Marketing Analysis of Product of AB Bank Limited
Banking sector is expanding its hand in different financial events every day. At the same time the banking process s becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day. Generally by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of banks like; Central Bank, Commercial Bank, Savings Bank, Investment Bank, Industrial Bank, Co-operative Bank etc. Here going to discuss a bank which name is AB Bank, which is a commercial bank.
AB Bank Limited, the first private sector Bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982.
Dubai Bank Limited (name subsequently changed to Union Bank of the Middle-east Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the Articles of Association of the Company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group “A” Shareholders, i.e. Bangladeshi Sponsor Shareholders.
During the internship the area of study was the General Banking of AB Bank Ltd. Through achievement of the objectives outlined below, it would like to gather some practical knowledge about the General Banking activates.
The objectives of this internship report are as follows:
- marketing analysis of product of AB Bank Ltd;
- To undertake a comparative analysis of ABBL’s performance over the last four years of its operation;
- To identify the problems relating to general banking activities of ABBL and to make suitable suggestions to solve these problems.
Research is a systematic inquiry whose objective is to provide information to solve a particular problem. Good research generates dependable data, being derived by practices that are conducted professionally and that can be used reliably for decision making about problem. Here I made my research on AB Bank Limited (ABBL), Dhanmondi Branch, which is the biggest branch of ABBL. Conducted that research to gather the information about the general banking activity of ABBL and which will help me to solve those problems which I was found during my research time.
Research Type
Research could be tow type they are:-
I. Quantitative: – When we work with the numerical data we defined it as the quantitative research.
II. Qualitative: – But when we work with the data those are not numerical but descriptive than it will known as the qualitative analysis.
Actually my research was based on the qualitative judgments of ABBL. But when analyze the performance of the ABBL I made the quantitative judgment.
Sample Design
A sample is a part of the target population, carefully selected to represent that population. My target population was the every employees of the ABBL but it was not possible to work with them all, that’s why chose the employee of the ABBL Dhanmondi Branch as a sample to conduct my research.
Survey Method
Basically I made my survey by the face to face interview with the in-charge of different department and also the responsible officer of those departments. And another most important and the primary source to collect necessary data was the observation method. Here I did different type of work by my own which help me to get a clear concept about the work here done. I also made a questioner, on the basis of which I asked question to the employee and answer of those question helped me to find out the problems in different department and the customer demand to the bank. The questioner is following
Q: – What are the problems you face in your department?
a) Infrastructural
b) Manpower
Q: – Are your customer satisfied with your service?
a) Yes
b) No
c) Complain sometime
Q: – How could you improve your service?
a) By recruiting new manpower
b) By arranging a training program for existing employee
Q: – Are you happy with salary and other benefit
a) Yes
b) No
c) Meet minimum level
d) No-comment
Q: – Are you satisfied with the work environment?
a) Co-operative
b) No
Q: – Are the client suggest for the online service?
a) Yes
b) No
Q: – Do you think online will improve work efficiency?
a) Yes
b) No
c) May Be
Q: – How could ABBL Attract Customer?
a) By launching new product
b) By improving service
c) By launching automation
d) By proper marketing
Q: – What is the main driving force of the ABBL?
a) Customer loyalty
b) Modern Banking System
c) Quick service
d) Proper marketing
Q: – Do you think bank should offer more interest on its deposit especially on FDR? If yes how much?
a) No
b) Yeas
· More than any existing bank
· Same to existing bank
Q: – What do you think about the customer loyalty to the bank, ABBL is in which position?
a) Less
b) Almost Same
c) Batter than any Bank
d) Same to leading banks
Scope and Limitation
There were so many problems I had to face to prepare this report. The main problem was the time limitation because I have to submit that report before the end of by internship period. I had to face problem about the information those I expect from AB Bank Limited, Dhanmondi Branch. Another problem I had to face that I had worked in local remittance for 2 months because of that I can’t spend enough time in another department.
AB Bank Limited, the first private sector Bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982.
Dubai Bank Limited (name subsequently changed to Union Bank of the Middle-east Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the Articles of Association of the Company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group “A” Shareholders, i.e. Bangladeshi Sponsor Shareholders.
At present the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT. 800.00 million And BDT. 1105.32 million Respectively. The Sponsor-Shareholders hold 50% of the Share Capital; the General Public Shareholders hold 49.30% and the rest 0.70% Shares are held by the Government of the People’s Republic of Bangladesh. However, no individual sponsor share holder of AB Bank holds more then 10% of its total shares.
Since beginning, the Bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology.
During the last 21 years, AB Bank Limited has opened 68 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India, two Representative Offices in London and Yangon, Myanmar respectively and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World.
