Bank Products: Marketing Strategy and Management Thereof in NCCBL
Introduction
Generally by the word “Bank” we can easily understand that the financial institution creaks with money. But there are different types of banks such as; Central bank, commercial bank, Savings banks, Investment banks, Co-operative banks etc. But when we use the term, Bank without any prefix, or qualification, it refers to the commercial banks. Commercial banks are the primary contributors to the economy of a country. So we can say commercial banks are a profit making institution that holds the deposit of individuals & business in checking & savings accounts and then uses these funds to make loans.
Both general public and government are dependent on the services of banks as the financial intermediary. Bank represents a significant and influential sector of business worldwide. Most individuals and organizations make use of banks, either as depositors or borrowers. Banks play a major role in, maintaining confidence in the monetary system through their close relationship with regulatory authorities and governments and the regulations imposed on them by arose governments. As, banks are profit-earning concern; they collect deposit at the lowest possible cost and Provides cost and provide loans and advances at higher cost The differences between two are the profit for the banks.
Banking Sector in Bangladesh –
The liberation war of 1971 begot a country named Bangladesh in the world with distressed financial system and adverse economic condition. As a result, the government had to adopt a development philosophy with an objective to enhance the country’s economic growth. At that time, the government nationalized the banking sector along with other business sectors since the banking activity is a true index of commercial and industrial progress of a country. Although the banking sector was under the dose supervision of the government, it could not achieve the major objective for which it was nationalized, thus, the government in its new industrial policy declared in June 1982 decided to denationalize a large number of public enterprises including the commercial banks.
Later in 1989, numerous reform measures were taken by the government to place public enterprises at par with the private sector units in the matters of finance and infrastructure development. As a result, the privatization process of banking sector was further boosted up. Today, the commercial banking sector of Bangladesh has emerged as a healthy business sector with auspicious contribution in our economy. The commercial banking sector of Bangladesh is now an area of turbulent competition with the participation of a large number of Private Commercial Banks (PCBs).
Domestic banks can be divided into four main groups: Nationalized Commercial Banks (NCBs); Private banks established in the early 1980s; Private banks established in 1995; and new private sector banks established in 1999.
Nationalized Commercial Banks (NCBs)
In general terms; NCBs are large, operationally inefficient and technically insolvent. They are used as vehicles of government directed lending. These banks enjoy an enormous and stable customer deposit base, which provides a cheap source of funding. In addition, most large government related business is routed through these banks.
Private Banks. 1980
Set up to service the sectors not being addressed by the larger NCBs. Not subject to state directed lending but have generally suffered from related lending to directors and their extended families.
Private Banks. 1995
Six new licenses were granted. These are the better managed banks with strong capital base and good asset quality and under a much improved regulatory regime. All the banks clustered in this group have successfully raised capital from secondary market and all the shares are now traded in the stock exchange at premium.
New Private Sector Banks
Ten new banks have been granted licenses over the year 1999. While some bankers complain that the country is over-banked, the more commonly held view, including that of the World Bank, is that there is adequate scope for these banks to survive given currently untapped gaps in the market, fat in existing interest margins (currently circa 5%) and efficiency service level disparities. It is estimated that up to 70% of the Bangladeshi economy remains un-banked. While this appears to imply that the newer banks may move downstream in terms of asset quality but in reality the last two sets of new banks are successfully competing with NCBs (Nationalized Commercial Banks) and foreign banks on the top end market segment.
Year 2006
In 2006, the banking sector especially the private sector banks made meaningful progress and growth in terms of significant market share of deposits and advances through improved customer service, introduction of new products and switching over to online banking keeping pace with the globalization process. The volume of defaulted loans in the banking system rose by 34% to stand at Tk. 234,650 million in June 2006 from Tk. 175,090 million in December 2005. While the total increase in default loans is Tk. 59,560 million, nationalized Sonali Bank alone witnessed an increase of Tk. 45,960 million and among the private banks the highest increase of Tk. 4,180 million was witnessed by The Oriental Bank Limited, latest statistics of the Bangladesh Bank show.
Bankers attributed the rise, in the case of Sonali Bank, to Bangladesh Petroleum Corporation’s (BPC) failure to pay back its Tk. 43,000 million loan, which was borrowed to import fuel. But the situation in Foreign Commercial Banks (FCBs) is better since the amount of their defaulted loans decreased to Tk. 410 million (January to June of 2006). Bangladesh Bank has been playing an important role for keeping discipline and dynamism in the banking sector of the country. Due to stringent supervision and control exercised by the Central Bank, there had been a continuous progress in the reduction of percentage of classified loans in the banking sector.
About Marketing –
Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is “meeting needs profitably”. The goal of marketing is to attract new customer by promising superior value and to keep and grow current customers by delivering satisfaction.
