40 YEARS OF INDELIBLE
IMPRESSIONS &
EXPRESSIONS!
40 YEARS OF ENDURING
If ever there was a measure of
If ever there was a measure of
what would it be?
what would it be?
J O Y
F R E E D O M
If ever there was a measure of
If ever there was a measure of
what would it be?
what would it be?
S U C C E S S
SECURITY
If ever there was a measure of
L E G A C Y
what would it be?
Scan this QR code
with your mobile
device for quick
access to this
Annual Report.
CITY
BANKING!
At City Bank, we recognise our role as custodians of emotions, of
IMPRESSIONS and EXPRESSIONS
Our banking service fulfills hope, aspirations, dreams and desires, as our
customers bring their ideas to life, express love and affection for a dear
one, celebrate life, and create moments they will treasure forever.
Truly, we create indelible IMPRESSIONS reflected in the enduring
EXPRESSIONS of our customers!
2
Annual Report 2022
Preface
40 YEARS OF MAKING AN
IMPRESSIONS
40 YEARS OF DELIGHTFUL
EXPRESSIONS!
Four decades of making a difference in the lives of generations of customers!
Rokeya’s father opened a City Bank savings account under her name when she was just 18 years old to instill
in her the value of saving. She and her father would visit the City Bank branch closest to their home so that
she could learn how to put money into her account. Rokeya has been a loyal City Bank customer for decades
now, and she just introduced her 19-year-old grandson, Rahat, to the Bank’s new digital product, Citytouch.
Or when Mahfuza, a homemaker, began making cakes in her backyard as a pastime. Her growing passion led
her to experiment with new cookie and cake recipes. They were so delicious that her friends encouraged her
to start a business. However, even though her product’s popularity skyrocketed, she was still having trouble
turning a profit, so she sought out City Alo. The financial services package customised by City Alo to suit her needs
ensured that she could start catering to larger business orders, after which there was no looking back. Today, she
has even completed her City Alo Certification Program and is a shining example of women in entrepreneurship.
Just like Rokeya and Mahfuza, there are countless examples of how City Bank has benefitted generations of customers.
From helping Mobin switch to embracing Shari’ah principles through City Islamic Banking, to supporting a large RMG
conglomerate in helping strengthen employee bonds through a payroll account via Employee Banking, to assisting Afroza
in obtaining City Bank’s digital nano loan of Tk. 15,000 via her bKash account app and directly credited to her bKash wallet,
to serving the needs of Mudassir, a Citygem customer, by offering exclusive lifestyle benefits and helping him draw up a
personalised investment plan, to helping Akhter pay his utility bills through the convenience of a few clicks via Citytouch.
City Bank has grown to become one of the largest private sector banks of Bangladesh, making a growing contribution
to the Asian Tiger’s development by meeting the diverse needs, requirements, and hopes of its customers over many
generations. These services have progressed from being offered in convenient branch locations to now including
a full suite of digital services that can be accessed from the comfort of one’s own home or place of business.
As we position the Bank for the next 40 years and beyond, we will continue to achieve growth by
remaining true to our purpose of providing financial services with a human – and humane – touch,
which in turn motivates us to innovate and implement sustainability considerations in our pursuit
of meeting the ever-evolving needs of our customers and stakeholders, both now and in the future.
For us, the next 40 years and more start now!
Annual Report 2022
3
AWARDS AND ACCOLADES
2016
Best Bank in Bangladesh
Global Finance Best Emerging
Markets Bank
Best Bank in Bangladesh
FinanceAsia Best Bank Awards
Best Financial Institution of the Year
DHL-The Daily Star Bangladesh
Business Awards
ICMAB Best Corporate Award
ICMA Bangladesh
As one of the most awarded Bank of the
nation, City Bank believes that credible
external endorsements are always
a motivating factor in the journey of
accomplishing excellence. Continuing
with its trailblazing path, the Bank was
bestowed with a number of awards and
accolades in 2022.
2020
Best CSR Bank in
Bangladesh
Asiamoney Best Bank
Awards
Leading Partner Bank in
Bangladesh
Asian Development Bank
(ADB) under Trade and
Supply Chain Finance
Program (TSCFP)
4
Annual Report 2022
2017
2018
2019
ICMAB Best Corporate Award
ICMA Bangladesh
Global Climate Partnership Award
Global Climate Partnership Fund
Best Online Bank
ICT Division of the Government of
Bangladesh
Best Premium Banking Services in
Bangladesh
Asiamoney Best Bank Awards
Best Women Program
Launch Award
Financial Alliance for Women
Best Bank in Bangladesh
Asiamoney Banking Awards
Best Bank in Bangladesh
FinanceAsia Best Bank Awards
Best Bank in Bangladesh
Global Finance Best Emerging
Markets Bank
Best Investment Bank in
Bangladesh
FinanceAsia Country Awards
Best Bank in Bangladesh
FinanceAsia Best Bank Awards
Best Consumer Digital Bank
Global Finance Award
Preface
In the last 10
years City Bank
has achieved
50 awards
Best Premium Banking
Services in Bangladesh
Asiamoney Best Bank Awards
Best Bank in Bangladesh
Global Finance Best Emerging
Markets Bank
Syndicated Loan of the Year
Bangladesh
Asian Banking & Finance
TFP Momentum Award
ADB TFP Awards
Best Bangladesh Deal
Summit Group’s $79.67 million 12year and 10.5-year syndicated loans
FinanceAsia Achievement Awards
Best Consumer Digital Bank
Global Finance Award
2021
Best Bank in Bangladesh
Global Finance World’s Best Banks
Best Bank in Bangladesh
FinanceAsia Country Awards
Best Digital Bank in Bangladesh
Asiamoney Best Bank Awards
Best Consumer Digital Bank in Bangladesh
Global Finance World’s Best Digital Bank Award
Best Innovation in Banks for Digital Loan
Bangladesh Innovation Award
Best CSR Bank in Bangladesh
Asiamoney Best Bank Awards
Leading Partner Bank in Bangladesh
Asian Development Bank (ADB) under Trade and
Supply Chain Finance Program (TSCFP)
Best Retailer Banks
Bangladesh Retail Awards
2022
Best Bank in Bangladesh
FinanceAsia Country Awards
Best Bank in Bangladesh
Global Finance Best Bank Awards
Best Sustainable Finance Bank in Bangladesh
Global Finance’s Sustainable Finance Country Awards
Best Retail Bank
Bangladesh – Retail Banker Asia Trailblazer Awards
Best New Islamic Banking Window
Bangladesh – Global Brands Banking & Finance Awards
Best Islamic SME Bank in Bangladesh
The Asset Triple A Islamic Finance Awards
Best CSR Bank in Bangladesh
Asiamoney Best Bank Awards
Leading Partner Bank in Bangladesh
Asian Development Bank (ADB) under Trade and Supply
Chain Finance Program (TSCFP)
Product Innovation of the Year
Global SME Finance Awards
SME Financier of the Year
Asia – Global SME Finance Awards
ICMAB Best Corporate Award
by ICMA Bangladesh
Annual Report 2022
5
CONTENT NAVIGATION
Cover Story
Awards and Accolades
Letter of Transmittal
Welcome Note by Our Chairman
Corporate Philosophy
Code of Conduct and Ethical Guidelines
01
04
08
09
10
12
Our Value Creation Model
Our Integrated Approach to Performance Management
Financial Capital
Manufactured Capital
Human Capital
Social & Relationship Capital
Intellectual Capital
Natural Capital
Strategy and Resource Allocation
14
16
20
27
30
36
39
42
44
Theme Stories
City Bank at a Glance
Our Flywheel
Performance Scorecard, 2022
46
58
60
62
The Visionary Change Makers
Board of Directors
Management Committee
Extended Management Committee
The City Bank Limited - Top Line Skip levels of
Managing Director & CEO
63
64
68
74
Corporate Directory
79
Communique from Our Chairman to Stakeholders
Performance Note from the Managing Director &
Chief Executive Officer
Statement from the Chief Financial Officer
86
01
PREFACE
14
INTEGRATED REPORT
46
The inaugural piece of IAR 2022 describes how City Bank has
contributed to Bangladesh’s betterment over the past 40 years
and how this will accelerate in the next 40 years and beyond.
This key section of the IAR presents City Bank’s value creation
model and how we have influenced our six capitals to create
value over different time horizons. It also gives a snapshot of our
strategy in resource allocation.
IMPRESSIONS & EXPRESSIONS
This piece shows how we are impacting various segments of our
customers through our thoughtful banking products and solutions,
creating positive impressions and expressions, which has resulted
in consistent performance over the years.
63
OUR PILLARS
78
OUR IDENTITY
85
MANAGEMENT COMMENTARY
This part of the IAR exhibits the journey of a group of courageous
entrepreneurs and industrialists who founded City Bank against all
odds. It also gives a view of our current Board members steering
the Bank with the same zeal and spirit, and our other senior
management members leading from the front.
76
This segment of the IAR gives a picture on the legacy and history of City
Bank in the realm of its identity, operational scale, business wings and
credit ratings, as well as other technical details.
90
96
Performance at a Glance, 2022
101
Economic and Operating Environment
Our Strategic Priorities
Connecting with Our Stakeholders
Distribution of Value
Competitive Analysis under Porter’s Model
PESTEL Analysis
SWOT Analysis
Historical Performance
Horizontal Analysis
Vertical Analysis
103
107
109
112
113
115
118
120
122
124
Wholesale Banking
Treasury & Market Risk Division
Commercial Banking
Supply Chain Finance
Retail Banking
Small and Microfinance
Medium Enterprise Banking
Digital Financial Services
Cards
127
132
135
138
140
155
158
160
165
103
126
This piece gives readers an insight into the perceptions and
perspectives from the C-suite as they detail the position of the Bank in
a competitive environment and how the Bank is building a competitive
moat for sustainable advantage. It also portrays the Bank’s 2022
performance in a comparative analysis with the past years.
CONTEXT OF OPERATIONS
This section of the report gives an overview of our business
landscape through detailing the opportunities, trends and risks,
and how the Bank is transforming to adapt and create value. This
descriptive analysis is given via the Bank’s engagement with its
stakeholders as well as through the various management models,
including Porter’s Model, SWOT, etc.
OUR FOUNDATIONS
This major part of the report showcases the value we attest
to investor communication. It gives a detailed insight into
the various business segments and functions of the Bank
and how each is committed to contribute individually and
collectively to the sustainable progress of the organization.
Trade Services Division
Operations
Money Laundering & Terrorist Financing Prevention
Credit Risk Management
Risk Management Division
Special Asset Management
Credit Administration Division
Internal Control and Compliance
Procurement
Brand & Communications and Corporate affairs
PR & Media
Finance Division
Legal
Information Technology
General Administrative Division
167
170
174
176
180
182
185
187
191
193
196
197
199
200
204
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
207
209
212
213
Chief Risk Officer’s Review on Risk Management
Risk Management Report
216
223
Sustainability at City Bank
Sustainability Highlights
Corporate Social Responsibility at City Bank
236
244
246
Directors Report
Economic Impact Report
Shareholder Service
Segment Analysis
Director’s Responsibility Statement
Report of the Managing Director & CEO and the Chief
Financial Officer
250
275
278
281
283
Corporate Governance Report
Report of the Executive Committee
Report of the Audit Committee
Report of the Board’s Risk Management Committee
Our Corporate Governance Structure
286
297
298
301
305
Independent Auditors Report
Consolidated and Separate Financial Statements
Financial Statement of Islamic Banking Branch
Financial Statement of Off-shore Banking Unit
Financial Statements of the Subsidiaries
Basel III Pillar 3: Disclosures on Risk Based Capital
326
331
425
430
436
526
Photo Album
Branch & Sub Branch List
Glossary
Notice of the 40th Annual General Meeting
Proxy Form
552
576
587
589
591
We invite you to download a
digital copy of this Annual Report
by scanning this QR code on your
smart device.
284
206
215
OUR OFFSHOOTS
This section of our reporting suite provides an overview of the
operating subsidiaries of City Bank and how they are creating value
differentiation within their own operating spheres.
OUR RISK GOVERNANCE
This portion of the report discusses how the Bank is managing
and mitigating risk amidst a challenging economic outlook,
fronted through a piece by our Chief Risk Officer, and how
deep risk control has added to our value creation story.
236
OUR ESG APPROACH
249
STATUTORY REPORT
This part of the report talks of how the Bank has integrated ESG
and social operations within its overall operational remit and how it
is contributing to both social uplift and societal development, while
ensuring performance with conformance.
This part gives a view of the Bank’s operating landscape,
operations, performance and outlook from the view of the
Directors. It also includes other details such as the Bank’s
economic impact, shareholder service, segmental analysis, etc.
285
GOVERNANCE AT CITY BANK
325
FINANCIAL STATEMENTS
551
This portion of the report tells of all the governance practices at
the Bank and also includes the Bank’s alignment to regulatory
guidelines. It demonstrates the Bank’s character, led by the apex
body the Board of Directors, in operating within the ambit of the
country’s national laws and rulebooks, especially showcasing
compliance with Bangladesh Bank guidelines. It also gives reporting
on the various sub-committees of the Board.