AB Bank Limited, the premier sector Bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT. 28,130.00 million, which is precisely 14% higher than the preceding year. On the Advance side, the Bank has been able to achieve 5% increase, thereby raising a total portfolio to BDT. 19,910.00 million, which places the Bank in the top tier of private sector commercial banks of the country. On account of Foreign Trade, the Bank made a significant headway in respect of import, export and inflow of foreign exchange remittances from abroad.
Arab Bangladesh Bank Ltd Should uses a communication solution or communication offered by the telecommunication company. That will increase their communication efficiency and it will reduce the cost of communication because the private telecommunication companies offer the cheapest price than they offer to the individual customer
To be the trendsetter for innovative banking with excellence and perfection
To be the best performing bank in the country and the region.
To exceed customer expectations through innovative financial products & services and establish a strong presence to recognize shareholders’ expectations and optimize their rewards through dedicated workforce.
Keeping ahead of other competitors in productivity and profitability.
To attain budgetary targets fixed in each area of business.
To exceed customer expectations, the management likes to turn this bank into a world-class bank so that all banking related services could be provided efficiently and effectively. Automation will play a vital role. All the branches will come under one network so that customers will enjoy the banking services. Corporate clients will be provided banking services at their doorsteps. Mobile ATM services will be introduced so that customers can be served in any corner of the cities. This service will help to ease the tension of carrying large quantity of money during the salary period. Phone banking and internet banking will allow the customers to withdraw and transfer money at any time. More specifically the bank will provide the following:
- Electronic Fund transfer
- Electronic L/Cs
- Mobile ATM service
- Utility bill payment through ATM cards
- One stop service
- Corporate banking
- Real time banking
Profitability
Operating Profit of the Bank more than doubled during the year 2005 and taka 755.04 million which was the combined effect of 35% growth in Net Interest income and appropriate expenditure control measures among others. Bank excelled in its margin management in a fiercely competitive market. Bottom line was further bolstered by 11%increase in Non-funded income for the year although investment income reduced by 22% compared to 2004. Profit before tax also doubled at Taka 407.47 million. Earning per share (EPS) stood at taka 31.26 while return on equity (ROE) and Return on assets (ROA) were 10.64 and 0.50% respectively.
Deposits
Total deposits at the end of the year 2005 stood at 27361.43 million showing slight reduction compared to 2004. Bank continued to maintain its low coast deposit mix while feeding the growing funding needs related to increase in loans and advances at the same time.
Loans and Advances
Loans and Advances registered a significant growth of 25.73% over last year and stood at taka 21384.63 million. Bank’s portfolio remained well diversified with presence in Cement, Food & Beverages, Ship Breaking, Textile and Garment, Power etc. During the year, all the sectors to its operation registered growth and among them the industrial sector credit grew by 84% while infrastructure sector credit registered growth of 45% respectively.
International Trade
International trade business of the ABBL registered all-round growth in them year 2005. Bank maintained the growth through strengthening of trade finance spectrum by providing various services like issuance of Document Credit, Advising of Export L/C’s, purchase and negotiation of export bills, Documentary Collection, Pre-Shipment Finance, Remittance Disbursement Activities etc. Export growth was 24.70% as the volume rose to taka 12595 million in year 2005. Major contributors were Garment and Frozen fish sectors.
Import in the year 2005 was taka 23151 million marking an increase of 20.16% over the previous year. Major imports were in the category f capital machinery, industrial raw material, milk powder, scrap vessels etc.
ABBL remittance business reached a high note in 2005 as we crossed US $ 100 million and ended with the figure of US $ 115.41 million registering an overall growth of 38.27 %. Providing fast and efficient service and our coverage to reach the doorsteps remained the corner stone of our business. Bank is looking forward to expand its network and catchments capacity dedicated to the service of expatriate Bangladesh.
Merchant Banking Wing
Ever since its launch in 2003 this particular business wing registered tremendous growth both in terms income and profitability. MBW offers various schmes like Portfolio Management, Issue Management, Corporate Advisory and Underwriting. During the year 2005 MBW achieved Net Profit worth taka 137.83 million registering a growth of 64% over the last year.
Bringing an idea into life and benefiting the community, as a whole is what progress, development, and prosperity are all about. We here at AB Bank, believe that the spirit of the entrepreneur is what drives the wheel of progress and development. We know that the key to national development is the growth of your financial assets in the capital market. As your savings grow, so does the nation. We here at AB Bank, the nation’s first private bank with more than 20 years of know- how, have been working relentlessly at the forefront of wealth-creation through our commercial banking operations.