The American Marketing Association offers the following formal definition: “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customers’ relationships in ways that benefit the organization and its stake holders Marketing means managing markets to bring about profitable customer relationships. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. However, creating profitable customer relationships takes work. Sellers must search for buyers, identify their needs, design good marketing offers, set prices for them, promote them, and store and deliver them. Activities such as product development, research, communication, distribution, pricing, and service are core marketing activities.
Broadly defined, marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others. In a narrower business context, marketing involves building profitable, value-laden exchange relationships with customers. Hence, we define marketing as the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Marketing Mix –
One of the most basic concepts in marketing is the marketing mix, defined as the elements an organization controls that can be used to satisfy of communicate with customers. Broadly defined, marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. The marketing mix is composed of the four Ps: Product, Price, Place (distribution), and Promotion. These elements appear as core decision variables in any marketing plan. Careful management of product, price, place, and promotion will be clearly also be essential to the successful marketing of services.
Product – Product is the first and most important element of the marketing mix. A product is anything that can be offered to a market to satisfy a want or need. Product means the goods-and-services combination the company offers to the target market.
Price – Price is the amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service. Historically price has been the major factor affecting buyer choice.
Place– Place includes company activities that make the product available to target Consumers.
Promotion – Promotion means activities that communicate the merits of the
Product and persuade target customers to buy it.
The four P component of the Marketing Mix
Marketing Strategy –
Marketing strategy means the marketing logic by which the business unit hopes to achieve its marketing objectives. Through market segmentation, targeting, and positioning, the company decides which customers it will serve and how. It identifies the total market, then divided it into smaller segments, select the most promising segments, and focuses on serving and satisfying customers in these segments.
Guided by marketing strategy, the company designs a marketing mix made up of factors under its control – product, price, place, and promotion. To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.
Customer-Centered Marketing Strategy –
To succeed in today’s competitive marketplace, companies need to be customer centered. They must win customers from competitors, then keep and grow them by delivering greater value. But before it can satisfy consumers, a company must first understand their needs and wants. Companies know that they cannot profitably serve all consumers in a given market – at least not all consumers in the same way. There are too many different kinds of consumers with too many different kinds of needs. And most companies are in a position to serve some segments better than others. Thus, each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments this process involves three steps: market segmentation, target marketing, and market positioning.
Market Segmentation –
The market consists of many types of consumers, products, and needs. The marketer has to determine which segments offer the best opportunity for achieving company objectives. Consumers can be grouped and served in various ways based on geographic, demographic, psychographic and behavioral factors. The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing programs is called market segmentation. A market segment consists of consumers who respond in a similar to a given set of marketing efforts. Companies are wise to focus their efforts on meeting the distinct needs of individual market segments.
Target Marketing –
After a company had defined market segments, it can enter one or many market segments of a given market. Target marketing involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time.
Market Positioning –
After a company has decided which market segments to enter, it must decide what positions it wants to occupy in those segments. A product’s position is the place the product occupies relative to competitors in consumers’ minds. Marketers want to develop unique market positions for their products. If a product is perceived to be exactly like others on the market, consumers would have no reason to buy it. Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Thus, marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets.
Developing the Marketing Mix –
Once the company has decided on its overall marketing strategy, it is ready to begin planning the details of the marketing mix, one of the major concepts in modem marketing. The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. Marketing mix decisions must be made for influencing the trade channels as well as the final customers. The following figure shows the company preparing an offering mix of products, services, and prices, and utilizing a communications mix of advertising, sales promotion, events, and experiences, public relations, direct marketing, and personal selling to reach the trade channels and the target customers.
What is Service?
In simple sense, services are deeds, processes and performances. For example, IBM offers repair services for its equipment, consulting services for IT, e-commerce application, web design services and training services for mass people. All these are deeds, processes and performances. Similarly, the core offerings of hospitals, hotels, banks and utilities comprise primarily deeds and actions performed for customers. Broadly defined, a service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.
· Compatible with this simple definition, services include economic activities,
· Whose output is not a physical product,
· Are generally consumed at the time they are produced,
· Provide added value in the form of amusement, comfort and convenience,
· And are essentially intangible concerns of the first purchaser.
The government sector, with its courts, employment services, hospitals, loan agencies, military services, police and fire departments, postal service, regulatory agencies, and schools, is in the service business. The private non profit sector, with its museums, charities, churches, colleges, foundations, and hospitals is in the service business. A good part of business sector, with its airlines, banks, hotels, insurance companies, law firms, management consulting firms, medical practices, motion picture companies, plumbing repair companies and real estate firms, is in the service business. Many workers in the manufacturing sector, such as computer operators, accountants, and legal staff, are really service providers. In fact, they make up a “service factory” providing services to the “goods factory”. And those in the retail sector, such as cashiers, clerks, salespeople, and customer service representatives, are also providing a service.