This concluding part of the IAR offers a detailed description of the
Bank’s financials for the year, backed by the auditor’s reports. It
also offers a view of the Bank’s Basel III Pillar 3 risk- based capital
disclosures.
GLIMPSES
This closing section provides a photo album of the Bank’s key
achievements of the year, along with information complementary
to the main report, including the glossary, proxy form, attendance
slip, etc.
You can also download a copy of
this report from our website:
https://thecitybank.com/report/annualreports
LETTER OF
TRANSMITTAL
To
All Shareholders
Bangladesh Securities and Exchange Commission
Registrar of Joint Stock Companies & Firms
Dhaka Stock Exchange Limited
Chittagong Stock Exchange Limited
Sub: Annual Report for the year ended 31 December, 2022
Dear Sir(s)/Madam(s),
We take pleasure to present before you The City Bank Limited’s Annual Report 2022, along with the Audited Financial Statements
(Standalone and Consolidated), including the Balance Sheet, as at 31 December, 2022 and Income Statement and Cash Flow
Statement for the year ended 31 December, 2022, along with the Notes to Accounts.
Financial Statements of the Bank (Standalone) comprise those of City Bank On-Shore (main operations) and Off-Shore Banking
Unit, whereas Consolidated Financial Statements comprise Financial Statements of the Bank and those of its subsidiary companies
(City Brokerage Ltd., City Bank Capital Resources Ltd., CBL Money Transfer Sdn. Bhd., Malaysia, and City Hong Kong Ltd.) presented
separately. Information in this report, unless explicitly mentioned otherwise, is based on the financials of the Bank and not the
Consolidated Financials.
Yours Sincerely,
Md. Kafi Khan
Company Secretary
Preface
WELCOME NOTE BY
OUR CHAIRMAN
I extend a very warm welcome to you to City Bank’s Annual Report for the year 2022.
Following two years of a global health crisis, there was a sense of restored calm that was however shattered by the news of
Russia’s invasion of Ukraine on 24 February 2022 that resulted in a major escalation of humanitarian and economic crises.
However, despite the formidable challenges, the Bank was able to report pleasing results for the year under report. We met our
expectations, both on the growth and profitability fronts and it comes to my mind that if such a performance is a source of great
pride in normal times, it is all the more so in a period when the abnormal is becoming the new normal.
The Bank’s financial results have truly proven the extent of the efforts made by everyone, the relevance of our solutions, and the
positive impact of our tools and our model.
So I want to acknowledge everyone’s hard work and ability to adapt. From employees to managers, from the Board to the Board
committees, we have all had to adapt, reviewing our work methods, rethinking our organisation and our services, and reimagining
our role in the future of the banking industry in Bangladesh.
Our performance, resilience and ability to reinvent in adversity and the need to imagine the next 40 years and beyond is in my
opinion deeply rooted in the Bank’s culture. Always being ready for the future, ready to serve the next generation of customers
is in our DNA. The Bank has always been able to seize opportunities, make decisive moves, embrace innovation and explore the
possibilities. Many of the Bank’s products and solutions are an outcome of this.
In this historic milestone of 40 years of City Bank, I’m sure our intrepid Founders would have imagined the size, scale and influence
of the Bank today and would have encouraged us to do more.
We remain committed to this ideal!
Sincere thanks,
Aziz Al Kaiser, Chairman
CORPORATE PHILOSOPHY
At City Bank, we manage our business and people with the responsibility of delivering sustainable
financial returns. A commitment to the principles of good governance and the strategic role of
our Board, senior leadership and skilled workforce collectively contribute to shaping a sustainable
organization, anchored on the strong foundations of our corporate philosophy.
VISION
We are driven by our Vision of emerging as a financial supermarket with a winning culture, while offering
enjoyable experiences to our stakeholders.
MISSION
We are focused on our Mission of becoming the financial services group of choice in Bangladesh. Towards
this extent, we intend to:
Offer a wide array of
products and services
that differentiate and
excite all customer
segments.
Be the ‘Employer of
choice’ by offering an
environment where
people excel and
leadership is created.
Continuously
challenge processes
and platforms
to enhance
effectiveness and
efficiency.
Promote innovation
and automation
with a view to
guaranteeing and
enhancing excellence
in service.
Ensure respect for
the community,
good governance
and compliance in
everything we do.
VALUES
Our Values define the way we think, work and act. We believe that we can realize our Vision and
Mission when the expected behaviour from our employees is clearly defined. Our core values
reflect the following:
We are
‘results-driven’.
We are
We are ‘engaged’
We are
and ‘inspired’.
‘accountable’ and ‘courageous’ and
‘respectful’.
‘transparent’.
We are focused
on ‘customer
delight’.
SHARED GROWTH
We are committed to Shared Growth, which for us means partnering the Government in achieving nationalistic goals, having
a positive lasting impact on the society and delivering shareholder value over the long-term. We possess a holistic approach
to deliver commercial returns, while proactively responding to stakeholder needs.
CODE OF CONDUCT
AND ETHICAL GUIDELINES
Upholding ethics and transparency and adherence to best-in-class governance standards is a sociocommercial requirement for City Bank as well as a critical macro-financial growth driver.
At CBL, we have incorporated time-honored doctrines in our Code of Conduct (CoC) and ethical guidelines to facilitate valuesbased management and control of our operations. Importantly, our CoC and ethical guidelines together represent our devotion to
international standards and industry best practices to enable robust superintendence of the Bank which is an important part of
the national banking and financial services ecosystem.
Our CoC is enshrined in the following tenets:
Rigorous compliance with laws and statutes
All employees must follow and comply with the laws of the land and internal rules, regulations and guidelines of
the Bank.
Integrity of records
All our employees are expected to maintain books and records with integrity and ensure accuracy and timely
documentation of all transactions, while maintaining privacy and security of customer data. As per our rules,
employees are prohibited from divulging the Bank’s plans, methods, activities and other such information that is
considered to be proprietary, sensitive and classified as confidential, without proper authorisation. This helps in
safeguarding the integrity of our classified records and documents.
Misappropriation of assets
Employees of the Bank are strictly restricted from converting any funds or property that is not legitimately theirs
for their own use or benefit, nor are they expected to deliberately assist any other person in such misuse and
exploitation.
Money laundering and terrorist financing
CBL strongly opposes all forms of money laundering and shall take all the necessary steps to prevent its financial
channels from being used by others for the purpose of laundering money. Employees responsible for opening
accounts are required to fulfil all formalities and are also mandated to review accounts periodically as per regulatory
guidelines. Further, employees are expected to remain vigilant of suspected transactions and are required to
report them as soon as they occur as per guidelines with an aim to combat any sort of terrorist financing or money
laundering activity.
12
Annual Report 2022
Preface
Conflict of interest
Employees must not use their position in the Bank for any kind of personal benefit for themselves together
with members of their families/friends. Employees who are members of different school boards, societies or
recreational bodies should be aware of conflicts of interest and declare any such conflict.
Honesty and integrity
Employees are expected to act honestly and with integrity at all times. They should act in an upright, ethical and
equitable manner while dealing with the public and their co-workers.
Acceptance of gifts
Employees are discouraged to accept gifts, benefits or any sort of invitations of questionable nature from
customers and persons with business interests with the Bank.
Harassment, discrimination and inappropriate behaviour
CBL is committed to the principles of merit, meritocracy and DEI in its employment practice and fosters a work
environment that respects diversity and individual differences. It does not tolerate any discrimination, intimidation,
harassment, bias or retaliation, whether direct or indirect, by its employees towards anyone else.
Work environment
It is expected that employees shall conduct themselves with the highest standards of integrity and professionalism
in the workplace, or any other location while on business, and shall ensure that none of his/her actions cause any
nuisance, disturbance and debase the image, goodwill or reputation of others or of the Bank. Employees shall
treat all City Bank customers, suppliers, co-workers and others with respect.
Ethical responsibility
CBL’s goal is to do business ethically and prevent improper business practices. Hence, the Bank places importance
on ethical validation and appropriate authorisation of all decisions and actions of its employees before they are
initiated.
Annual Report 2022
13
OUR VALUE CREATION MODEL
CAPITAL INPUTS
Our resources and
relationships
OUR BUSINESS OPERATIONS
Vision of being a
financial supermarket
nking
l Ba
a
t
gi
Di
SM
EB
an
k
City
Bank
Retail Ba
nkin
g
c Banking
Islami
Human capital
Workforce of 4,866 people
comprising a mix of youth and the
experienced with varied ethnicity
and beliefs that add to our rich
cultural identity.
ing
ank
B
ale
g
in
Manufactured capital
133 branches located around
the country, together with 12
sub-branches, 690 agent banking
outlets and 351 ATMs, comprising
multiple customer access points.
Wh
ole
s
Financial capital
Strong balance sheet with
invested capital and total assets
valued at Tk. 507 bn and market
capitalisation at Tk. 26.17 bn.
Purpose of building a
high-performance
organisation
Highly Material
Topics
Important
Topics
Technology
Diversity and Inclusion
Intellectual capital
Knowledge, engagement, capacity
building and skills development,
together with our IT and digital
infra collectively comprise our
intellectual capital.
Customer Experience
Natural capital
We are committed to climate
action and have well-established
green and sustainable finance
units with strong credit screening
and growing asset base.
14
Annual Report 2022
Governance
Sustainable Finance
Financial Literacy
Financial Inclusion
Healthy and Safety
Climate Action
Material ESG Matters
Social & relationship capital
Established multi-stakeholder
approach to value creation that
takes into account all the needs
and expectations of our varied
stakeholders.
Corporate Culture
Sustainable Value Chain
SDGs Alignment
Corporate Citizenship
Risk Control
Integrated Report
OUR KEY STAKEHOLDERS AND PROPOSITIONS
IMPACT: VALUE CREATION
Value Creation
in 2022
Shareholders
Employees
Society
Govt./Regulators
Partners
Proposition
We observe the highest standards of
governance and integrity to build
confidence through:
• Timely and adequate disclosures
• Differentiated and responsible approach
to planning and delivering growth
• Oversight, controls, independent
assurance, and reporting
Proposition
We make City Bank the best place for the
best talent to work through:
• Competitive remuneration and benefits
• Learning and talent development
• Diversity, equity and inclusion
• Health, safety and welfare
Proposition
We work towards building healthy and
resilient communities through:
• Supporting communities from the
lowest income households
• Prioritising of at-risk and most
vulnerable communities
• Channeling finance to enable a
low-carbon and just economy
Proposition
We contribute to building a strong and
stable banking sector through:
• Supporting regulations and norms
• Ensuring financial liquidity and stable
capital ratios
• Contributing to discussions on industry
best practices and policy
TEAM CITY BANK
Tk. 7,002 mn Salaries
9% Growth in learning hours
14% Females in the workforce
CUSTOMERS AND CLIENTS
0.4 mn Digital Banking users
Tk. 57,311 mn Sustainable and green finance book
24% Expansion in loans and advances
18% Growth in total deposits
0.1 mn++ Number of nano
0.2 mn++ Number of new customers
SHAREHOLDERS
14.1% Return on Equity
1.0 % Return on assets
12.0% Dividend declared
8.5% CET 1
5.0 % Growth in Equity
83.2% AD ratio
51.9% Cost-to-income ratio
4,508 mn Profit after tax
SOCIETY
71.6% Growth in YoY CSR budget
100,000++ Beneficiaries (approx)
Strong employee volunteerism
Proposition
We contribute to building a strong and
stable banking sector through:
• Supporting regulations and norms
• Ensuring financial liquidity and stable
capital ratios
• Contributing to discussions on industry
best practices and policy
Annual Report 2022
15
OUR INTEGRATED APPROACH TO
PERFORMANCE MANAGEMENT
Driving positive outcomes across the Bank
been either excluded or redefined to better align to the way
At City Bank, we plan our resource inputs in the form of
various capitals, namely our financial strength, physical
network, valued people, robust relationships, and our
intellectual, natural, and strategic capitals. This is part of our
integrated approach to managing and driving performance
and to address the expectations of our critical stakeholders
while effectively responding to various market trends. By
coordinating plans throughout our main markets, balancing
financial and non-financial performance measures, and
coordinating efforts across our business’s mission-critical
divisions, we manage our operations in a seamless manner.
functions. The table below establishes the relationship
In 2022, we continued to engage in our consolidation and
mapping exercise to reconcile various indicators that we track
and measure against our strategic themes, material matters
and capitals, also establishing alignment with specific
shareholder and stakeholder expectations. As a result, some
of the indicators that we had reported in 2021 may have
Financial inclusion
and mobility
Trust-building with
stakeholders
Performance with
Conformance
Organisations depend on various forms of capital for
sustainable value creation. In the International <IR> Integrated
Reporting Framework, these capitals are defined as Intellectual,
Manufactured, Human, Social & Relationship, Natural and
Annual Report 2022
between various components of our business and the
impact indicators that contribute to City Bank’s financial and
non-financial performance.