Islamic Banking
The Islamic Banking of ABBL was launched at the end of the year 2004. Throughout the year 2005, considerable efforts were put-in to complete the platform for launching the business in a meaningful way. Sharia Council of the Bank was formed comprising of Ulemas, Faqih, Islamic Banker and also nominees from the ABBL board. The Bye-Laws for the Sharia Council has also been finalized. Sharia Council also approved different products for the business.
Meantime, we have started operating tough collection of Deposit and extending credits in limited way. Till the end of the year, Deposit worth taka 56.8 million was collected through Al-Wadiah (current account) and Mudaraba (savings and term deposit scheme). Besides, advances worth taka 15.1 million where extended to different clients.
Card Division
ABBL is the first domestic commercial bank in Bangladesh to introduce Visa Electron and Visa Credit Card ant the same time. ABBL also the only Bank in Bangladesh to introduce Visa ATM Acquirer along with POS Acquirer, which opened the opportunity for all the Visa Cardholder (domestic and international) to use our ATMs. Recently ABBL have opened an ATM booth in Cox’s Bazar thereby further extending network of ATMs, POS< and Q-Cash ATMs outlets which extended ABBL reach to as far as Munshiganj, Sirajganj, Khulna and Bogra.
Business Automation
“Misys” the core banking solution are being implemented gradually. During the year 2005, seven Branches of the Dhaka Region were upgraded with the new Misys solution there heralding the era of new phase of automation in your Bank. ABBL are now into the Second Phase of Misys implementation whereby six more branches of the Chittagong region is came under the coverage from beginning of the June 2006. By the end of 2006, all the Branches will be hooked to this core system along with the implementation of a whole range of banking solutions. We have embarked on massive project of migration, connectivity and standardization of processes and hardwires throughout the Bank. A CORE TEAM would drive this Project to its destined objective.
Return on Equity (ROE)
Return on Equity (ROE) is the ratio of a bank’s net after-tax income divided by its total equity capital. Return on Equity (ROE) is a measure of the rate of return flowing to the bank’s shareholders. It approximates the net benefit that the stockholders have received from investing their capital in the bank that means placing their funds at risk in the hope of earning a suitable profit.
In the above graph we see that in year 2004 and 2005 the Return On Equity increased by 4 and 5 times respectively than the year 2003 which indicate that AB use more debt than equity. Which raise the return to the shareholder but it also raise risk for the bank.
Return on Assets (ROA)
Return on Assets is the ratio of a Bank’s net after-tax income divided by its total assets. Thus ROA is primarily an indicator of managerial efficiency; it indicates how capably the management of the bank has been converting the institution’s assets into net earnings.
Here In above graph we see that the ROA is also increase almost as same as the ROE it’s happen because of the efficiency of the management level. They are become so efficient in year 2004 and 2005 as we see in the above graph the ROA is increase by almost 6 and 10 times respectively.
Net Interest Margin
The Net Interest Margin is efficiency measures as well as profitability measures, including how well management and staff have been able to keep the growth of revenues (which come primarily from the bank’s loans, investments, and service fees) ahead of rising costs (principally the interest on deposits and money market borrowings and employee salaries and benefits). The net interest margin measures how large a spread between interest revenues and interest costs management has been able to achieve by close control over the bank’s earnings asses and the pursuit of the cheapest sources of funding.
In the above graph we see that the net interest margin is increasing year by year which indicate the efficiency and the competitiveness of the management and the staff of the ABBL. It also indicates that the spread between the income and the cost of ABBL is increasing day by day. It may happen because of bank’s efficiency to provide the loan to its client at a highest but reasonable rate of interest which is competitive but not higher than the other bank and the financial institution which are operate in our country.
Net Non-Interest Margin
The non-interest margin, contrast, measures the amount of non-interest revenues stemming from deposit service changes and other service fees the bank has been able to collect (called fee income) relative to the amount of non-interest costs incurred (including salaries and wages, repair and maintenance costs on bank facilities, and loan-loss expenses). For most banks, the non-interest margin is negative: non-interest costs generally outstrip fee income; through bank fee income has been rising rapidly in recent years as a percentage of all revenues.
For most bank the non-interest margin is negative and that the normal. But in case of ABBL the positive thing is that the spread between the non-interest income and the expenses is become less day by day. In the above figure we see that in year 2002 the non-interest margin was -1.21% but in year 2005 it was only -0.19% which proves that the bank generating more income which is not related to the loan or interest than it did before. And in future it could be in positive figure.
Earnings Per Share
Earnings per share is the ratio of bank’s net – income after tax divided by the total common equity share outstanding which means how much profit will get the shareholder on their owned share. Earning per share is the main indicator of an organization’s wealth. If the EPS is increasing year by year then we can say that the organization is doing well.