Distinctive Characteristics of Service:
Services have four distinctive characteristics that greatly affect the design of marketing programs: intangibility, inseparability, variability, and perish ability.
Intangibility –
The most basic distinguishing characteristic of services is intangibility. Because services are performances or actions rather than objects, they cannot be seen, tasted, felt, heard, or smelled in the same manner that we can sense tangible goods.
Inseparability –
Services are typically produced and consumed simultaneously. This is not true of physical goods, which are manufactured, put into inventory, distributed through multiple resellers, and consumed later. If a person renders the service, then the provider is part of the service. Because the client is also present as the service is produced, provider-client interaction is a special feature of services marketing.
Variability –
Service depend on who provides them and when and where they are provided, they are highly variable. Some doctors have an excellent bedside manner; others are less patient with their patients. Some surgeons are very successful in performing a certain operation; others are not. Service buyers are aware of this variability and often talk to others before selecting a service provider.
Perish ability –
Perish ability refers to the fact that services cannot be saved, stored, resold, or returned. A seat on an airplane or in a restaurant, an hour of a lawyer’s time, or telephone line capacity not used cannot be reclaimed and used or resold at a later time. Perish ability is not a problem when demand is steady. But when demand fluctuates, service firms have problems.
Marketing Strategies for Service firms –
Just like manufacturing businesses, good service firms’ use marketing to position them strongly in chosen target markets. Service firms establish their positions through traditional marketing mix activities.
However, because services differ from tangible products, they often require additional marketing approaches. In a product business, products are fairly standardized and can sit on shelves waiting for customers. But in a service business, the customer and front-line service employees interact to create service. Thus, service providers must interact effectively with customers to create superior value during service encounters. Effective interaction, in turn, depends on the skills o front-line service employees and on the support processes backing these employees.
Successful service companies focus their attention on both their customers and their employees. They understand the service-profit chain, which links service firms’ profits with employees and customer satisfaction. This chain consists of five links:
Internal service quality: Superior employees’ selection and training, a quality work environment, and strong support for those dealing with customer.
Satisfied and productive service employees: More satisfied, loyal, and hardworking employees.
Greater service value: More effective and efficient customer value creation and service delivery.
Satisfied and loyal customer: Satisfied customers who remain loyal, repeat purchase, and refer other customers.
Healthy service profits and growth: Superior service firm performance. Here fore, reaching service profits and growth goals begins with taking care of those who take care of customers. The idea is that happy employees will unleash their enthusiasm on customers, creating even greater customer satisfaction. Thus, service marketing requires more than just traditional external marketing using four Ps. Service marketing also requires internal marketing and interactive marketing.
External marketing describes the normal work of preparing, pricing, distribution, and promoting the service to customers.
Internal marketing describes training and motivating employees to serve customers well. Internal marketing means that the service firm must effectively train and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction. Marketer must get everyone in the organization to be customer-centered.
Interactive marketing describes the employees’ skill in serving the client. Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. In product marketing, product quality often depends little on how the product is obtained. But in service marketing, service quality depends on both the service deliverer and the quality of the delivery. Clients judge service not only by its technical quality, but also by its functional quality. Therefore, service marketers have to master interactive marketing skills
Expanded Marketing Mix for Service –
In addition to traditional four Ps, Service marketer use additional variables which includes People, Physical evidence and Process.
People –
All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely the firm’s personnel, the customer, and other customers in the service environment. The employees participating in the delivery of a service provide cues to the customer regarding the nature of the service. Their dress appearance and their behavior influence the customer’s perceptions of the service. In many service situations, customers themselves can also influence service delivery, thus affecting service quality and their own satisfaction. Customers not only influence their own service outcomes, but also they can influence other customers as well. In a theater, or in a classroom, customers can influence the quality of service received • by others – either enhancing or detracting from other customers’ experiences.
Physical Evidence –
The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. The physical evidence of service includes all the tangible representations of the service such as brochures, letterhead, business cards, report formats, signage, and equipment. In some cases, it includes the physical facility where the service is offered.
Process-
The actual procedures, mechanisms, and flow of activities by which the service is delivered the service delivery and operating system. The actual delivery steps that the customer experiences, or the operational flow of the service, also give customers evidence on which to judge the service. Some services are very complex, requiring the customer to follow a complicated and extensive series of actions to complete the process.