Our 2022 integrated reporting approach is themed around
our fundamental values, which have successfully guided us
through uncertain times, primarily characterised by monetary
tightening through frequent changes in key policy rates that
has been witnessed in Bangladesh and elsewhere in the
world. It also emphasises on our practical approach to living
our values every day and making choices that are consistent
with our time-tested governance procedures, stringent
ethical standards, and meticulous business conduct. Among
our most important tangible focus areas that are a major part
of our integrated approach to performance management are
the following:
Digital products and
services
Workforce development and DEI
Fostering value through our six capitals
16
we measure and report our performance consistently across
Digital + physical
network
SDG impact and
climate action
Financial. City Bank is no different as value is generated through
impacting the various stocks of capitals leading to financial
and non-financial outputs and outcomes. The Bank’s Business
Model on page 14 detail the integration of these six capitals
into our business. The icons below serve as a distinguishable
illustration to these six capitals within this report.
Integrated Report
Financial Capital
Our management of capital flows ensures a healthy balance sheet and sustains our ability to
invest in future growth while meeting the banking needs of our customers. Maintaining a strong
capital position allows us to deliver monetary value to our shareholders, as well as to help other
capitals contribute to the overall performance of the organisation and deliver sustainable returns
to our stakeholders. Additionally, managing our financial capital positively impacts the stability of
the Bank, Group as well as the stability of the nation.
Manufactured Capital
Our physical networks and digital/technological capabilities form the critical infrastructure
needed to achieve high operational performance. Digital infrastructure in particular allows us
to unlock the potential of our other capitals and is especially important for our sector to create
safe, secure, and superior customer experiences. Our manufactured capital also helps to improve
financial inclusivity and economic mobility through the creation of opportunities for expanding
the scope of our financial services delivery model.
Human Capital
Human capital is the most critical input of our business and our focus is not just on building a
productive, skilful and engaged workforce, but also preparing them to survive and compete in
the disruptive marketplace of the future. This is at the heart of our workforce futurization focus.
A nurturing environment and empowering culture allow our people to seamlessly deliver to
organisational needs and expectations, while also catalysing their own personal and professional
growth. Our ultimate objective is to improve our human capital development, diversity, inclusion
and well-being of our staff and co-workers.
Annual Report 2022
17
Social & Relationship Capital
Our brand and reputation are strengthened by the relationships and the trust that we build with
our stakeholders. Being a top regional Bank, relationship equity help forge partnerships, expand our
customer base and build ecosystems with shared purpose, principles and progress. We work with
our wide network of stakeholders to create a stable and progressive financial services environment
in Bangladesh. Our regional network and brand equity improve our social and relationship capital
while strengthening our position in Bangladesh.
Intellectual Capital
As a focused banking group, we rely on our knowledge repositories, experience, unique systems,
technologies, and our innovative processes to create a robust competitive differentiation setting us
apart from competitors and giving us a value-advantage.
Natural Capital
Our operations consume water, energy and other resources and produce waste. Yet, being in the
services industry our typical carbon footprint is negligible. Our management of natural capital rests
on minimising our direct and indirect negative footprint across the value chain and creating positive
handprints through strategic business interventions. It also includes our investments into priority
SDGs and asset allocation as per our green and sustainable impact products and services.
18
Annual Report 2022
Integrated Report
01
17
16
Peace,
Justice,
& Strong
Institutions
15
Partnership
for the
Goals
No
Poverty
02
Zero
Hunger
03
Life
on Land
14
13
Good Health
& Well Being
City Bank
impacts the
SDGs
Life
Below
Water
Climate
Action
12
Quality
Education
Gender
Equality
05
Clean
Water
& Sanitation
Responsible
Consumption &
Production
06
Sustainable
Cities And
Communities
11
04
Affordable and
Clean Energy
Reduced
Inequalities
10
Decent Work
Industry,
and Economic
Innovation,
Growth
Infrastructure
09
07
08
Delivering societal value through our core purpose
Our purpose is to create a better, healthier and safer future for all through mainstream financial services.
We find that the United Nations’ Sustainable Development Goals provide the best articulation of what
a better future should look like, thus setting a clear long-term plan to end poverty, nurture learning and
education, safeguard the planet and ensure development and prosperity for all by 2030.
As Bangladesh’s leading Bank, we have a shared responsibility to the attainment of these goals,
supporting the government, businesses, individuals and communities to build a better future for
all, leaving no one behind. Through our core business of providing a wide array of financial products
and solutions, we are making a valuable contribution to meeting national developmental goals and
objectives, thus helping the nation climb up the social and economic index.
FINANCIAL CAPITAL
Financial Capital refers to the key financial components that together ensure the Bank has adequate
capital and liquidity to continue as a going concern, even after meeting its financial obligations.
Impact to the business and stakeholders
Enables investment to
expand channel architecture
in order to grow market
share
12,359
Augments brand reputation
and supports the Bank to
maintain a consistent credit
rating
Provides resources to
develop new innovations
and tailormade solutions
for customers and
increase investment in the
community
4.3%
Improves the Bank’s human
resource development
capability
3.9%
(Net interest income,
Tk. mn)
(Net interest margin, %)
(NPL, %)
4508
8.5%
507
(Net profit, Tk. mn)
(CET-1, %)
Contextual overview
With Bangladesh experiencing significant economic challenges,
the year 2022 saw almost all the sectors in the economy come
under stress after somewhat post-pandemic stabilisation in
the prior year period. A majority of businesses were hit by low
demand as a result of lower disposable incomes triggered by
very high inflation and increase in market interest rates seen
since April 2022. Additionally, the combined effect of high rates
20
Annual Report 2022
(Total balance sheet,
Tk. bn)
and tight monetary policy measures caused private sector
credit growth to remain muted as industry deferred any major
capex plans in the face of weak demand and growing credit
cost. Furthermore, Bangladesh being an export-dependent
economy also had to bear the brunt of fragile global demand
as the Russia-Ukraine war exacted a toll on global supply
chains and further fuelled inflation, triggering unprecedented
rise in the prices of oil and gas, food grains, fertilisers, etc.
compelled to adopt various defensive strategies and focus
more on consolidation of existing business rather than the
pursuit of aggressive growth. City Bank remained resilient,
where despite uncertainties, the Bank was able to sustain its
growth momentum. By capitalising on opportunities available
in the market whilst also exercising greater prudence during
periods of uncertainty, the Bank succeeded in consolidating
its resources to stay on course with the growth trajectory
maintained over the past decade.
The government’s efforts remained commendable to
pull back the economy against a globally deteriorating
situation. Forward-looking policies to spur credit offtake and
consumption, coupled with the successful agreement reached
with the International Monetary Fund (IMF) to drawdown the
sum of over US$ 4 billion under its various programs will go
a long way in creating a stronger foundation for accelerated
economic recovery. Bangladesh is in a much stronger position
vis-à-vis neighbouring countries such as Pakistan and Sri
Lanka that are in economic turmoil with very high inflation and
political instability.
Leadership message
Our 2022 performance reflects the advantages of our well-positioned and broad-based financial product suite,
which caters to the needs of a wide cross-section of the economy. Whilst COVID-19 and now the war in Europe
had a significant impact on the broader economy in terms of triggering inflation and prompting the central bank
to tighten monetary policy, at City Bank we exited the year 2022 relatively unscathed as almost all our business
divisions propelled growth that resulted in net interest income being expanded by 2.6% to Tk. 12,359 mn during the
year, with stable net profit of Tk. 4,508 mn. I’m also pleased to report that the Company continues to make large tax
contributions, with Tk. 10,633 mn deposited to the national treasury in 2022, an increase of 63% from the previous
year. At a time when the government’s resources are under strain, we will continue to provide our humble assistance
through timely exchequer payments.
Md. Mahbubur Rahman
Additional Managing Director and CFO
For more information, refer to the CFO’s message on pg 96 and Finance Division review on pg 197
FINANCIAL POSITION
Financial Assets
Total financial assets grew from Tk. 417 billion in 2021
to close at Tk. 507 billion as at end-December 2022, an
increase of Tk. 90 billion or equivalent of 21.6% increase
YoY, which was partly driven by the expansion in the Bank’s
advances portfolio. Despite a sluggish macroeconomic
environment, the Bank adopted a pragmatic approach to
customer financing with business divisions focusing more on
stable segments for new financing. Testifying to the success
of these strategies, the Bank’s advances portfolio recorded
a double-digit growth of 24% to reach Tk. 355 billion, vs. Tk.
286 billion recorded at end 2021.
Total Advances
BDT in billion
231
247
268
286
355
2018
2019
2020
2021
2022
Annual Report 2022
21
Integrated Report
Amidst this backdrop, the local banking industry was
Financial Liabilities
close the year under review at Tk. 332 billion, up from Tk. 282
billion at the end of the prior financial year. The Bank continued
With monetary tightening and upward movement in policy
rates from 2022 onwards triggering market liquidity constraints
and the ensuing competition for funds, deposit mobilisation
proved to be a considerable challenge. Nonetheless, customers
continued to place their trust and confidence in City Bank, a Bank
serving generations of customers, which propelled the Bank’s
deposit portfolio to record a commendable growth of 18% and
to maintain a strong portfolio of Current Accounts and Savings
Accounts (CASA), which in the financial year under review
stood at 51%, a commendable achievement under challenged
conditions. Further, our CASA for the year demonstrates scope
for growth and the Bank is confident of increasing it in the
future, thus enlarging its source of a low-cost fund base.
Total Deposits
BDT in billion
205
247
255
282
332
2018
2019
2020
2021
2022
CASA
Percentage
BDT in billion
35.9%
35.4%
42.0%
45.9%
51.2%
73
86
107
129
170
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Capital and Liquidity
City Bank’s Total Capital Ratio improved in the year under
review, supported by the increase in reserves. Capital ratios are
expected to improve further, driven by performance stability
and successful completion of the Bank’s Tk. 7 billion Tier-II bond
subscription in mid-2022 that enhanced Tier-II capital and also
gave a boost to the CRAR (Capital-to-Risk-Weighted Assets)
ratio. In addition to strengthening the Bank’s reserves and
capital position, part of this new capital infusion would also be
directed towards business expansion opportunities that would
create a positive impact on the Banks’ future profitability.
22
CASA
Annual Report 2022
Given the macroeconomic uncertainties in 2022, the Bank
continued to focus on maintaining healthy liquidity levels
in both BDT and USD. The strong emphasis on maintaining
adequate liquidity buffers ensured that the Bank ably met all
stakeholder obligations on time and without delay.
The Bank maintained all its capital ratios well above the
regulatory requirements throughout 2022. As at 31st
December 2022, the Bank’s CET-1, Tier-I and Total Capital
ratios were at 8.5%, 9.6% and 14.5%, compared to 9.3%, 10.6%
and 14.2%, respectively at the end of the prior year.
BDT in billion
Total Capital
BDT in billion
22
24
29
32
35
35
37
42
43
52
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Liquidity Coverage Ratio
Percentage
115.3%
142.6%
173.5%
151.1%
220.1%
2018
2019
2020
2021
2022
Return on Equity (ROE) and Return on Assets (ROA)
As a result of the stability recorded in PAT, the return on
average shareholders’ equity (after tax) stood at 14.1% as at
Return on Equity
Percentage
31st December 2022, compared to 15.8% reported at the end
of the year 2021. Return on average assets stood to 1.0% as
at 31st December 2022, against the 1.2% reported for 2021.
Return on Assets
Percentage
8.2%
9.9%
14.8%
15.8%
14.1%
0.7%
0.7%
1.1%
1.2%
1.0%
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
INCOME STATEMENT
Net Interest Income
Following the progressive increase in financing rates and
effective re-pricing of customer deposits and other facilities,
financing income increased substantially to reach Tk. 25,557
million in 2022 from Tk. 20,725 million recorded in prior year
of 2021, implying a healthy increase of 23.3% YoY.
Annual Report 2022
23
Integrated Report
Tier-1 Capital
Meanwhile, with liabilities being re-priced relatively swiftly in
the market due to enhanced liquidity mobilisation efforts by
the banking system, financing expenses rose from Tk. 8,678
million in 2021 to Tk. 13,198 million in the year under review.
However, strong growth on the income side enabled City Bank
to offset this impact, to record Net Interest Income or NII of Tk.
12,359 million in 2022, a 2.6% YoY increase from Tk. 12,048
million registered in 2021. Subsequently, the Bank was able to
sustain a healthy Net Interest Margin or NIM of 4.3%.
Net Interest Income
Net Interest Margin
BDT in million
Percentage
9,201
10,832
8,363
12,048
12,359
4.1%
5.0%
3.7%
4.5%
4.3%
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Net Fee and Commission Income
Operating Expenses
Due to the shortage in foreign exchange and import restrictions
for most part of 2022, trade-related business volumes were
under pressure. However, City Bank was an outlier in this
regard, with its Trade Services Division (TSD) opportunistically
focusing on areas of facilitation of imports of essential items
and export earnings from related services, the Bank succeeded
in growing its Net Fee and Commission Income, which rose
by a commendable 27.2% to Tk. 8,624 million in 2022, as
compared to Tk. 6,776 million in the previous year.