Here in the above graph we see that the EPS of ABBL in year 2005 is increased by 10 times than the year 2003 when ABBL went through a bad time. But now they are in a position which is more than the satisfactory level.
Net Profit Margin
The Net Profit Margin (NPM), or the ration of the net income to total revenues, is subject to some degree of management control and direction. It reflects the effectiveness of expense management (cost control) and service pricing policies. It reminds us that banks can increase their earnings and their return to their stockholders by successfully controlling expenses and maximizing revenues.
Where the net profit margin shown the efficiency of the management control and direction we can say that the management of ABBL is doing well in the recent time than the before. If we see the net profit margin in year 2002 and year 2003 it was 2.12% and 1.32% respectively but in last year the net profit margin was 10.30%. Which shows the management’s control over the expense and the strong but reasonable pricing policies of their service, which they offer to their customer?
Assets Utilization (AU)
Assets Utilization (AU) ratio is the product of Total Operating Income divided by the Total Assets that means how much income bank generate by using a single unite of assets. This ratio reflects portfolio management policies, especially the mix and yield on the bank’s assets. By carefully allocating the bank’s assets to the highest-yielding loans and investments while avoiding excessive risk, management can raise the bank’s average yield on its assets.
Assets Utilization ratio shows that how efficiently the bank use their assets to generate revenue. In above graph we see that ABBL develop their assets utilization ration by a contentious basis. Which reveal their strong management team, who made the careful and the effective decision about portfolio investment and by avoiding risk as much as possible.
Equity Multiplier
The Equity Multiplier (EM), or assets-to-equity-capital ratio, is normally the largest, averaging about 15* or larger for most bank. The biggest banks in the industry often operate with multipliers of 20* or more. The multiplier is a direct measure of the bank’s degrees of financial leverage–how many portion of assets must be supported by each amount of equity capital and how much of the bank’s resources therefore must rest on debt. Because equity must absorb losses on the bank’s assets, the larger the multiplier, the more exposed to failure risk the bank is. However, the larger the multiplier, the greater the bank’s potential for high returns for it’s stockholders.
The multiplier ratio tells us that the higher the multiplier is higher the income and also it lead high risk of bank’s failure. In the above graph we see that the multiplier is decreasing by the time which means that the risk of ABBL is decreasing by the time but the income to the shareholder may decrease with the time.
Tax Management Efficiency
Tax Management Efficiency ratio reflects the bank’s use security gains or losses and other tax-management tools (like buying tax-exempted bonds) to minimize its tax exposure.
In the above graph we see that the Tax management efficiency was not in a stable level. Some time it was up and some time it was down so we can’t say that the ABBL manage their tax over their earning very efficiently as their expectation.
Expenses Management Efficiency
Expenses Management Efficiency ratio is the ratio to before-tax income to total revenue as an indicator of how many Taka of revenue survives after operating expenses are removed expense management efficiency measurement is a measure of operating efficiency and expenses control.
If we see to the above graph we could realize that the operating expenses of the ABBL were well managed by the last two years. Where we see that in year 2002 and 2003 the expense management efficiency was only 4.38% and 3.64% respectively but in year 2005 it become 25.83%. That shows a strong management control over the expenses.
Assets Management Efficiency
Assets Management Efficiency ratio is the product of Total Operating Income divided by the Total Assets that means how much income bank generate by using a single unite of assets. This ratio reflects portfolio management policies, especially the mix and yield on the bank’s assets. By carefully allocating the bank’s assets t the highest-yielding loans and investments while avoiding excessive risk, management can raise the bank’s average yield on its assets.
Asset management efficiency is same as the asset utilization. Asset management efficiency shows that how efficiently the bank uses their assets to generate revenue. In above graph we see that ABBL develop their Asset management efficiency by a contentious basis. Which reveal their strong management team, who made the careful and the effective decision about portfolio investment and by avoiding risk as much as possible.
Fund Management Efficiency
The Fund Management Efficiency, or assets-to-equity-capital ratio, or Equity Multiplier is normally the largest, averaging about 15* or larger for most bank. The biggest banks in the industry often operate with multipliers of 20* or more. The multiplier is a direct measure of the bank’s degrees of financial leverage–how many portion of assets must be supported by each amount of equity capital and how much of the bank’s resources therefore must rest on debt. Because equity must absorb losses on the bank’s assets, the larger the multiplier, the more exposed to failure risk the bank is. However, the larger the multiplier, the greater the bank’s potential for high returns for it’s stockholders.
The fund management ratio is same to the Equity Multiplier ratio; the multiplier ratio tells us that the higher the multiplier is higher the income and also it lead high risk of bank’s failure. In the above graph we see that the multiplier is decreasing by the time which means that the risk of ABBL is decreasing by the time but the income to the shareholder also decreasing by the time.