ORGANIZATIONAL OVERVIEW
Organizational Overview:
Historical Background of NCC Bank –
National Credit and Commerce Bank Limited (NCCBL) bears a unique history of its own. National Credit and Commerce Bank Limited is one of the second generation domestic private banks in Bangladesh after the war of the independence. The organization started its journey in the financial sector of the country as an investment company back in 1985. It is a scheduled Bank under private sector established under the ambit of Bank Company Act, 1991 and incorporated as Public Limited Company Act, 1994 on 17th May 1993. Prior to conversion into a scheduled commercial bank, National Credit Limited (NCL) was incorporated as public limited Investment Company in Bangladesh on 18th November 1985. It made its journey with a modest beginning on 25th November 1985 at its registered office and first branch at 7-8, Motijheel Commercial Area, Dhaka-1000.
The aim of the company was to mobilize resources from within and invest them in such way so as to develop country’s Industrial and Trade Sector and playing a catalyst role in the formation of capital market as well. Its membership with the bourse helped the company to a great extent in this regard. The company operated up to 1992 with 16 branches and thereafter with the permission of the Central Bank converted in to a full- fledged scheduled private commercial bank in May 1993 with paid up capital Tk.390 million to serve the nation from a broader platform.
National Credit Limited (NCL) made a careful journey and maintained its successive growth for few years with its qualified professional management under most unpredictable, unregulated, uncertainties and limitations. Having started its operations as a commercial bank in 1993, recovering from some primary difficulties, National Credit and Commerce Bank Limited (NCCBL) has now emerged as a major player in the financial sector. Listed in both the Dhaka and Chittagong bourses since late 1999 with an IPO that raised the paid-up capital of the bank to Tk. 39 core.
Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the banking system is very vital because the capital market is little developed here. As the banks are still the major sources of credit and exercise great influence on the financial system, it is extremely important that the country’s banking systems should be in good health in the interest of investment activities, meeting the needs of all kinds of finance and related matters. Over the years, National Credit and Commerce Bank Limited has built itself as one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in the extending the role of the private sector of the economy. During last 15 years of its operation NCCBL has acquired commendable reputation by providing sincere personalized service to its customers in a technology-based environment. The Bank has set up a new standard in financing in the Industrial, Trade and Foreign exchange business. Its various deposit and credit products have also attracted the clients both corporate and individuals who feel comfort in doing business with the Bank. The bank has a strong branch network nation wide with 63 branches.
Vision of the Bank –
- To be in thee forefront of national development by providing all the customers inspirational strength, dependable support and the most comprehensive range of business solutions, through our team of professionals who work passionately to be outstanding in everything we do.
- To become the best bank of the land in respect of service, profitability and strength.
Mission of the Bank –
- Anticipating business solutions required by all our customers every where and innovatively supplying them beyond expectation
- Setting industry benchmarks of world class standard in delivering customer value through our comprehensive product range, customer service and all our activities
- Building an exciting team-based working environment that will attract, develop and retain employees of exceptional ability who help celebrate the success of our business, of our customers and of national development
- Maintaining the highest ethical standards and a community responsibility worthy of a leading corporate citizen
- Continuously improving productivity and profitability, and thereby enhancing shareholder value
- To mobilize resources from within to contribute to development and growth of the country and also to play a catalyst role in the formation of capital market.
Objective of the Bank –
The main objective of National Credit and Commerce Bank is to maximize profit through customer satisfaction, which very much reflects the idea of any type service oriented business. National Credit and Commerce Bank has been ensuring profit by providing best and improved service along with other corporate objectives mentioned below:
- To provide excellent customer service to its clients, so they choose National Credit and Commerce Bank first.
- To carry on the business deals in foreign exchange including buying and selling of foreign exchange, dealing in foreign currency notes, granting and issuing letter of credit, travelers check, circular notes and negotiating of export documents and all other matters related to the foreign exchange.
- Ensure high return on investment and with different service products.
- To play a significant role in the improvement of the economic condition of this country.
- Make profitable investment, disciplined growth strategy and growth in annual profit margin.
- To create new opportunities for its clients.
- To give customized services and maintains harmonious banker-client relationship.
- To contribute towards formation capital, growth of savings & investment in trade, commerce & industrial sectors.
- To remain as the market leader through diversification of the business and automation of the banking operations.
- Create and maintain a congenial environment so that the people will be proud and eager to work with National Credit and Commerce Bank.
- To create a fully integrated fin
- To create Employment opportunity for contribution to the community.
- To build up a strong and enduring organization which employs good business practices and deliver better service of the highest quality.
- To share a significant portion of the banking sector’s by utilizing available manpower and also state of the art technology for maximizing the shareholders wealth.
Types of Business –
NCCBL was licensed as a scheduled bank. It is engaged in pure commercial banking and providing services to all types of customers ranging from small and medium enterprises to large business organizations. It is working for the economic welfare by transferring funds from the surplus economic unit to those who are in deficit.