The Bank’s Operating Expenses increased to Tk. 12,761
million in 2022, from Tk. 10,403 million reported in the
prior year and Tk. 9,697 million generated in 2020. General
price hikes amid an inflationary environment during the year
contributed to the aforementioned increase.
Aggressive efforts to promote digital channels saw the Bank make
good headway in boosting revenue generated through these
sources. Included within Bank’s total income for 2022, income
generated from digitally-enabled customers stood at Tk. 0.4
million, reflecting a satisfactory 38% growth over the previous year.
Operating Income
The total Operating Income reached Tk. 24,588 million for 2022,
a sizable 14.9% higher than the Tk. 21,403 million recorded in
2021. This increase was mainly supported by income earned
through foreign exchange transactions and others.
Total Operating Income
15,902
2018
24
18,285
2019
Annual Report 2022
Notably however, personnel expenses reported a relatively
controlled growth of 22.6% in 2022, as compared to the
previous year, primarily due to the Bank’s focus on expanding
resource productivity and engaging in specialist recruitment.
The Cost-to-Income ratio stood at 51.9% in 2022, vs. 48.6% in
2021, led by effective cost saving measures to curb expenses.
The Bank will continue to focus on cost optimisation and
expense discipline with a view to further optimise this key
ratio that has significant and direct profit ramifications.
Cost-to-Income
Percentage
58.0%
54.7%
57.9%
48.6%
51.9%
2018
2019
2020
2021
2022
BDT in million
16,737
2020
21,403
2021
24,588
2022
•
Total Tax expenses for the year under review was Tk. 4,377
million (Corporate Tax) , against Tk. 3,712 million recorded
in the previous year, reflecting a YoY increase of 17.9%. The
increase in income tax expense is directly correlated to the
profitability for the year. The Bank deposited a total sum
of Tk. 10,633 million to the exchequer for the year, against
Tk. 6,503 million deposited in the national treasury in the
prior year.
Capitalised on City Bank’s consistent performance and
stability to expand the network of global correspondent
banks resulting in new tie-ups to strengthen the coverage
in select high-growth markets and geographies
Treasury Income
BDT in million
1,842
2,086
3,437
2,578
3,605
2018
2019
2020
2021
2022
Profitability
City Bank reported a profit before tax (PBT) of Tk. 8,884
million in 2022, against Tk. 8,455 million recorded in 2021.
Profit after tax (PAT) for the year under review stood at Tk.
4,508 million, as against Tk. 4,743 million in the prior year.
Net Profit
BDT in million
BDT in million
2,018
2,472
4,012
4,743
4,508
27,882
39,451
46,251
54,920
61,105
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Treasury Functions
Strategic highlights
City Bank has robust Treasury operations with a team
comprising seasoned veterans in banking, finance, investment
and capital markets. The Treasury continued to support the
Bank’s objectives in liquidity management, supporting capital
requirements, while also ensuring engaged fund management
for enhancing yields. Some of the notable developments of
Treasury in 2022 is given below:
•
Treasury Assets
Leveraged market conditions to improve foreign exchange
income
Group Performance
The City Bank Group consists of various subsidiaries, including
City Hong Kong Limited (City HK), CBL Money Transfer Sdn. Bhd.
(CBLMT), City Brokerage Limited (CBL) and City Bank Capital
Resources Ltd (CBCRL). All these entities reported a resilient
performance and posted encouraging financial results in 2022,
notwithstanding pandemic-related and geopolitical challenges
and enabling the Group to post sound consolidated financial
results for the year under review. The Group reported PBT of
Tk. 9,378 million and PAT of Tk. 4,781 million for the 2022, as
compared to Tk. 9,543 million and Tk. 5,494 million, respectively,
in the previous year. The total assets of the Group reached Tk.
•
Prudent liquidity management approaches to maintain
adequate liquidity buffers in both BDT and USD
514 billion at the end of the year 2022, against Tk. 424 billion
•
Ensured that business divisions had sufficient funds
to pursue growth objectives while managing inflows,
outflows and financial/credit risk
the credit and operational risks at each subsidiary level.
recorded in 2021, exhibiting a growth of 21.2%. It is noteworthy
to mention that the Group took proactive measures to manage
For more information on our subsidiary companies, pls
refer to pg 436
Annual Report 2022
25
Integrated Report
Taxation
Future roadmap
Long-term goals
Short-to-medium-term goals
•
Minimise the maturity mismatch between assets and
liabilities through more engaged ALCO management
•
Strategically diversify the lending approach to boost net
interest income and margin
•
•
Being belligerent in driving growth of the Bank’s lowcost/
deposit portfolio
Maintain a higher retention rate in CASA accounts and
expand this further over the years
•
•
Reinforce Bank-wide cost saving initiatives on an ongoing
basis
Leverage on digital technology to derive sustainable cost
savings
•
Continue to ensure robust credit screening and
underwriting to maintain pristine asset quality
Impact on other capitals
26
Strategic allocation of financial resources
to develop delivery channels in line with
the Bank’s expansion strategy will help
strengthen market reach and share
Consistent improvement in financial
performance over time serves to
enhance the Bank’s credibility and
reputation in the industry
Sustainable financial results will enable
the Bank to consistently allocate
resources to meet the needs of all key
stakeholders
Improved financial results allow the
Bank to increase value created for
employees by way of above average
salaries and benefits, thereby increasing
motivation and employee satisfaction,
and lowering employee turnover
Annual Report 2022
Manufactured Capital consists of the physical and digital infrastructure that together provide the
foundation for City Bank to engage in its core business of banking activities, thus enabling day-to-day
operations.
Impact to the business and stakeholders
Empowers the Bank
to grow customer
relationships and market
share.
Builds trust among
customers and the wider
community.
Improves visibility and
strengthens brand
credibility and reputation.
351
ATMs
133
12
Supports job creation
thus enhancing the
Bank’s employee value
propositions.
Branches
Sub-Branches
690
Agent Banking
Outlets
Our branch network
Having made consistent investment since our inception to
build a strong pan-Bangladesh branch network, City Bank’s
branch footprint today comprises 133 full-fledged branches
located across all the 64 districts or eight administrative
divisions of the country.
Over the years, the Bank has taken a practical approach to
ensuring that new branches are strategically positioned in
large urban areas recognised to be major economic hubs, as
well as in underserved regions with demonstrable growth
potential. Most of the time, these urban and semi-urban
centers are also linked to a significant number of neighbouring
townships and an even greater number of periphery villages,
resulting in a relatively high population density and hence
64
CDMs
customer/potential customer density. As a result, developing
a strong branch presence in these hub conurbations and other
growth-oriented locales is regarded as critical to delivering
mainstream financial services, thereby facilitating financial
inclusion and long-term economic development across not
only a micro-market but also a broader social spectrum.
City Bank branches are designed to provide a comprehensive
range of banking services in a secure and comfortable
environment. Furthermore, a yearly budget for maintenance
ensures that all branches are frequently maintained and
renewed to ensure service consistency and uniformity across
the network.
Meanwhile, signalling its commitment to support women’s
empowerment, which is necessary in the country to spur
Annual Report 2022
27
Integrated Report
MANUFACTURED CAPITAL
Branch Network
131
The bank consolidated its agent Banking outlets which
resulted in the rationalisation of the network during the year.
690
12
1183
11
1411
-
%
331
-
154
Feeder Network
-
economic and social inclusivity and growth, the Bank facilitated
the nation’s first-ever dedicated women’s banking unit under
City Alo at select branches, including a pathbreaking coffee
shop branch in the heart of Dhaka city. With 60 such women
banking service wings available across its branch network,
these support efforts in women entrepreneur development,
financial inclusion and gender equality.
%
132
132
132
133
2018
2019
Sub-branches
2020
2021
2022
Agent banking outlets
ATM/CDM network
2018
2019
2020
2021
2022
Our feeder network
In yet another innovative approach to take banking to the
doorstep of customers, the Bank seeded the concept of a
sub-branch network that is smaller in size and is a feeder
service for the bigger branches. The primary area of focus
under this is to ensure an entry point into the City Bank
system through a basic account opening or small loan
disbursal. The idea is to progressively grow the relationship
with the customer by introducing them to other products and
services of the Bank. These units support financial inclusion
and mainstreaming financial services in underserved and
unbanked regions.
Taking off from this concept is City Bank’s agent banking
channel, with some of the Bank’s basic services entrusted in
a safe, secure and regulatory-compliant manner to an agent,
typically a prominent member of a local community, precertified by the Bank to conduct business on behalf of the
Bank. Over time, the Bank has been able to establish a mature
agent banking network comprising 690 outlets located across
the country.
The basic construct of sub-branches and agent banking
channel is to ensure affordability of service as well as basic
financial literacy, which are key components of financial
inclusion. These comprise the spokes within the hubs
(branches) that are essential for taking brand City Bank to
the hinterlands and mofussil areas, typically representing
unserved and underserved areas, thus stimulating the local
microeconomy through financial and micro-financial services.
28
Annual Report 2022
While City Bank’s ATM footprint was initially ancillary to the
expansion of the branch network, the Bank has recently
accelerated investment in its ATM network. As of 31 December
2022, the Bank’s ATM network totalled 351 ATMs, including
156 on-site ATMs at branches and another 195 freestanding
ATMs. This includes 23 new ATMs installed during the year,
including 13 at branch locations and 10 as standalone centres.
Besides, with the Bank being connected to the National
Payment Switch, its customers can access over 351 ATMs
across the country. Meanwhile, given the challenges stemming
from frequent power outages, the Bank took steps to enhance
the backup power systems across the network. The Bank also
further strengthened its own CDM network during the year. As
part of ongoing efforts to improve the operational efficiency
of ATMs and CDMs, the cash loading and other processes
were streamlined in the financial year. Following the ongoing
process transformation, cash unload and delivery turnaround
time have improved, alongside improved security while some
notable cost savings have also been registered through better
resource management.
In response to reducing the overcrowding of branches for
cash deposits and withdrawals, especially amid the COVID-19
pandemic that required social distancing and other safety
norms, the Bank opted to increase the number of CDMs, in line
with the general trend in the banking sector of Bangladesh.
Though CDMs cost more than conventional ATMs, they can
achieve higher cost savings as they require less frequent
replenishments than ATMs. Thus, the Bank’s CDMs reduce
cash management costs, as cash deposits are also used for
withdrawal transactions.
Integrated Report
2018
ATMs
CDMs
2019
City Bank’s presence in the digital banking space is denoted
by the “Citytouch” online banking platform which offers online
access through the mobile application for Android and iOS
enabled-devices as well as through a similar user interface
based web platform. This digital banking channel provides a
whole host of banking services available at the fingertips of
registered City Bank customers.
Furthermore, with a view to leverage customer acquisition
through digital means that offers a slew of advantages, such
as lower customer acquisition and operational costs as well
as better customer service and experience, the Bank launched
Bangladesh’s first digital nano-loan product with bKash. The
collateral-free instant digital nano loan for bKash users can be
accessed in a simple way, with eligible bKash users mobilising
ATM/CDM network >>
City Bank agent banking
channel >>
Digital innovation >>
2021
175
14
64
351
104
11
64
338
76
2020
Total No of ATM/CDM transactions (million)
Digital innovation
Branch network >>
8
64
311
84
9
63
343
61
7
30
338
ATM/CDM Network
2022
Total value of ATM/ CDM transactions (Tk. billion)
a loan ranging from BDT 500 to BDT 20,000 through the bKash
app, with instant credit in their account. The loan can be repaid
in three equal monthly instalments from their bKash accounts.
City Bank’s Digital Nano Loan, in partnership with bKash, is a
ground-breaking initiative that enables customers, especially
the unbanked population, to access formal financing 24x7
through their mobile wallet at a relatively low interest rate from
a scheduled commercial bank. They can avail this loan through
digital credit assessment and easily avoid hassles of traditional
lengthy borrowing paperwork and process. This initiative
represents a major milestone in promoting the Bangladesh
government’s widely acclaimed vision for a Smart Bangladesh.
As on 31 December 2022, the Bank’s digital nano loan
book stood at Tk. 174 million, a creditable accomplishment
considering the first full-year of launch.
Medium-term
Long-term
Drive digital branch activity amongst
customers
Harness digital banking technology to simplify
branch banking services
Upgrade ATM/CDM infrastructure for better
customer facilitation
Create a more dense network of ATMs/CDMs
across the country with high-uptime assurance
Take the service to deeper hinterland
pockets of Bangladesh
Consolidate the channel and drive improved
operational efficiency
Improve the e-KYC and digital onboarding
process and enhance customer migration
towards digital channels
Contribute to developing a digital ecosystem in line
with the Smart Bangladesh vision, keeping customer
digital experience at the centre of the sphere
Impact on other capitals
Multiple banking channels
increase the number
of income generating
sources to boost the
Bank’s revenue and profits
Reliability and high resilience
of core IT and infra systems
ensure business continuity,
in turn having a positive
impact on the Bank’s
reputation and credibility
Wider choice of diverse
physical and digital banking
channels helps to gain the
trust of diverse customer
segments, which is crucial in
the context of Bangladesh
Annual Report 2022
29
HUMAN CAPITAL
Empowering our employees is a key part of cultivating a high-performance culture, and we value motivating
and allowing our employees to be the best they can be. Our employee value proposition is burnished
by the passion and enthusiasm our employees bring to every engagement with our stakeholders. Our
approach to empowerment is to create a rewarding environment in which our people feel motivated and
capable of taking meaningful action to push the Bank forward, guided by our purpose, values and code
of conduct. Empowering our team is an essential component of our Human Capital in cultivating a highperformance culture.