By analyzing the performance of ABBL we see that this bank really doing well last two years. In year 2004 their net profit margin was 6.17% and year 2005 it become 10.30% which shows their strong management efficiency and the strong control over the operating expenses. Now a day’s people want batter product and service at reasonable price. And AB Bank provides that batter product and service at reasonable price which attract more customer loyalty. The ultimate goal of a business organization is to maximize their wealth not the profit, and the indicator of wealth maximization is increase in share price. In case of AB we see that in year 2004 the Earning per Share was 18.19 and in year 2005 it become 31.26 it was almost doubled as compare to the previous year. That influences the investor to invest their money in the AB Bank Limited share because the return on those shares will increase year by year. Existence of an organization depends upon mainly two things one is, Are they generate sufficient amount of profit and another things is the loyalty of customer and the investor regarding that organization. Here we see that the profit of AB Bank Limited become almost doubled in year 2005 than the previous year and the investor will more attractive when they see that the return on share also become doubled in last year. So we can say that, AB Bank Limited has good enough potentials in the money market of Bangladesh.
Product’s of AB Bank Limited
Unsecured Loans
| Product Name | Personal Loan |
| Target Customer | Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants), Businessmen. |
| Purpose | Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture. |
| Loan Amount | Minimum Tk. 25,000.00 Maximum Tk. 5,00,000.00 |
| Charges | Application fee: Tk. 500.00 Processing fee: 1% on the approved loan amount or Tk. 2000.00 whichever is higher |
| Tenor | Min 12 months Max 36 months |
| Rate of Interest | 14.50% p.a. – 17.50% p.a. |
| Security | Hypothecation of the product to be purchased. Two personal guarantees (as per our list of eligible guarantors) |
| Product Name | Auto Loan |
| Target Customer | Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants), Businessmen |
| Purpose | To purchase Brand new vehicle, non-registered reconditioned vehicle |
| Loan Amount | 70% for the brand new car 60% for the reconditioned car but must not exceed BDT 10,00,000.00 |
| Charges | Application fee: Tk. 500.00 Processing fee: 1% on the approved loan amount or Tk. 5000.00 whichever is higher |
| Tenor | For Reconditioned Car: Max 36 months
For Brand new Car: Max 60 months |
| Rate of Interest | 14.50% p.a. – 17.50% p.a. |
| Security | Hypothecation of the vehicle to be purchased. Two personal guarantees (as per our list of eligible guarantors) |
| Product Name | Easy Loan (For Executives) |
| Target Customer | The loan is specially designed for salaried people who are employed in different reputed companies |
| Purpose | Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture, Advance rental payment, Trips abroad, Admission/Education fee of Children etc. |
| Loan Amount | Minimum Tk. 50,000.00, Maximum Tk. 3,00,000.00 |
| Charges | Application fee: Tk. 500.00 Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher |
| Tenor | Min 12 months, Max 36 months |
| Rate of Interest | 16.00% p.a. |
| Security | Letter of confirmation from the employer. One personal guarantee (as per our list of eligible guarantors) |
| Product Name | Gold Grace – Jewellery Loan |
| Target Customer | Both female & male employees may apply viz. employees of reputed Banks & Leasing companies, reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies. Government Employees. Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants). Businessmen with a reliable regular source of income. |
| Purpose | To purchase ornaments/Jewellery for personal use |
| Loan Amount | Minimum Tk. 50,000.00, Maximum Tk. 3,00,000.00 |
| Charges | Application fee: Tk. 500.00, Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher |
| Tenor | Min 12 months, Max 36 months |
| Rate of Interest | 16.00% p.a. |
| Security | Letter of confirmation from the employer. Personal guarantee from the parents and spouse (if married) |
| Product Name | House/Office Furnishing/Renovation Loan |
| Target Customer | Expatriate Bangladeshi nationals who are in business or service holders. Employees of reputed Banks & Leasing companies, reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies. Government Employees. Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants). Reputed and highly respectable Businessmen with a reliable source of income |
| Purpose | House/Office Furnishing/ Renovation, For interior decoration / Titles Stones, Electrical fittings, wooden cabinets / Overall furnishing and all types of House/Office Renovation, purchase/furnishing of apartments etc. |
| Loan Amount | Minimum Tk. 1,00,000.00, Maximum Tk. 10,00,000.00 |