Departments of the Bank –
- General Banking Department
- Credit Department (Loans & Advance)
- Foreign Exchange Department
Strategic Business Units of Head Office-
Credit Division –
The Credit Division is one of the most essential and valuable divisions of every commercial banks. The Credit Division of the bank deals with issues regarding corporate finance, general credit, special schemes such as House Building Loan (HBL) and Consumer Credit Scheme (CGS) etc.
Audit Inspection Recovery Distribution –
Although the loan Administration Division is not at per with the Credit Division of the bank in terms of human resource, the performance of the bank relies heavily on this division. It is responsible for credit monitoring, documentation, distribution L.D.O’s (Loans, Discounts and Overdrafts), preparing MSOCF (Monthly statement of outstanding credit facilities) and dealing with TR (Trust Receipt) etc.
Central Account Division –
This division monitors several important functions of banking operations performed in different branches across the country. It deals with accounts, financial planning, budget and monitoring, preparation of returns and statement, reconciliation, maintenance of PF (Provident Fund), gratuity and superannuating fund, local treasury etc.
Human Resource Division –
The necessary of having an efficient Human Resource Division is one of the unique requirements for the success of any business organization. National Credit and Commerce Bank Limited unlike other commercial banks has a proficient Human Resource Division that deals with recruitment and manpower planning, performance evaluation, disciplinary actions, promotion, cadre charge, employee service rules and benefits, training and development. An executive Vice President leads this division with the assistance of a Vice President
Establishment Division –
Logistic and General Services Division is considered as the centre for providing necessary supporting services to other department as will as the employee. The function of this division includes providing utility services, maintenance of premises, and purchase of printing and general stationery, dispatch and transport pool. A Senior Vice President monitors this division.
International Division –
The role of the International Division is very vital to providing various banking service to the clients. This division also maintains the mutual relationship with many corresponding banks on several issues such as agency and credit line arrangement, reconciliation, authorized signature control, TKC (Test key control), issuance of power of attorney, fund management and treasury operations (foreign) etc.
Information Technology Division –
It is very significant to adapt with the ongoing information technology revolution to provide faster services to the clients. The Information Technology Division supervises the overall computerization of the banking operations and networking, provides system support, deals with data processing and data entry, procures and maintain hardware, maintain and develop software required by the bank to facilitate and support the day to day operations.
Card Division –
The core functions of the Card Division include dealing with issues regarding debit card, ATM card, and customer and vendors management. A first Vice President heads this division.
Marketing and Branch Division –
This division is expected to deal with issues regarding marketing of asset and liability products, branch expansion etc. this division involves introducing new financial products. It also deals with renovation of new branches and location of new branches.
Training Division –
The main objective of this division is to make the employees efficient. Usually this division offers training to their employee time to time. This is helpful to the employee to do their job efficiently and effectively.
Treasury Division –
The key responsibility of this division is to utilize its fund to various profitable businesses. Usually financial organization has huge capital and they invest these capitals in various business.
Public Relation Division –
The main objective of the public relation department is to make a bridge within the organization and outsiders. This division directly deals with general public.
Board Division –
This division deals with board of directors of the organization. Usually when the board emitting held where it will held and other activities are done by this department.
Board of Directors
| YakubAliChairman,
Board of Directors |
Md.HarunurRashidVice Chairman,
Board of Directors |
S.M. Abu MohsinChairman, Executive Committee of the Board |
| Principal M. Wazhiullah BhuiyanChairman,
Audit Committee of the Board |
Tofazzal HossainDirector | A.S.M. Main Uddin MonemDirector |
| Nurul Islam
Director |
Md. Abdul AwalDirector | Amjadul Ferdous ChowdhuryDirector |
| Masuda BegumDirector | Abdus SalamDirector | Mrs Yasmin Kamal Khan |
| Mahbubul Alam TaraDirector | Mir Zahir HossainDirector | Ainul KabirDirector |
| Khondkar Zakaria MahmudDirector | Md. ShahjahanDirector | Mostafizur RahmanDirector |