Leadership message
At City Bank, we’ve always felt that a specialist, diverse and transformed workforce that is representative of society is
essential for maintaining our competitive edge. Our talent strategy is to recruit, motivate, engage and delight criticalskilled personnel while reskilling our employees for a new reality. We offer the sense of diversity, empowerment,
meritocracy and inclusion, and our dedication to workforce development and establishing a feeling of belongingness
for all is evidenced through our growth and development initiatives. Significant modifications to our operational
model, organisational structure, and staff composition enable the digital transformation of our business. This will
increase efficiency, lower service costs, and enable increased agility and speed necessary for effective response
to competition. Moreover, the evolution of our strategic personnel planning will enable the necessary workforce
restructuring, resizing and reskilling.
Nishat Anwar
Head of Human Resources
4,866
687
5.1
1.4
Total
employees
Revenue per
employee, (Tk. mn)
30
Annual Report 2022
Women
employees
14%
Women in the
workforce (%)
Average salaries and other benefits
per employee (Tk. mn)
Strengthens the Bank’s
ability to grow and sustain
revenue generation
capacity.
Augments the Bank’s
competitive advantage and
enhances the brand position
against peers.
Overview
At City Bank, we believe that our culture shift will facilitate
our digital transformation and operational model reset, hence
enhancing our competitiveness. Through a human-centered
leadership strategy, our culture will become more ingrained
and we will be inspired by a higher purpose to have a greater
effect on our customers and society. Our HR framework
influences employee experiences, and in the new world of
work, where work is something we do as opposed to a place
we go, culture and leadership will serve as the unifying factor.
Our 2023 and near-term focus is to choose the right individuals
and place them in the right roles, especially in light of the
Bank’s expanding digitisation horizons. We will also need to
ensure that employee skills continue to improve and grow in
tandem with the times as we focus on the future-readiness of
our workforce. We are also preparing the Bank for a growing
number of specialised professions, as automation renders
many manual and even labour-intensive tasks obsolete.
Hence, our ongoing focus will be on enhancing the capabilities
of our employees so that they can meet the Bank’s aims and
objectives in the new operating environment. In addition, a
specific emphasis will be placed on retaining our top talent,
recognising them and motivating them to sustain high
performance.
Employee experience and engagement
City Bank’s approach to employee experience management is
focused on the goal of obtaining 100% employee satisfaction.
The Bank focuses on continuous employee engagement
activities through a number of platforms such as learning,
training and development, rewards & recognition, team
activities and celebrations, etc.
The Bank considers its recruitment and selection process as
the first opportunity to create a strong positive experience
for employees. Based strictly on merit-led recruitment, the
Bank seeks to hire candidates who are deemed the best fit
for the job role. Accordingly, all new vacancies are advertised
publicly and notified internally to enable existing employees
Reinforces the connections
between Bank and its
customers.
Ensures optimal use of
available resources with
high productivity.
to apply, thus giving all applicants equal opportunity to prove
they are the right fit. Every application is rigorously vetted by
the Bank’s recruitment team under the supervision of the
Head of HR to assess the candidate’s suitability vis-a-vis
the Bank’s benchmark requirements for the specific role. All
shortlisted candidates are subject to a preliminary interview
with the Head of HR, followed by subsequent interviews with
HR and the line manager, with successful candidates moving
onto the final interview with the respective line corporate
management member. Candidates for senior roles are further
filtered through a fourth and final interview with the Bank’s
MD&CEO and/or CBO/COO.
Developing our vision of a workforce prepared for
the future
At City Bank, our human resource policy is a major enabler of
the Bank’s strategy in delivering for its people and is based
on our vision of developing a workforce that is future-ready,
which is at the heart of our workforce futurization focus. At
the core of this strategy is the notion of achieving sustainable
leadership by realising our people vision of positioning the Bank
as an employer of choice that recruits, transforms and retains
talent and skills. Hence, our people promise influences the
culture of the Bank and reinforces the factors that distinguish
our employee value propositions from those of competitors.
We have long thought that sound employment procedures
help in the recruitment of talented individuals. In order
to attract and retain high-quality people in a competitive
business environment, it is essential that we promote City
Bank positively as a model employer and an employer of
choice.
Employer branding and candidate/recruitment management
are overseen by a specialised HR wing of the Bank. Several
creative programs and activities have been established to
strengthen City Bank’s employer brand and hence facilitate the
recruitment of qualified candidates best fit for the Bank. Such
signature programs include campus activities, recruitment
of management trainees and interns, the “Meet the CEO”
program, etc. These platforms not only aid in supporting
Annual Report 2022
31
Integrated Report
Impact to the business and stakeholders
a seamless onboarding process, but also in fostering a
relationship with the institution and establishing a clear path
for professional advancement.
In addition, social media management is crucial for enhancing our
employer brand and establishing brand credibility. At the Bank,
the strongest indication of our robust HR procedures is the regular
recognition we receive from global and national institutions and
organisations, which only encourages us to develop even better
and more robust HR processes and practices.
Our main employee value proposition is making work enjoyable
and rewarding, which is the primary driver of talent acquisition,
engagement and retention. This value proposition is founded
on the notion of providing our employees with a balanced
performance-reward framework that recognises employee
accomplishment and exposes them to a variety of opportunities
for skill development, learning and professional growth.
City Bank’s remuneration and benefit structures are designed
to attract, motivate and retain the best in-class talent.
Towards this end, the Bank’s salary structures aim to strike
the optimal balance between primary job requisites and
industry benchmarks and statutory labour laws of the country.
Bench strength
Nos.
2021
Permanent employees
Trainees
Male
Female
Total
Male
Female
Total
3,900
639
4,539
4,179
687
4,866
820
284
1104
905
312
1217
Nurturing an adaptable, creative and engaged
talent pool
Our personnel management strategy assists the Bank in
attracting and retaining the most talented and competent
workers. It also adds to the advancement of our transformation
by fostering ongoing resource growth. Continuous learning,
which enables our staff to adapt to a fast-paced and everchanging environment, is a vital component of this strategy.
As such, we advocate a robust induction, training and
development policy that aims to:
•
Transform our business
•
Manage talent, encourage innovation, share knowledge,
and identify key employees in various areas across the
organization
•
Embed our culture in accordance with the Bank’s values
and governance standards, which include our corporate
culture and code of conduct
•
Transform our business through transforming our
workforce, thus ensuring readiness for the future
The year 2022 was a significant one for the Human Resource
Division (HRD) of the Bank, as we embraced various initiatives
that were fundamental to the development and sustainability
of the organization. Throughout the course of the year, HRD
undertook a number of significant initiatives aimed at bridging
the gap between management and employees and fostering
greater trust and communication. This was useful in two ways:
32
Annual Report 2022
2022
•
It facilitated quicker decision-making and implementation
•
It enabled greater concentration on both, the team and
individual goals and objectives
Hence, in 2022, our strong and unified team spirit enabled
us to create a collaborative, agile, resilient, and solicitous
workplace environment that enabled our people to attain their
highest level of performance, aided by an array of resourcedriven interventions.
Establishing a closer match with our values through the Bank’s
Value Ambassadors and Value Champions
The values of City Bank govern our actions and daily behaviour,
allowing us to build a culture that is distinctive to the Bank.
Indeed, our principles are the organisation’s genetic code,
uniting personnel across levels and locations. Our success is
based on our ambition of becoming a financial supermarket
and fostering a winning culture driven by our key values of
being:
•
Driven by results
•
Motivated and inspired
•
Responsible and open
•
Courageous and respectful
•
Client-centric
The initiatives of the Bank in ‘Value Ambassadors’ and ‘Value
Champions’ demonstrate our distinctive approach to human
Employee learning, training and capability
development
Our five Value Ambassadors and fifteen Value Champions
carried out the “Living the Values” HR campaign in 2022.
The campaign included more than a hundred seminars and
orientations on our values, reaching 2,000+ individuals. The
Ambassadors and Champions met and engaged with the
teams to address a variety of subjects, including fostering the
appropriate mentality, building our culture, living our values as
daily habits, health and safety, work-life balance, and the path
forward for years ahead.
To meet the learning needs and requirements of various
divisions and to ensure our competitive differentiation, yearround events were organised under a variety of categories
during the year, such as specialised learning interventions,
need-based training solutions, compliance training programs,
and orientation programs for new recruits, etc. These
supported the transformed learning needs of the Bank’s
various divisions and exhibited HRD’s continued commitment
to fostering a culture of learning, development and growth.
At City Bank, learning and training comprise our central
strategy for talent development.
66
330
79
Soft skill sessions
organised covering 2,221
participants
Functional training sessions
organised covering
11,648 participants
General training sessions
organised covering 4,564
participants
Total participation is inclusive of multiple attendance of an individual employee
Description
2021
2022
Avge. training hours per employee
10.01
10.09
No. of people provided training
5,077
5,203
In 2022, the Learning & Development Team’s (L&D) key focus
was on altering the learning experience using digital platforms,
in addition to traditional classroom learning initiatives. In
2022, 147 specialised training sessions were organised with
1,880 participants covering 12 critical topics. Furthermore,
large pan-Bank learning initiatives via classroom and digital
platforms were carried out in accordance with the calendar
and the Bank’s training needs, respectively.
Evolution of the learning platform
In 2022, the L&D Team launched virtual platforms and
e-learning modules to optimise the impact of learning outside
the classroom. In addition, during the year, in order to address
the diverse learning requirements of the Bank’s numerous
divisions, a variety of digital learning solutions were launched
to cover all of the Bank’s wings and departments.
172
11
Live webinars organised covering
7,216 participants
e-learning programs organised
covering 1,217 participants
Annual Report 2022
33
Integrated Report
resource management. These initiatives exemplify the genuine
essence of City Bank’s values and shape the culture we wish to
foster by demonstrating and promoting the main behavioural
indicators of our values as inseparable components of our
daily office life.
Classroom training
Amid the pandemic, it was difficult to plan classroom training
sessions keeping all safety precautions; yet, a considerable
proportion of modules required physical exercise due to the
nature of the learning interventions. These training sessions
were nonetheless organised in compliance with government
safety rules. However, with the easing of the pandemic during
the year, the spotlight was put back on full-fledged classroom
training and studies.
292
Classroom sessions organized
covering 10,000 participants
Management Trainee Program
The Management Trainee Program was developed by City Bank
as part of its efforts to involve and engage young people in a
real business setting. Further, in order to meet the Bank’s future
talent requirements, trainees undergo a demanding, 1-year+
training program. Trainees are thereafter assigned to various
corporate activities so that they can comprehend the actual
challenges and prospects of the business. During their time as
trainees, they are allocated to cross-functional divisions under
the supervision of executives. Each also has access to essential
training in functional and soft skills. Our senior leaders provide
advice along their journey by sharing their own experiences.
In 2022, 18 Management Trainees were hired after they
successfully graduated from the program in the current year
(2023).
18
Management Trainees joined the
Bank in 2022
Rewards and recognition
City Bank strongly believes that employees who are recognized
exhibit higher performance levels.
The year 2022 marked a turning point for our rewards and
recognition (R&R) program, since it was the second year of
the program execution following the implementation of the
formal R&R policy and framework. This structure intends to
34
Annual Report 2022
partially decentralise the recognition process, hence boosting
the frequency of recognising and emphasising excellent
performance. We feel this will go a long way towards fostering
a happier, more joyous and more spirited organisation built on
gratitude and appreciation.
We are delighted that despite facing numerous obstacles
throughout the year, our personnel remained focused on their
goals and achieved success. Over 2,500 employees were
recognised and rewarded for their significant contribution and
dedication throughout the year, in acknowledgment of their
commitment, hard work, efforts and loyalty.
Gender empowerment
At City Bank, our ongoing initiative of engaging female leaders
in various committees to discuss work-related issues and
provide ongoing support to them has fostered a profound
sense of safety and belongingness among our female
employees to the Bank, thereby establishing a solid and secure
platform for ongoing dialogue and engagement. Under our
hallmark program on the prevention of workplace harassment
– “Speak Up” – we have implemented a Bank-wide awareness
program, targeting separately branch managers, department
leaders, and all female employees.
Twenty-five Speak Up events and orientations were organized
in 2022, reaching a large number of Bank employees, which
contributed to enhancing the sense of mutual-respect, privacy
and unity at the workplace.
Grievance redress
To maintain a sustainable and progressive workplace
environment and culture, the Bank’s HRD fosters a Grievance
Management Policy that assists in addressing and resolving
complex and sensitive workplace-related complaints,
bereavement, etc., while providing a transparent and stressfree office environment. The policy encourages workers to
be fair and responsible when raising issues in a timely and
effective manner, thereby adding to the Bank’s reputation as
a great place to work, as well as in facilitating constructive
criticism for collective and fair debate and growth.
