance House; Jordan Islamic Bank; Bahrain Islamic Bank, Al-Rajhi Company, K.S.A. Paid-up apital is Tk.320 million, with shares held 38% by local shareholders and 62% by foreign shareholders. The Bank has 110 Branches in 6 zones employing 2302 people.

The Year in Brief

Total income after provisions increased by 20.67% to Tk.1.966 million (1998: Tk.1.629 million). Pre-tax profit increased by 20.18% to Tk.178.31 million (1998: Tk.148.39 million). Total Assets increased by 19.26% to Tk.36.785 billion (1998: Tk.30.843 billion). Within this total, investments increased by 42% to Tk.14.849 billion (1998: Tk.10.422 billion). Deposits and other accounts increased by 25.86% to Tk.24.859 billion (1998: Tk.19.751 billion). Expenses (excluding profit to Mudaraba depositors) were Tk.492.6 million (up by 12.73% from Tk.437 million in 1998). Expenses as a percentage of income were 25.06% (1998: 26.83%).

Business Highlights

• The year saw a push to increase the deposit base, with total deposits up by Tk.5.108 billion or 25.86%, against an average growth rate in the Banking sector of 15.53%. The Mudaraba Savings Bond introduced to match assets was a very popular vehicle, while the 5 and 10-year term Mudaraba Special Savings (Pension) scheme was also a source of considerable growth.

• A 7-year perspective investment plan was introduced, aimed at diversification of the investment portfolio by size, sector, geographic area, economic purpose and securities to bring in phases all sectors of the economy and all types of economic activity and economic groups of society. The plan aims to achieve composition of the investment portfolio comprising 5% for Agriculture and rural development; 20% Industrial term investment; 16% Industrial working capital; 7% for Housing and Real Estate; 6% Transportation and Communications, 1% for utilities, 40% for Import, export and other trade activities and 2% for other activities.
  
  
• Sectorial investment at year end comprised:

• Total FX business increased by 5.10% to Tk.43.609 billion (1998: Tk.41.493 billion). Of this amount, some Tk.20 billion related to import, Tk.14.8 billion to export and the remainder to remittances.
  
  
• 5 new branches were opened during the year. Dhaka Zone was divided into two; giving 7 administrative zones providing effective control, close supervision and proper monitoring of branch operations, and assistance with business development.

• Total headcount rose to 2302, with 81 officials recruited during the year to meet increased volumes of business, man new branches and provide full training for all employees.
  
  
• An additional 30 Branches were computerised with IBBS software, bringing the total to 110 - all branches were computerised by year-end. It is planned to introduce ATMs on a shared network basis by 2001.