| Mohammad AliDirector | FakhrulAnwarDirector | Alhaj Md. Nurun NewazDirector |
| Md. Humayun KabirDirector | Din M. RanaDirector | Md. Abul BasharDirector |
| Khairul Alam ChakladerDirector | Md. MoinuddinDirector | Mohammed Nurul AminManaging Director & CEO |
Performance of the Bank:
Performance » At a Glance
| 2002 | 2003 | 2004 | 2005 | 2006 | |
| Authorized Capital | 750.00 | 750.00 | 750.00 | 2,500.00 | 2,500.00 |
| Paid up Capital | 480.48 | 552.55 | 607.81 | 975.04 | 1,201.79 |
| Reserve fund and other Reserve | 388.01 | 510.73 | 761.18 | 884.90 | 1,215.58 |
| Equity fund | 1,037.73 | 1,063.28 | 1,069.23 | 1,859.94 | 2,417.37 |
| Deposits | 16,062.35 | 14,673.42 | 16,069.23 | 21,478.22 | 28,147.34 |
| Loans and Advances | 13,147.72 | 12,850.85 | 15,211.15 | 20,533.13 | 24,678.36 |
| Investment | 2,909.15 | 2,966.02 | 4,385.23 | 3,010.45 | 3,552.08 |
| Import Business | 13,579.50 | 13,089.94 | 13,274.08 | 16,296.30 | 17,646.80 |
| Export Business | 4,559.00 | 4,967.33 | 5,771.65 | 7,776.30 | 8,557.00 |
| Operating Income | 2,050.15 | 2,262.86 | 2,283.37 | 2,932.00 | 3,913.19 |
| Operating Expenses | 1,452.65 | 1,637.92 | 1,562.88 | 1,913.66 | 2,645.62 |
| Operating Profit | 597.50 | 624.94 | 720.49 | 1,018.34 | 1,267.57 |
| Profit before Tax | 385.38 | 334.60 | 445.50 | 687.60 | 1,056.51 |
| Profit after Tax | 213.68 | 79.12 | 285.16 | 352.08 | 479.22 |
| Retained Profit | 1.41 | 0.54 | 14.28 | 10.31 | 7.83 |
| Total Assets (excluding contra) | 18,685.19 | 17,439.93 | 21,469.02 | 26,114.13 | 32,615.01 |
| Fixed Assets | 267.76 | 300.41 | 297.22 | 308.14 | 353.71 |
| Number of Branches | 31 | 32 | 36 | 41 | 48 |
| Number of Employees | 857 | 896 | 925 | 1,000 | 1,118 |
| Earnings per Share | 44.47 | 30.99 | 46.91 | 36.11 | 39.88 |
| Dividend: Cash (%) | – | 10.00 | – | 10.00 | 10.00 |
| Bonus (%) | 15.00 | 10.00 | 30.00 | 10.00 | 12.50 |
| Return on Equity (ROE) (%) | 20.59 | 16.10 | 20.83 | 18.93 | 19.82 |
| Return on Assets (ROA) (%) | 1.14 | 0.95 | 1.33 | 1.35 | 1.63 |
| Capital Adequacy Ratio | 8.01 | 9.01 | 9.05 | 9.02 | 9.78 |
| Nonperforming Loans as % of Total Advances | 9.39 | 9.75 | 7.87 | 4.82 | 4.95 |
| Volume of Non-performing Loans | 1,234.14 | 1,253.35 | 1,188.40 | 981.54 | 1,212.26 |
| Amount of provision against Classified Loans | 633.75 | 733.86 | 650.06 | 405.75 | 523.58 |
| Amount of provision against Unclassified Loans | 118.34 | 118.34 | 138.90 | 202.14 | 282.09 |
| Advance/Deposit Ratio (%) | 81.85% | 87.58% | 94.66% | 95.60% | 87.68% |
Human Resources Policy:
Quality Human Resources are the prerequisite for effective implementation of long & short-term plan of any profit of service oriented organization. This is truer for Banks and Financial Institutions. The success of the financial services industry is dependent on experienced human resources. In Bangladesh a large number of private commercial banks are dependent on few banking professionals at the top tier. As a result, there is a large turnover of professionals within the sector. Ensuring recruitment of quality manpower is of utmost importance as service solely depends on its works force. It is also very important to motivate the employees to keep themselves updated to the changing environs of the sector. The Management of the NCC Bank recognizes this and accordingly has taken befitting steps to this effect. However, the employee turnover in the NCCBL is satisfactory.
The NCCBL follows a structured service rules and compensation package. The HRM Software designed by its IT Division is now in the implementation. The bank has launched benefits for the employees like gratuity, contributory provident fund, superannuation fund etc as long-term benefits. The NCCBL provides training facilities to its existing and new staff through its training institute. Training Institute is as usual engaged in imparting training and organizing workshops/seminars covering current and burning issues for the benefit of officers of various levels. NCC Bank sends its officers to Bangladesh Institute of Bank Management and Bangladesh Bank for training and participating in various workshops on diverse banking issues. Moreover, the bank sends its executives abroad for attending training, workshops and seminars. The number of Executives & Officers as on 31st December, 2006 was 847 against 741 on 31st December, 2005.
Managing Core Risks in Bank:
As per guidelines and prudential guidelines of Bangladesh Bank, appropriate measures have been taken to manage core risks in 6 (six) major areas of Banking operation as identified in the said guidelines namely, Credit Risk, Foreign Exchange Risk, Asset Liability Management Risk, Prevention of Money Laundering, Internal control & Compliance and Information Technology Risk. Bank has a separate cell to look after the progress of implementation of Core Risk Management. Besides, various Committees namely, Management Committee, ALMCO, CCU, AML, MANCOM and other regulatory committees ensure smooth running of the day to day functions as well as compliance of provisions of various related Laws & Regulations.