Employee relations
City Bank remains committed to ensure that employees have
the opportunity to connect with their respective superiors and,
where necessary, the Bank’s leadership. The Bank has always
maintained an open door policy that encourages two-way
dialogue between employees and the management. Various
The annual performance reviews are key channels for
employees to connect with their seniors to discuss concerns
regarding their work or job roles. Beyond this, the Bank has
assigned certain ManCom members to maintain engagement
in order to mentor and develop high performers.
personnel for their recruitment, training, payment of salaries
and other benefits, as well as assessing their contribution to
the growth and profitability of an organisation. Specifically, it
is the concept of discovering and measuring data pertaining
to human resources and presenting this information to
leadership in order to facilitate informed decision-making. The
pandemic environment necessitated a more comprehensive
assessment of employee demands, which heightened the
Apart from this, the Bank also has an annual activity calendar
which is designed to encourage employees to interact with the
management and colleagues in an informal setting, such as
cricket tournament and other indoor and outdoor activities.
significance of this factor.
Employees have the right to escalate any work related concerns
they may have directly to the Head of HR or the Manager HR Operations. The Bank’s CBO/COO are kept informed of all
grievances and thereafter directed to the relevant management
committee member for appropriate action.
instrument that enables us to align our resources with
Human Resource Accounting
adhering to the key concepts of HRA, we view it as a source of
Human Resource Accounting (HRA) is the process of
allocating, budgeting and reporting the cost invested in
HR strategy and platforms, but also in terms of determining if
HRA’s significance at City Bank
At City Bank, we feel that HRA is a crucial investment and
prevalent needs, hence allowing us to analyse training needs
and pinpoint opportunities for specialisation and human value
addition. Our most valuable asset are our people, who assist
us to realise our business goals and objectives. Hence, by
value, not only in terms of informing us of the usefulness of our
investments in these are yielding the anticipated results.
Particulars
Revenues [A] (BDT mn)
Salary and other benefits [B] (BDT mn)
Net value-add [A-B=C] (BDT mn)
Number of employees [D]
Net value-add per employee [C/D=E] (BDT mn)
2022
24,588
7,002
17,586
4,866
3.6
2021
21,403
6,094
15,309
4,539
3.4
Other benefits includes all direct and indirect benefits extended to employees
Future roadmap
•
Expand the pool of internal specialist trainers in selected areas such as Operations, Credit and Recoveries in order to build a
cohesive performance-driven culture across the Bank
•
Augment the employee value proposition (EBP) by enhancing the employee digital experience, among others
•
Focus on retention of top talent and high-performers
•
Continue to ensure alignment of compensation to industry standards
Impact on other capitals
Performance-driven
culture supports the
business strategy
to achieve higher
financial outcomes
Learning and development
interventions help
employees to become
more productive through
better use of resources
Empowered employees
are better equipped
to deliver the Bank’s
value proposition to its
customers
Annual Report 2022
35
Integrated Report
routine team briefings, held weekly and monthly, are also
meant to facilitate employee interaction and foster team spirit.
SOCIAL & RELATIONSHIP CAPITAL
Social and Relationship Capital is made up of the relationships the Bank has built over the years with
customers and the wider society, including community. Our social landscape influences our strategic
approach at City Bank. We endeavour to engage constructively and have a significant impact on our social
landscape, including on our customers and community. With strategic initiatives that provide reciprocal
benefits for our organisation and our stakeholders, we assure the long-term sustainability of our business.
Impact to the business and stakeholders
Creates the ecosystems
for the Bank to sustain
and grow its core
business within markets
Provides the impetus for
timely and relevant
improvements to
digital-physical channel
Reinforces the City Bank
brand position in the
national banking sphere
Helps the Bank to invest
in more effectively
building employee
capacity and capability
Our customers
Product stewardship
In its dealings with interest-related financing activities, City
Bank’s commitment to responsible product stewardship is
guided by ethical and moral standards. Therefore, as required
by the Bank’s service framework, the Bank’s products and
solutions are planned and developed in strict accordance with
all regulatory rules and requirements. Keeping in mind these
essential principles, the internal product innovation function
collaborates with appropriate business divisions to enhance
and grow the product suite by introducing viable alternatives to
existing financial solutions in the market.
In this sense, the Bank’s product development cycle attempts to
offer comprehensive solutions to meet the specific requirements
of its diverse customer base. The key to obtaining this level of
36
Annual Report 2022
congruence is based on a precise segmentation of customers and
a detailed analysis of the requirements of each category. Women
entrepreneur financing scheme under the City Alo platform,
in addition to a number of other products, such as digital nano
loan and Islamic DPS product under City Islamic, etc., are major
additions to the Bank’s product suite over the years.
Today, our product and service portfolio spans a wide range
suite of retail deposit and loans products as well as loan
products for other economy constituents such as large,
medium and small corporates, etc. Our full product and service
list is given elsewhere in this report.
Customer digital experience
As a result of a growing emphasis on strengthening the
digital banking experience for clients, City Bank is increasingly
concentrating on developing solutions that enable customers
This eliminates the need for customers to visit a branch. The
incorporation of a dynamic support function on the corporate
website enables customers to conveniently initiate their retail
financing requirements online, with access to comprehensive
information on various key areas and the concerned person’s
e-KYC and
onboarding
Self-registration
Bill payments
Customer communication and engagement
The Bank endeavours to promote responsible banking, a key
part of which is our sales staff collaborating with customers to
understand their financial needs and promote solutions that best
meet their requirements while taking their possible risks into
account.
Our promotional campaigns also reflect these underlying
ideals and seek to inform customers about the advantages
of utilising our banking products. Hence, all information on
products and services is given in a straightforward, lucid and
transparent manner so that clients may make well-informed
judgments. In addition, the Bank’s knowledge management
focus also helps foster financial literacy and market awareness
to educate the general public on the Bank’s product lines and
its competence in this field.
Client privacy
City Bank recognises that protecting the privacy of customer
information is essential for fostering trust. Hence, the
Bank gathers only the information required by law, which
is also done via the KYC (Know Your Customer) form. This
collected customer information is maintained in the Bank’s
database, archived and protected by numerous levels of
physical, electronic and procedural measures and safeguards
to prevent unauthorised access. In addition, staff receive
contact information, should they require additional support.
Arguably, the most significant breakthrough in enhancing the
Bank’s digital presence was the launch of the Citytouch app
for retail clients. The functionality and features of this app,
which is downloadable on both the Android and iOS platforms,
are likewise replicated on the online platform available via the
Bank’s corporate website.
Fund transfer
Investment
OTP validation
frequent training on the significance of maintaining client
confidentiality and privacy, and disciplinary mechanisms are in
place to enforce employee privacy duties. Moreover, City Bank
does not disclose customer information to third parties unless
required by law. There were no incidents involving a breach of
client privacy in 2022.
Our communities
Social upliftment
City Bank believes that its social responsibility is interwoven in
its business, and community service is as critical as customer
service. Towards this extent, the Bank runs a number of
programs and initiatives that lend a helping hand to lift the
community, be it through endeavours in education, healthcare,
civic beautification or distribution of provisions amongst
backward households, an activity that was accelerated
during the pandemic. The full description of the Bank’s social
responsibility initiatives are given elsewhere in this report.
SDGs alignment
The Bank measures and aligns its community impact to the
Sustainable Development Goals (SDGs). It contributes to the
furtherance of many of these goals and thus not only supports
community investment across a broad society but also helps
in national development. The SDG alignment to community
impact is given elsewhere in this report.
Annual Report 2022
37
Integrated Report
to complete a variety of banking chores remotely at their
convenience.
Future roadmap
Customers
•
Invest in creating unique solutions to enhance the customers’ digital experience and help build trust
•
Diversify the product basket to drive more focused customer segmentation
Community
•
Deliver sustainable solutions in the face of basic community shortages through our socially responsive CSR model
•
Aim to develop industry leading solutions to make a strong and high-impact contribution to the SDGs
Impact on other capitals
Enhancing the overall
customer experience
provides the opportunity
for the Bank to grow and
diversify revenue streams
38
Annual Report 2022
Insights gained from
customers help to prioritise
the Bank’s investments
across physical and digital
channels
Feedback from customers
helps to build employee
capability by improving
training and learning and
development
Integrated Report
INTELLECTUAL CAPITAL
Intellectual Capital represents the unique attributes that differentiate City Bank from competitors. At
the Bank, we believe that an important driver of economic value is how we manage and utilise our
assets and adapt to change to derive the most effective use of our resources while remaining relevant
to the interests and objectives of our clients. Having a sound business strategy is essential, but agile
execution of that plan is even more crucial. We achieve this by harnessing and continually pushing our
Intellectual Capital to remain relevant and continue on our road to sustainable value creation.
Impact to the business and stakeholders
Enhances City Bank’s
competitive position in the
domestic banking sector.
02
03
01
04
Builds trust among
customers and the wider
community.
Building a strong pool of tacit knowledge
The experience and expertise of the City Bank team is a key
competitive advantage for the business, especially considering
that over 75% of our employee workforce has been with the
Bank for over 5 years, and over 25% for the past decade.
As part of our HRD’s emphasis on learning, training and
development, the Bank invests continually in employee
exposure to professional advancement and targeted capacitybuilding initiatives to enable our teams to upgrade their
Drives operational
efficiency and better use
of physical assets.
Strengthens employee
dedication and commitment
towards the business.
skills not only in their respective fields of expertise, but also
in complementary areas that could potentially broaden their
thinking horizons. As part of our comprehensive strategy for
enhancing employee knowledge, we urge our staff to pursue
continual professional development.
City Bank’s renowned leadership and management with
seasoned experience and expertise is among the top C-suite
teams in Bangladesh’s corporate sector, and this is one of the
Bank’s biggest advantages for forging ahead with strategic
thinking and new initiatives in a competitive environment.
Annual Report 2022
39
2021
Employees with 5 years of service tenure
Employees with 5-10 years of service tenure
As a practitioner of the non-interest based banking model
in the sphere of Islamic Banking and following all regulatory
norms and laws in other realms of our banking suite, culture
and ethics are integral to the management of City Bank’s dayto-day business operations.
The Board sets the tone for instilling culture and ethics at all
organisational levels. In this regard, the Board-approved Code
of Conduct establishes a standard with which all workers must
abide. The code is a comprehensive document that outlines
acceptable employee conduct in the workplace, including
precise methods for the prevention of bribery and corruption.
The efficacy of the Code of Conduct is bolstered by a Boardapproved disciplinary mechanism for handling infractions of
ethical conduct. In addition, the Whistle-blower Policy adopted
by the Board provides an impartial mechanism for internal
and external stakeholders to report any sort of malfeasance.
In addition, as part of the continual reinforcement of ethics
organisation-wide, training is provided to all Bank teams at all
levels in the area of AML and CFT compliance; this training is
mandatory.
Brand trust and reputation
City Bank is one of the longstanding financial institutions of
Bangladesh, being incepted 40 years ago. With a significant
history and heritage, the Bank is amongst the top private
sector commercial banks in Bangladesh and operates
following all regulatory norms, principles and guidelines.
Further, the Bank also has a robust Islamic banking business,
which is fully based on Shari’ah principles, it being completely
disengaged from any interest-based transactions.
Annual Report 2022
1,228
2022
Values, culture and ethics
40
708
2,930
1,235
668
2,636
Employee profile
Employees with 10+ years of service tenure
City Bank has earned the trust of hundreds of thousands of
Bangladeshis over the past decades, thanks to its disciplined
approach to delivering the full spectrum of banking solutions,
including Retail Banking, CMSME Banking, Corporate Banking,
Islamic Banking, Treasury and Trade Financial Services. In
addition to offering a wide spectrum of mainstream banking,
City Bank’s emphasis on supporting vulnerable communities,
such as by sponsoring many CSR projects, has earned the
Bank’s brand a reputation for its desire to give back to society.
City Bank it also renowned for being a front runner in digital
financial services. The Bank has successfully conceptualised
and launched a number of new and innovative digital banking
products such as a digital nano loan in association with
bKash, which is Bangladesh’s largest and most entrenched
mobile financial services company. The product offers a micro
loan to eligible bKash customers directly in their wallet and
charges a relatively nominal interest rate to be repaid in easy
instalments.
The Bank’s successful ability to forge such strategic and
relevant partnerships represents a huge point of optimism
as it not only attests to the Bank’s capability to forge
complementary partnerships, but also serve customers in the
spirit of fostering financial inclusion and economic mobility.
Such an endeavour contributes to further building the Bank’s
brand as one of the most trusted and reputed financial services
provider of Bangladesh.
Business support
Business support through our IT wing offers vital backend support
for the day-to-day operations of the Bank. In 2022, support
systems were further bolstered with a view to supporting the
business continuity amidst macroeconomic challenges.