| Charges | Application fee: Tk. 500.00, Processing fee: 1% on the approved loan amount or Tk. 2000.00 whichever is higher |
| Tenor | Min 12 months, Max 48 months |
| Rate of Interest | 16.50% p.a. |
| Security | Title deed of the House/Office to be furnished/renovated along with memorandum of deposit of title deed duly supported by a notarized power of attorney to be kept by the bank as a matter of comfort. Two personal guarantees (as per our list of eligible guarantors). Registered mortgaged of the property if the loan amount is more than Tk. 5.00 lack |
| Product Name | Staff Loan |
| Target Customer | All permanent employees of ABBL |
| Purpose | Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture |
| Loan Amount | According to the debt burden ration and other criteria |
| Charges | Processing fee: 1% on the approved loan amount |
| Tenor | Min 12 months, Max 36 months |
| Rate of Interest | 15.50% p.a. |
| Security | Hypothecation of the product to be purchased |
| Product Name | Education Loan |
| Target Customer | Students Criteria:
• Students of reputed Educational Institutes, such as Public & Private Universities, Medical Colleges & Engineering Institute. • Undergraduate & Post graduate Level • Professionals degrees (Chartered Accountants (CA), Cost & management Accountants (CMA), Marine, MBM, MBA) • Doctorate degree (PhD), FCPS etc. • Occupation: Student • Minimum Age: 17 years • Maximum Age: 40 years • Educational Qualification: Minimum HSC/A-Level Pass. Parents Criteria: Service Holder: • Individuals with ranks equivalent to Senior Assistant Secretary or higher would qualify guarantor • Bank officials (Equivalent to Senior Principal Officer of NCBs, AVP / Branch Manager of Local and Foreign banks) and Department Head of Multinational Company or established Local Corporate. Guarantors must be accepted by the Branch Manager / Head Office. Businessman: • Well reputed and widely respected Self-employed professionals |
| Purpose | To Financially Assist The Parents: Admission/Education Fees, Semester Fees, Study abroad |
| Loan Amount | Minimum Tk. 50,000.00, Maximum Tk. 3,00,000.00 |
| Charges | Application fee: Tk. 500.00, Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher |
| Tenor | Min 12 months, Max 36 months |
| Rate of Interest | 14.50% p.a. – 16.00% p.a. |
| Security | One personal guarantees (as per our list of eligible guarantors) |
Secured Loans
| Product Name | Personal Loan |
| Target Customer | All Clients of ABBL |
| Purpose | To meet personal requirement of fund |
| Loan Amount | Maximum 95% of the present value of the security |
| Charges | Processing fee: Tk. 1000.00 |
| Tenor | Min 12 months, Max 36 months |
| Rate of Interest | 13.50% p.a. – 16.50% p.a. (subject to type of the security). 2% spread must be maintained in case of own bank FDR |
| Security | Lien over FDR, BSP, ICB Unit Certificate, RFCD, NFCD, CD account(s) etc. One personal guarantee in case of third party cash collateral (as per our list of eligible guarantors) |
| Product Name | Personal Overdraft |
| Target Customer | All Clients of ABBL |
| Purpose | To meet personal requirement of fund |
| Loan Amount | Maximum 95% of the present value of the security |
| Charges | Processing fee: Tk. 1000.00 |
| Tenor | Revolving with annual review |
| Rate of Interest | 13.50% p.a. – 16.50% p.a. (subject to type of the security). 2% spread must be maintained in case of own bank FDR |
| Security | Lien over FDR, BSP, ICB Unit Certificate, RFCD, NFCD, CD account(s) etc. One personal guarantee in case of third party cash collateral (as per our list of eligible guarantors) |
At AB Bank we provide complete range of solutions to meet Corporate Customers’ requirement. Our Corporate Banking solutions include a broad spectrum of products and services backed by proven, modern technologies.
Corporate Lending
Our specialist teams offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh. For more information as to how we might best meet your corporate debt needs, please contact us at our Corporate Head Office.
Structured Finance
We have a specialist Structured Finance Team who arrange and underwrite finance solutions including Debt and Equity Syndication for financial sponsors, management teams and corporates. Also we provide corporate advisory services.
We aim to provide tailored financing solutions with a dedicated team who can rapidly respond to client needs.
Following are some of the products and financial tools of Corporate Banking:
- Project Finance
- Working Capital Finance
- Trade Finance
- Cash Management
- Syndicated Finance, both onshore & off-shore
- Equity Finance, both onshore & off-shore
- Corporate Advisory Services
SME Loan
Considering the volume, role and contribution of the SMEs, in the last two decades AB Bank has been patronizing this sector by extending credit facilities of different types and tenor. As of now 54% of the bank’s total loan portfolio is segmented to the SMEs which deserve all out attention in our plans, projections and forecasting.