Audit and Inspection:
Under Internal Control & Compliance Division the Bank has separate Audit & Inspection Unit engaged in identifying lapses and irregularities in the field level and also to find corrective measures to be taken against those. This Unit conducts Audit and Inspection of the Branches both on regular and surprise basis under specific guidelines.
Information Technology:
Bank put due importance to utilization of technology- based service to the customers. In line with this, IT Division of the Bank is engaged in designing various Software to facilitate services. Through this Division, a number of Branches have already been brought under On-Line Banking and some other Branches will also be brought under this umbrella soon.
Corporate Social Responsibility (CSR):
NCCBL recognize that banks are not mere profit earning institutions rather they have great responsibility towards the society in which they are operating. NCC Bank is aware of its responsibility to the society. With a view to discharging its responsibilities to the society, Bank has taken various steps which are as under.
• With a view to contributing for the well being of the society the Board of Directors of the bank established NCC Bank Foundation. The foundation has already started operating in various social development activities. Recently, under the banner of the foundation, a grand reception was accorded to language veteran Mr. Abdul Matin and distributed books to different educational institutions.
• Donation has been made to Cchayanat to help construction works of “Cchayanat Bhaban”.
• The bank always tries to assist the destitute to the society with necessary help with Board’s approval.
• The bank organizes seminars on vital socio-economic issues to find future line of action. Sponsorship of different sporting events is also being undertaken.
• They are considering awarding scholarship to the talented but distressed students and granting assistance to the off-springs of their supportive staff.
PRODUCT AND SERVICE MIX
Products and Services Mix –
Deposit Products –
The money deposited with the bank is not held by him in trust but as his debt to the depositors and the relationship that exists between the banker and the depositor is strictly that of debtor and creditor. The banker becomes the owner of the money and is free to utilize the same in the same in any way to he chooses and is bound at the place where the deposits are maintained, to make repayment there of by an equal amount on demand, at notice or at the end of the specified period with or without interest depending on the nature of the deposits. It refers to those services through which the bank earns by allocating funds to its clients.
The current deposit services of the Bank include:
Current Account –
National Credit and Commerce Bank Limited opens current accounts for its clients to facilitate their day-to-day operations. The amount deposited in the current account can be withdrawn at any time. No interest is given on the current account. In certain cases, however, interest is available at an agreed rate where withdrawals are subject to a written notice for a specified period. The minimum balance requirement for this account is TK. 1000/- and TK. 250/- is deducted from the account in case of closing the current account.
Savings Account –
The Bank provides savings account services for the ease of its clients. It offers both personal and corporate Savings Account to its clients in every branch. The current rate on the deposit amount is (5%) and the minimum balance requirement is TK. 5000. The bank requires no other service charges in opening this type of account. The closing charge for this account is TK/250/-
Short Term Deposit –
Any businessman, firm, limited companies, local bodies, corporate bodies etc. can open a Short Term Deposit A/c with NCC Bank Ltd. Short Term Deposit is 100% time deposit and account holder can withdraw his/their deposits with prior notice to the bank. For which STD A/c called Special Notice Deposit A/c. It is also an interest bearing depository service. The current rate for short-term deposit is 4% per annum. This a fund generating service for the Bank with lower cost compared to others.
Fixed Deposit –
individual person, businessman, firm, limited companies, local bodies, corporate bodies etc. can open a Fixed Deposit A/c with NCC Bank Ltd. Fixed Deposit A/c is 100% time deposit and account holder can withdraw his/their deposits after maturity of the Fixed Deposit. However, depositor of Fixed Deposit can withdraw his/their deposit before maturity.
Special Deposit Scheme –
Any individual person, businessman, firm, limited companies, local bodies, corporation, corporate bodies etc. can open a Special Deposit Scheme A/c with NCC Bank Ltd. Special Deposit Scheme A/c is a term deposit of 3 (three) years against with payment of interest is payable on monthly basis. Special deposit is 100% term deposit and account holder can withdraw his/their deposits (Principal amount) after expiry of maturity of deposit.
Premium Term Deposit –
Any individual, corporate bodies, trustees of provident/benevolent fund etc. can open Premium Term Deposit A/c with NCC Bank Ltd for Tk. 10.00 lac and above but multiple of Tk. 10.00 Lac. Premium Term Deposit A/c is a term deposit of 2 (two) years against with 1% higher interest than existing interest on Fixed deposit is payable. Premium Term Deposit is 100% term deposit and account holder can withdraw his/their deposits (Principal with interest) after expiry of maturity of deposit.