Process automation remained a major priority, with the
following initiatives being implemented during the course of
the year:
•
Introduction of the e-KYC solution whereby customers can
complete the KYC online without having to visit the branch
•
Implementation of RPA to automate the customer account
opening
•
•
•
Upgradation of the core Islamic Banking system from
Ababil to Ababil NG
•
Launch of Learning Management System (LMS) software
application to ensure mandatory/regulatory training
programs being conducted through a robust platform
•
Conceptualisation and implementation of Human Resource
Management System (HRMS) to elevate service levels of
the HR division for stimulating workplace productivity
Future roadmap
•
Reinforce City Bank’s unique brand identity as one of
Bangladesh’s most digitally-equipped commercial Bank,
while retaining its strong traditional values of customer
excellence
Custodial Services automation to augment service
standards to Non-Resident Bangladeshis, foreign
individuals, etc.
•
To be positioned as a national Bank by making the strongest
impact towards improving the country’s economic, social
and environmental indicators
Launch of the CBLMT remittance app to simplify the
remittance transfer procedure, facilitating customers to
send money using their own smart devices
•
Continued delivery of a secure and safe technology
environment focused on safeguarding systems and
protection of sensitive customer data
Impact on other capitals
Strong competitive positioning enables the
Bank to consistently improve its financial
position and performance
Robust provision of required system support
helps assist the performance efficiency of all
delivery channels
Safeguarded and secure operations helps build trust with customers, regulators, business
partners and the community
Annual Report 2022
41
Integrated Report
The Treasury processing unit maintained settling weekly
obligatory export proceeds/worker remittances with the
regulator. The Unit continues to guarantee that US Dollar
commitments were met in whole and on schedule to assist
the Bank in satisfying its financial responsibilities, despite
the fact that the FX market was experiencing unprecedented
difficulties due to the country’s diminishing USD reserves.
NATURAL CAPITAL
Being a service organization, City Bank uses natural resources to a lesser level than other businesses.
Notwithstanding this, the Bank is dedicated to mitigating the loss of Natural Capital. Hence, maintaining
the natural resources we rely on to operate our business is not only a green aim; rather, it is an
overarching commercial reality that will determine our long-term success. In addition to minimizing
our negative effects to climate change, we work to ensure that our business is resilient in the face of
climate change and ensures adaptability to the climate.
Impact to the business and stakeholders
Drives innovation to enable
the Bank to penetrate new
customer segments
Builds trust among customers and the
wider community, which has a direct
correlation with the business
Elevates the Bank’s reputation as
a sustainable and green financial
services institution
Green financing solutions
City Bank operates on the premise that the best approach for
the Bank to contribute to the preservation of Natural Capital
is by providing personalised green finance solutions to diverse
client groups. A few years ago, the Bank took the first move in
this direction by providing funding to SME clients to facilitate
their transition to renewable energy. By empowering more
customers to reduce their dependence on non-renewable
energy in this manner, the Bank intends to contribute to the
long-term reduction of greenhouse gas (GHG) emissions and
support Bangladesh’s Paris Agreement position.
Green Asset Ratio
2021
Green Finance
Sustainable finance also compromises green finance.
42
Annual Report 2022
19.0%
5.9%
4.1%
18.6%
As % of total loans disbursed
2022
Sustainable Finance
Although City Bank’s primary business does not directly rely
on natural resources, the Bank’s day-to-day activities and
operations indirectly affect the environment through waste
production. Thus, the Bank focuses on responsible waste
management through collaboration with sustainable service
providers that share its values. In addition, with its emphasis
on digitalisation and process automation (including RPA), the
Bank is striving to eliminate waste.
Furthermore, by promoting its Citytouch mobile app, online
account opening platform, SMS alerts, e-statements, PIN
via SMS, as well as a variety of such services accessible via
the platform, the Bank continues to encourage customers to
switch from traditional banking methods to modern banking
methods that reduce resource waste.
The Bank endeavours to develop a “green” culture amongst
its employees through the provision of regular training
programmes that create possibilities for awareness and
education around reducing the Bank’s carbon footprint and
contributing to the conservation of natural resources.
Future roadmap
•
Systematically expand the scope of the Bank’s lending
model to focus on growing its green asset portfolio and
also promote investment in rooftop solar generation at
suitable branches
•
Pursue partnerships to create sustainable, industryleading solutions to issues such as climate change,
waste, water and energy management and biodiversity
conservation
Impact on other capitals
Higher market share in the green financing sphere will help to drive additional revenue and
profit targets and also burnish the green credentials of the Bank
Provides the opportunity to introduce innovative solutions to switch to modern
banking models
Annual Report 2022
43
Integrated Report
Resource management
STRATEGY AND RESOURCE
ALLOCATION
Engaging in prudent resource management
City Bank helps individuals and organizations improve their
sustainability by ensuring what is most important to them.
In this manner, we ensure that our customers can meet their
aspirations, needs and expectations through the products and
services we provide to them. This is an essential component
of our strategy in building the right product-market fit.
Our strategy directs our day-to-day activities in order to
generate long-term benefit. It focuses on addressing the
demands of our customer groups, while maintaining the
profitability and sustainability of our business. The objective
of our business strategy is to provide innovative client-centric
solutions while maintaining sound corporate governance
practices. Our exceptional human resources, powerful brand
equity, expanding selection of digitalised products, and solid
balance sheet and financial foundation set us apart from
competitors and new entrants. In addition, our agile, highengagement strategy enables us to develop solutions based
on an in-depth comprehension of our customers’ needs and
wants. Our strategy enables us to compete successfully
while guaranteeing that resource allocation is one of the
cornerstones of our strategic framework.
Notably, our resource allocation tactics are predicated on their
capacity to effectively achieve our pre-determined goals.
We engage in detailed and collaborative planning to ensure
that we disburse growth capital optimally to those business
sectors that either support our profitability ambitions or have
a strong growth prospect or meet broader environmental,
social and governance goals. We recognise that capital is
finite and valuable, and as a result, we prioritise prudent and
evidence-based capital allocation in order to fulfill our return
on capital targets.
We feel that the allocation of finance and resources has taken
on greater significance in light of the pandemic and the war
in Ukraine, which has created deep uncertainty and drummed
up fears of a global recession. Businesses must rebalance
their resource allocation framework to achieve better and
more stable outcomes at lower capital requirements as they
revise and reorganise their strategies to ensure the continued
effectiveness of their operating model and their continued
focus on the creation of sustainable stakeholder value.
44
Annual Report 2022
Digital app vs. development costs: A example of strategic
capital allocation
The creation of a digital app, Citytouch, has revolutionised
the way customers engage and interact with the Bank. This
is one of the most obvious instances of our cautious capital
deployment approach, weighing in the costs and benefits
on a comprehensive basis before making any investment
commitment.
By conducting a strategic analysis of what our app can achieve
for our customers and the cost of developing and maintaining
such an app, we determined that the advantages surpass the
development costs. First, by digitising our products, we have
created the ability to reach a far larger number of clients who
may find it difficult to access our service network, them being
located in more remote and mofussil regions. Hence, any
additional customer acquisition would be an advantage that
would help us accelerate payback and, most importantly,
help the country meet its financial inclusion goals.
Moreover, by launching a digital app, we have demonstrated
our confidence regarding the manner in which e-commerce
and digital ecosystems could flourish in the country.
Undoubtedly, the pandemic has hastened digital adoption
in Bangladesh, as consumers and users become more
habituated to digital devices and apps gain confidence in the
payments system. Notably, our funding allocation for app
development was sensible and proactive, taking into account
the government’s “Smart Bangladesh” objectives and the
expanding penetration of smart-phones and broadband in
the nation.
Allocating funds for impact finance
Being one of the oldest banking businesses in Bangladesh,
we have gained sound knowledge of the country’s growing
financial services sector.
Through extensive consultations with our clients and indepth analysis of their needs and requirements, we were
able to foresee that while microfinance was a pressing need,
no major company had made concerted efforts to develop a
product that would fully address the needs and expectations
of this set of customers who could access a small ticket loan
We developed a comprehensive partnership with bKash that
would help these customers access a nano loan digitally and
directly to their bKash wallet. We created mechanisms to
harness the data available with registered bKash customers to
check their creditworthiness and hence ensure their eligibility
for an instant loan. Such a paperless operation also creates a
template for the future of finance and loan disbursement.
Thus, at City Bank, we are always focused on taking a bold
step forward to identify needs and gaps and to support our
customers by developing relevant, affordable and regulatorycompliant products and solutions, while also building our
infrastructure and competencies to serve our customers
with sensitivity and diligence, in conjunction with a focus on
business growth and profitability.
Fostering a winning team
City Bank has always acknowledged the significance of establishing a successful team, and as
a result, it has stayed committed to presenting a comprehensive employee value proposition
in order to recruit, motivate and retain the perfect team.
In 2022, the Bank continued to reaffirm its commitment to the team by supporting coworkers in a variety of ways and assisting them in overcoming the obstacles posed by the
ongoing economic challenges. To ensure the financial well-being of employees during these
challenging times, the current wage structures were re-scaled, especially in the face of
inflationary pressures. This is also an example of prudent capital allocation and management
at the Bank.
Annual Report 2022
45
Integrated Report
to make a difference in the lives by tiding over an emergency,
or meeting a personal obligation.
THOUGHTFUL
Impressions
GLOWING
Expressions
40 years of shining light on
women empowerment!
At City Bank, we understand our customer. She is motivated, determined and ambitious. She
loves the thrill of self-realization. She does not need a bank to achieve her goals. But rather a
financial partner who is thoughtful, considerate and dedicated to her potential. And once she
finds such a confidante, her glowing expressions show how far she has come. Welcome to City
Bank’s City Alo programme. A platform that has created a luminous revolution in women
empowerment through financial inclusion!
Impressions & Expressions
NATIONALISTIC
IMPRESSIONS
BUDDING
EXPRESSIONS
40 years of giving flight to hopes and aspirations!
At City Bank, we believe we are in the business of building trust. Trust in the future of
Bangladesh. The nation has been a true economic miracle. And over the decades we
have burnished our nationalistic and nation-building credentials through helping finance
core infrastructure. Such as power plants that are the lifeline of the country. Today, we
are also exploring new avenues to enhance our contribution to public infrastructure
development. Just so that young budding hopes and dreams can fly high in the sky, just
like a kite!
48
Annual Report 2022
Impressions & Expressions
49
Annual Report 2022
CONSCIENTIOUS IMPRESSIONS
CONTENTED EXPRESSIONS
40 years of celebrating earth day every day!
At City Bank, we have not only prioritised the planet. But its inhabitants as well. Hence, our
focus on climate action is meshed with our efforts in social change. Ensuring clean and
fresh air and green surroundings is important, which we ensure through responsible green
finance. But so is building the society through the pillars of education, healthcare and clean
living, which we promote through our social citizenship initiatives. We are also looking to a
net-zero future that has been made possible through our well-timed membership of
Net-Zero Banking Alliance. These initiatives reinforce our belief that being conscientious is
the only way to contentment!
50
Annual Report 2022
Impressions & Expressions
51
Annual Report 2022
52
Annual Report 2022
40 years of bringing the City
to cover the whole nation!
At City Bank, we have the mind of a financial institution, but the soul of a digital enabler.
We are a Bank, but we are all about bringing the convenience of banking to our
customers’ front door.
So today, City Bank customers can use our award-winning digital banking app
“Citytouch”for their daily financial transactions and banking activities. Such as shopping
from leading retailers, paying utility bills, transferring money to their bKash account,
paying school fees, opening an FD, or simply buying air tickets for their next holiday.
Easy! Further, our other diversified payment options are not payment options, but rather
lifestyle conveniences.
So, our modernized and secure tech systems facilitate a plethora of payment options for
our customers, such as American Express credit or debit cards, POS, QR code,
e-commerce payments, etc.
Ensuring that a City can truly cover a nation!
Annual Report 2022
53
Impressions & Expressions
DIGITAL IMPRESSIONS
DELIGHTFUL EXPRESSIONS
54
Annual Report 2022
SOLID
Impressions
JOYFUL
Expressions
40 years of supporting economic
and social mobility in Bangladesh!
At City Bank, we are devoted to trade and progress.
Not just for the top echelons of corporate Bangladesh.
But also for tradespeople from various walks of life.
From large institutions, to farmers, to traders, to small and medium enterprises, to the
marginalised, to those engaged in micro vocations.
We truly believe in unity in diversity. Thus, though our offering may be diversified, we are
united in our purpose of making banking easy, convenient and accessible to all. For instance,
our “Digital Nano Loan” represents a significant breakthrough in Bangladesh’s banking sector.
Combining the best of microfinance with the best of digital banking. For us, credit is not just
about creating liquidity. But also solidity.
Solidity of relationships!
56
Annual Report 2022
Impressions
JUBILANT
Expressions
40 years of reaching out to Bangladeshis not only
in Bangladesh but also rest of the world!
At City Bank, we believe in spreading our wings far and wide.
Not only to ensure that we are just around the corner for our customers through our
branches, ATMs, and Agent Banking outlets that are spread around the country.
But also to facilitate a small step somewhere to become a giant leap for someone.