As such the bank has emphasized on the following issues:
- To provide the best services to the SME sector
- To increase the SME portfolio of ABBL significantly
- To improve the quality of ABBL’s portfolio
SME Sectors in which AB Bank has participated so far:
- Agro machinery
- Poultry
- Animal Feed
- Dairy Product
- Fruit Preservation
- Hotel & Restaurants
- Garments Accessories
- Leather products
- Plastic product
- Furniture : Wooden & Metal
- Ink
- Paint
- Printing & Packaging
- Wire & Cable
- Aluminum
- Cement and Lime Plaster
- Clinics and Hospitals
- Engineering & Scientific Instruments
Large Loan & Project Finance
- In order to cater the demand of client AB Bank has segmented its portfolio in terms of loan size. As per this segmentation any loan over Tk. 10.00 Crore falls under the purview of Large Loan Unit.
- In AB Bank, there is also a separate Project Finance unit who evaluate the business. The unit is entrusted to handle the portfolio in a focused manner. AB Bank is always in fore front to support establishment of new projects of diverse nature which will help to broaden the manufacturing arena vis-à-vis to generate to employment.
- At the moment AB Bank ‘s exposure in Large Loan & Project Finance portfolio is distributed in the following sectors:
| SL | Sector | ABBL Exposure (Limit)
(Fig. in Lac Tk.) |
| 1 | Agro- Business | 12,717.56 |
| 2 | Cement Power, Glass | 38,691.92 |
| 3 | Consumer Products | 21,855.00 |
| 4 | Edible Oil | 36,057.53 |
| 5 | Engineering & Construction | 18,106.42 |
| 6 | Financial Institution | 1,414.70 |
| 7 | Food & Beverage | 27,044.24 |
| 8 | Hotel | 2,505.26 |
| 9 | Health Care | 3,928.62 |
| 10 | Printing & Packaging | 11,867.61 |
| 11 | Real Estate | 10,451.49 |
| 12 | Micro-finance | 5,763.15 |
| 13 | Export | 9,441.63 |
| 14 | RMG & Backward Linkage | 94,826.13 |
| 15 | Ship Breaking | 18,029.20 |
| 16 | Steel | 42,824.97 |
| 17 | Telecom & Computer Accessories | 11,479.89 |
| 18 | Trading | 77,579.89 |
| Total ( including syndicated exposure) | 444,585.21 | |
| Less Syndicated Exposure | 51,560.29 | |
| Total Large Loan & Project Finance portfolio without syndicated exposure | 3930,24.92 |
· Syndication or club financing is a growing concept in Banking Arena of Bangladesh. Syndicated finance diversifies the risk of one bank on a single borrower and increases the quality of loan through consensus or cumulative judgment and monitoring of different banks / financial institutions.
· AB Bank, the first bank in the private sector also took initiative to adapt to this growing concept.
· In 1997, AB Bank for the first time arranged a club financing with Dhaka Bank Ltd to raise Tk. 6700 lack – out of which ABBL financed Tk. 5700 Lac and Dhaka bank financed Tk. 1000 Lac.
· In 1999, AB Bank arranged its second syndicated credit facility with IPDC to raise Tk 3563 Lac.
· Since then AB Bank did not look back.
· Since 1997 to 2007 (till date), AB Bank has raised total Tk. 25989.56 Lac as Lead Arranger. The following banks from time to time have been our partners in these syndications: Dhaka Bank, IPDC, EXIM Bank, Bank Asia, Oriental Bank, NCC Bank, The City Bank, Trust Bank, Bank Asia.
· AB Bank has also participated in different syndications arranged by other Banks, out of which till date 6 (six) syndication has successfully been completed. AB Bank exposure in these completed syndications was Tk. 4700 Lac.
· At the moment AB has participation in 19 (nineteen) syndicated facilities. AB Bank’s exposure in the ongoing syndication is Tk. 51560.29 Lac which is diversified in the following ten sectors:
| SL | Sector | ABBL Participation
(Fig. in Lac Tk.) |
| 1 | Textile | 9,533.57 |
| 2 | Micro-finance | 3,000.00 |
| 3 | Cement | 7,990.00 |
| 4 | Energy & Power | 11,997.00 |
| 5 | Telephone (PSTN) | 5,500.00 |
| 6 | Glass | 900.00 |
| 7 | Sugar | 900.00 |
| 8 | Steel Mills | 9081.72 |
| 9 | Paper | 1158.00 |
| 10 | Chemical | 1,500.00 |
| Total | 51,560.29 |
| Products | Mid Rate | Interest Rate W.E.F
June 16, 2009 |
| 1) Agriculture | 13.00% | 13.00% |
| 2) Large and medium scale industries | 13.00% | 13.00% |
| 3) Small Industries (Term Loan) | 14.75% | 13.25%-16.25% |
| 4) Working Capital | ||
| a) Large and medium scale industries | 13.00% | 13.00% |
| b) Small Industries | 14.50% | 13.00%-16.00% |
| 5) Export | 7.00% | 7.00% |
| 6) Commercial Lending | 13.00% | 13.00% |
| 7) Housing Loans | 13.00% | 13.00% |
| 8) Consumer Credit | 16.00% | 14.50%-17.50% |
| 9) Credit Card | 2.00% per month | 2.00% per month |
| 10) Finance to NBFI’s | 13.00% | 13.00% |
| 11) Others | ||
| i) Cash Collateral – ABBL FDR | 14.00% | 12.50%-15.50% |
| ii) Cash Collateral – Other Banks FDR or WDB | 14.50% | 13.00%-16.00% |
| iii) Special Scheme Loans | 16.00% | 14.50%-17.50% |
Notes:
- For lending against ABBL FDR, the rate is minimum 3.00% above the rate of the instrument subject to minimum 12.50%.