Instant Earning Term Deposit –
Any individuals, retired personnel, housewives, widow and wage earners can open Instant Earning Term Deposit A/c with NCC Bank Ltd. for Tk. 1.00 lac and above but multiple of Tk. 1.00 lac. Instant Earning Term Deposit A/c is a term deposit of 1 (one) year against with 1% lower interest than existing interest on Fixed deposit for one year is payable instantly at the time of opening account. Instant Earning Term Deposit is 100% term deposit and account holder can withdraw his/their deposits (Principal amount) after expiry of one year.
Wage Earners Welfare Deposit Pension Scheme (WEWDPS) –
Any Bangladeshi expatriate can open WEWDPS A/c with NCC Bank Ltd. for tenure of 5 or 10 years with monthly deposit of Tk. 3,800.00 or Tk. 6,350.00 or Tk. 12700.00 which is to be deposited through foreign currency remittance from abroad. WEWDPS A/c is a term deposit of 5/10 years and also 100% term deposit in type. WEWDPS A/c holder can withdraw his/their deposits (Principal with interest) after expiry of maturity of deposit as per prescribe scale.
Call Deposits (Money at call) –
Sometimes the banker secures funds from the money markets usually from other bankers against receipts to meet his purely temporary shortage of funds. These debts are repayable immediately at call. When the money market is right such deposits attract higher rate of interest and then to be treated as banker’s borrowings as call loans.
Joint Account –
A joint account is a bank account conducted in the name of two or more persons, who are neither partners nor administrators nor executors nor trustees. It is necessary that before opening an account in joint names, signatures of all should be obtained with clear instructions as to who will operate the account or to whom money will be payable in case of death of any one or more of the joint account holders, in case, written authority signed by it is not taken, the money is jointly payable to the survivors and legal representatives of the deceased. In case of insanity of any one of the parties, original mandate given by them is revoked. In case ail sign checks jointly and any one dies or the check is signed by a person or persons and who had been delegated the authority, the authority to operate is revoked.
Opening of Account by a Proprietorship Business –
If the account is opened in the name of a firm the proprietor should sign the account opening form and furnish his specimen signature showing his representative character as a proprietor or sole proprietor. ]n this case the appropriate trade license and TIN (Tax Identification Number) and VAT (Value Added Tax) Reg. No. must be submitted.
Opening of Account by a Partnership Firm –
A partnership is the creation of a contact between persons and it is by virtue of this contract that they associate themselves with a business. Partnership as defined in section 4 of the Partnership Act. 1932 is “The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
The essence of a partnership is the sharing of profit; it is a compulsory element though not a conclusive evidence. The persons who have entered into partnership are individually called as “Partner” and collectively a ‘Firm’ and the name under which they trade are called the ‘Firm Name’. The three essential ingredients of a partnership are as follows:
There must be an agreement (written, verbal, or implied) between the persons concerned.
The agreement must be to share the profit of a business. (Business includes every occupation, trade and profession)
The business must be carried on by all or by any of the person’s concerned acting for all.
Public Limited Company –
A company is legal entity registered under the companies act, 1994. Before opening of account of a joint stock limited by shares account the banker must examining the following documents:
Registration certificate from the register of joint stock companies-
· Certificate of Incorporation.
· Certificate of commencement of business.
· Up-to-date memorandum of association.
· Articles of association.
· Copies of annual accounts.
Copies of board resolution, which contains the followings
Certified copies of these documents and the attested copy of the resolution of the board of directors appointing him as its banker and naming the official or officials authorized to open and operate to on the account, to make, to draw, accept or endorse negotiable instruments singly and joint.
Non-Resident Account –
The nature of non account is the same as that of a resident’s account with the difference that its opening and the operation thereon are subjected to the formalities and restrictions imposed by exchange control from time to time.
Special Savings Deposits Scheme –
The clients can invest in different fixed deposit rates for different maturities. The bank encourages its clients to invest in fixed deposit rate as it is one of the effective means of acquiring large amount of deposit from people.
| Nature of Deposits | Rate of Interest |
| Fixed deposit or Bearer Certificates for 3 months | 8.00% |
| Fixed deposit or Bearer Certificates for 6 months | 8.25% |
| Fixed deposit or Bearer Certificates for 1 Year | 8.50% |
| Fixed deposit or Bearer Certificates for 2 years | 9.00% |
• Like ‘Deposit Pension Scheme’ this scheme includes the following features for the convenience of clients.
• The monthly installments of Tk. 500 to Tk. 2500 may be deposited every month during the entire period of scheme.
• The duration of the scheme is 5 years or 10 years.
The depositors will be paid a specified as per following table:
| Monthly Installment (Tk.) | Duration | |
| 5 Years
@12.10% |
10 Years
@12.10% |
|
| 1000 | 81,000.00 | 221,500.00< |