- Exposure under cash collateral of other banks requires clearance from FI & Treasury.
Interest Rates with effect from May 12, 2009
| Products | |
| Savings Deposits | 6.00% |
| STD (General) for minimum Tk 5.00 lack and above | 5.00% |
| STD (Specific) | 7.00% |
| Security Deposit Receipts (SDR) / Call Dep | 3.00% |
| NFCD | Rate as per daily FX rate |
| RFCD (Minimum balance USD 2000 or its equivalent for other currency & min tenor one month) | Rate as per daily FX rate |
| Fixed Deposit (Time Deposits) | |
| 1 (one) Month | |
| 5,00,00,000 & above | 8.00% |
| 3 (three) Months | 9.50% |
| 6 (six) Months | |
| Up to 50,00,000 | 9.00% |
| Above 50,00,000 | 9.50% |
| 1 (one) Year | |
| Up to 50,00,000 | 8.50% |
| 50,00,001 to 1,00,00,000 | 9.00% |
| Above 1,00,00,000 | 9.50% |
| 2 (two) Years | 8.00% |
Facilities offered to NRBs
Opening of Foreign Currency A/C: We open Foreign Currency Account in USD/GBP/EUR/JPY for NRBs. Foreign Currency can be remitted by the Nationals of Bangladesh living Abroad earned by them as wage earners or from other sources. The deposit amount can also be used for remittance to other countries as per their requirement. Nominee of Account holder can also able to operate this Account.
NFCD: We issued Foreign Currency Fixed Term Deposit in USD/GBP/EUR with different tenure. Interest is paid in respective Foreign Currency. Rates of Interest are published in our daily Exchange Rate.
Wage Earners Development Bond: These Bonds can be issued from the balance of the FC account with tenure for five years. Rate of interest is 12% p.a. in BDT.
USD Premium Bond: These Bonds can be issued from the balance of the FC account with tenure for Three years. Rate of interest is 7.5% p.a. in BDT.
USD Investment Bond: These Bonds can be issued from the balance of the FC account with a tenure for Three years. Rate of interest is 6.5% p.a. in USD.
In addition to the above, we also have Drawing Arrangements with 14 (Fourteen) Exchange/Money Transfer Remittance Houses all over the globe to facilitate fast, reliable and hassle-free inward remittance to the expatriate Bangladeshis around the world. We also have special arrangements to credit Beneficiary’s account maintained with us on the same day through our extensive real time on-line network.
List of Exchange / Money Transfer Remittance Houses are as follows:
| Foreign Remittance through Exchange House
For Inward Remittance, AB Bank established extensive drawing arrangement network with Banks and Exchange Companies located in the important countries of the world. |
||
| Name of the Exchange Companies | ||
| U.A.E. Exchange Centre LLC
Post Box # 170 Abu Dhabi United Arab Emirates |
Al Fardan Exchange
Post Pox # 339 Mushrib Street, Doha Qatar |
Oman Exchange Co. Ltd.
Post Box # 26057 13211 Safat Kuwait |
| Modern Exchange Co. LLC
Post Box # 3401 PC 112 Ruwi Sultanate of Oman |
Emirates Bank International
PSJC Beeniyas Road Post Box # 2923, Deira Dubai U.A.E. |
Puroshottam Kanji Exchange Co. LLC
Post Box # 41 Postal Code – 113 Muscat Sultanate of Oman |
| Security Exchange Co. WLL
Post Box # 29760 Safat Kuwait |
Habib Qatar International Finance & Investment Ltd.
Post Box # 1188 Mushirib Street Doha QATAR |
AI-Ansari Exchange Establishment
Head Office Post box-325 Abu Dhabi U.A.E. |
| K.S. Enterprise Ltd.< | ||