The step of work migration to support dreams and aspirations back home – education of
a child, marriage of a sibling, or house purchase for the family.
We make this possible through our foreign exchange remittance service via CBL Money
Transfer, a Malaysia-based subsidiary of City Bank.
To ensure further ease of cross-border money transfer, we recently introduced the
“CityRemit” app through which remittance can be sent securely, swiftly and safely.
City Hong Kong, another subsidiary, has also helped brighten Bangladesh’s image in the
global financial arena. Ensuring we are here, there and everywhere!
Annual Report 2022
57
Impressions & Expressions
DIVERSE
CITY BANK
AT A GLANCE
Employees
4,866
Branches
133
No. of Merchants
50,000+
Operating Profit
11,827 mn
Net Profit
4,508 mn
SME-S Unit Offices
116
Earnings per Share
Tk. 3.8
No. of Customers
2.4 mn+
Priority Centers
7
No. of POS
33,607
Credit Cards issued
610,000+
Agent Banking Outlets
690
58
Annual Report 2022
Return on Equity
14.1%
Return on Assets
1.0%
Contribution to national
exchequer
10,633 mn
Loans & Advances
354,774 mn
Impressions & Expressions
Deposits
331,890 mn
ATMs & CDMs
415
Market Capitalisation
26,173 mn
Dividend, 2022*
10.0% Cash
2.0% Stock
CBL Money Transfer Sdn. Bhd
Malaysia
15 branches
Gross NPL
3.9%
City Hong Kong Limited
Hong Kong
1 representative office
Provision Coverage
104.7%
Exports
$ 2,642 mn
Imports
$3,924 mn
Remittances
129,702 mn
Total Capital Ratio
14.5%
Tier-I Ratio
9.6%
All figures are for the year 2022 in BDT, unless
otherwise stated.
* Subject to approval
Annual Report 2022
59
OUR FLYWHEEL
Sound long-term economic
prospects
the Bank of the Future
Build
tal
igi
d
r
ou tion
a
FOSTER
Compliance with
conformance
Downscale costs
EVALUATE
Systems and
processes for
internal control
OUR FLY
WHEEL
MEASURE
Performance against
expectations
FORTIFY
Our teams through
up-skilling
BUILD
Sustainable
competitive drivers
PRIORITIZE
Responsible lending
and financing
o
pr
I m re s t
e
i nt
s
cu
to
ve
m net
ar
gin
ify
ers
Div
DIVERSIFY
The product offering
for customer value
m
er
ba
se
E n s u re l i q u i d i t y
m a n a g e m e nt
Government policy reforms
for improving business
60
Annual Report 2022
Advantages of a young and
attractive demography
TRANSITION
The business
towards profit
recoverability
Capitalise on
credit recovery
Mega infra creation improving
business outlook
Bu
ild
o
fo n
un
d
r
ou
nt us
c
fo
Au
g
ES me
G
Hong Kong and serve various customers, thus facilitating
bilateral trade and commerce between Bangladesh and
these countries
Across Bangladesh…
Being at the heart of Bangladesh, we take a leading role in
supporting our customers and communities to navigate the
transition into global endemicity and a sustainable future. In
doing so, we are supporting a country that is fast-transforming
its economic profile to usher into the ranks of a middle-income
country over the next few years. Thus, significant headroom
exists for growth, especially in meaningfully serving a large
unbanked and underbanked population.
City Bank provides the full suite of conventional and Shar’iahcompliant financial products and services in wholesale, retail
and SME banking through its wide service network of 122
branches located strategically across Bangladesh. In addition,
the Bank’s diverse channels that enable convenient customer
access include 11 agri branches, 12 sub-branches, 116 SME-S
unit offices, 690 agent banking outlets, 7 priority centers, 351
ATMs and 64 CDMs (as on 31 December 2022). This network
effectively covers the length and breadth of Bangladesh.
STRONG FOCUS ON UNDERSERVED SEGMENTS
•
We are well-positioned to foster a larger impact in Islamic
finance through 100% Shar’iah compliance, and our ability
to develop innovative products such as Islamic DPS.
•
We are entrenching our pioneering presence in other
segments such as City Alo Women Banking and Employee
Banking through our unique customer offering, best-inclass customer experience and digital distribution, among
others.
SUSTAINABILITY-DRIVEN FOCUS
•
We are driving the decarbonisation agenda by building
transition finance capabilities, especially in the areas of
green and sustainable finance.
•
We are focusing on reinforcing our capabilities in
sustainable finance, especially in the areas of business
development and credit screening.
Our key strengths are what set us apart from others and
enable us to create sustainable value for our shareholders.
A TRULY REGIONAL BANK WITH GLOBAL ACCESS
•
•
•
Our network has been transformed into several customer
access-points for focused growth based on our key
strengths in different regions of the country and in select
high-potential markets of the world.
Our well-established presence across Bangladesh in over
40 years means we are best positioned to extract new
opportunities from a growing and emerging marketplace.
Our international subsidiaries are located in Malaysia and
LEADING DIGITAL BANK WITH FIRST-TO-MARKET
INNOVATIONS
•
We invest in technology and people capabilities to ensure
long-term growth and build next-gen competencies.
•
We maintain market leadership through hyperpersonalised, safe and best-in-class customer
experiences, enabled by robust tech platforms.
•
Our digital nano loan product best encapsulates our focus
on leading digital innovation in financial services.
Annual Report 2022
61
Impressions & Expressions
City Bank Delivers Value
PERFORMANCE SCORECARD, 2022
Sound performance in challenging conditions, anchored on performance recovery
amid COVID-19
PROFITABILITY
STABILITY
Profit after taxation (BDT mn)
Tier-1 ratio (%)
2020
4,012
2020
10.8%
2020
4.0%
2021
4,743
2021
10.6%
2021
4.9%
2022
4,508
2022
9.6%
2022
3.9%
Gross NPL ratio (%)
Earnings / share (BDT)
Total capital ratio (%)
Net NPL ratio (%)
2020
3.9
2020
15.5%
2020
2.6%
2021
4.4
2021
14.2%
2021
2.9%
2022
3.8
2022
14.5%
2022
2.3%
Return on assets (%)
Net stable funding ratio (%)
Provision coverage ratio (%)
2020
1.1%
2020
104.6%
2020
94.9%
2021
1.2%
2021
106.9%
2021
90.1%
2022
1.0%
2022
103.1%
2022
104.7%
Return on equity (%)
Leverage ratio (%)
2020
14.8%
2020
6.1%
2021
15.8%
2021
5.6%
2022
14.1%
2022
5.3%
LIQUIDITY
SHARE VALUATION
Statutory liquidity Ratio (SLR)
surplus (BDT mn)
2020
2,768
2021
6,407
2022
7,310
Liquidity coverage ratio (%)
62
CREDIT QUALITY
2020
173.5%
2021
151.1%
2022
220.1%
Annual Report 2022
Dividend / share
2020
17.5% Cash, 5% Stock
2021
12.5% Cash, 12.5% Stock
2022
10.0% Cash, 2.0% Stock
Market capitalization (BDT mn)
2020
25,206
2021
29,135
2022
26,173
Our Pillars
THE VISIONARY
CHANGE MAKERS
City Bank acknowledges the untiring efforts of the founding fathers of the institution. It was the visionary entrepreneurship of 12
young businessmen who braved the uncertainties and risks with courage and zeal in order to establish Bangladesh’s first private
commercial bank back in 1983. They determined early the critical importance of a well-governed bank for all-round progress for
everyone. Today, as we focus on accomplishing new frontiers in line with their vision of a vibrant financial institution, we continue
to draw inspiration from their indomitable spirit of enterprise and their relentless efforts on excellence.
They are (from left to right) Mr. Monowar Ali, Mr. Ibrahim Mia (Late), Mr. Abdul Hadi (Late), Mr. M.A. Hashem (Late), Mr. Anwar
Hossain (Late), Mr. Abdul Barik Choudhury (Late), Mr. Deen Mohammad (Late), Mr. A.B.M. Feroz, Mr. Md. Ali Hossain, Mr. Azizul
Haque Chowdhury (Late), Mr. N.A. Chowdhury (Late) and Mr. A. K. Mehmood.
Annual Report 2022
63
BOARD OF DIRECTORS
City Bank’s Board is lit up by a group of 11 individuals who are driven by self-motivation. The Board is committed
to helping the Bank achieve long-term success. The Board provides direction to the management by setting the
strategy and overseeing its implementation.
Aziz Al Kaiser, Chairman
Hossain Khaled, Vice Chairman
Hossain Mehmood, Director
Tabassum Kaiser, Director
Syeda Shaireen Aziz, Director
Savera H. Mahmood, Director
64
Annual Report 2022
Our Pillars
26
Meetings of the Board of
Directors held in 2022
Rajibul Huq Chowdhury, Director
Rebecca Brosnan, IFC Nominated Director
Dr. Salim Mahmud, Independent Director
Matiul Islam Nowshad, Independent Director
Mix of experience
Mashrur Arefin, Managing Director & CEO
Work experience of the directors ranges from 15 to
50 years. A great mix of youth and experience.
Annual Report 2022
65
OUR DIRECTORS’ PROFILE
At City Bank, we have a committed, balanced and diverse Board of Directors comprising 11 members, of which 2 are
Independent Directors and 4 are Female Directors. During the course of the year 2022, the Board discussed a wide
range of issues, including responsible banking, sustainability, human resources and culture, regulatory compliance
and non-performing loan provisions and recovery, among others.
AZIZ AL KAISER
Chairman
Appointed to the City Bank Board on 23 August, 1999
Aziz Al Kaiser is a prominent entrepreneur of Bangladesh. A graduate
from UK, Kaiser is involved in a diverse range of businesses, including
shipping, food, telecoms, ICT, banking, leasing and real estate, among
others. He is also the Managing Director and Director in a number of
Partex Star Group Companies. A member of the Executive Committee
of the Board of Directors of City Bank, Kaiser is the chairman of City
Bank’s subsidiary in Malaysia – CBL Money Transfer Sdn. Bhd. He
takes keen interest in cricket and he was a Director of Bangladesh
Cricket Board and also Chairman of the Marketing & Commercial
Committee of the Bangladesh Cricket Board.
HOSSAIN KHALED
Vice Chairman
Appointed to the City Bank Board on 09 November, 2000
Hossain Khaled is a versatile new-age entrepreneur. He obtained his
BBA in Accounting from the University of Toledo (Ohio) followed by
MBA in International Banking from Texas A&M University (Texas) in
USA. Khaled was trained by his father - Mr. Anwar Hossain (founder of
The City Bank and Anwar Group of Industries) from a very early age,
and joined the family conglomerate of Anwar Group of Industries in the
year 2000. Since then, he has helmed many group company portfolios
and also achieved several milestones, including becoming the youngest
President of Dhaka Chamber of Commerce & Industry and also CoChairman of Bangladesh Better Business Forum. In fact, he remains as
the only President of Dhaka Chamber of Commerce & Industry to have
been elected four times. Khaled is now the Group Managing Director
of Anwar Group. At City Bank, he is also a member of the Executive
Committee of the Board of Directors and Convener of the Bank’s Risk
Management Committee. He is also the Chairman of City Brokerage
Ltd., City Bank HongKong Limited, and the founding President of
Entrepreneurs’ Organization (EO) Bangladesh chapter. Khaled is an avid
car enthusiast, collector, and loves to adventure!
HOSSAIN MEHMOOD
Director
Appointed to the City Bank Board on 23 March, 2002
Mr. Hossain Mehmood is an industrial entrepreneur and has
established a longstanding legacy in business. He successfully set
up and executed a number of industrial undertakings. He is Chairman
66
Annual Report 2022
and Director of a number of companies of Anwar Group of Industries
and also holds Managing Directorship positions at Hossain Dyeing &
Printing Mills Limited, Mehmud Industries (Pvt.) Limited and Anwar
Silk Mills Limited. He was the Chairman of Bangladesh Terry Towel
and Linen Manufacturer & Exporters Association (BTTLMEA), and Vice
President of Bangladesh Textile Mills Association (BTMA), and Vice
Chairman of Bangladesh Finance Securities Limited. He is Director of
The City Bank Limited. He is also Director Anwar Galvanizing Limited.
He patronizes many educational and social welfare institutions, such
as Alhaj Anwar Hossain Foundation, Jamila Khatun Lalbagh Girls High
School, Jamila Khatun Red Crescent Maternity Center, Alhaj Anwar
Hossain NHN Diabetic Center etc. Mr. Mehmood has sound academic
credentials and is a reputed member of society.
TABASSUM KAISER
Director
Appointed to the City Bank Board 6 March, 2002
Tabassum Kaiser is an accomplished woman entrepreneur with rich and
varied experiences in business. She is the Chairman of Partex Agro Limited
and Star Adhesive Limited; and director of many other Partex group ventures
like Star Particle Board Mills Ltd, Partex Furniture Ltd, Partex Cables Ltd,
Triple Apparels Ltd, etc. She holds board member positions at many other
institutions. She was also the former Director of Janata Insurance Ltd
and GSP Finance Ltd. She is a strong supporter of local and international
humanitarian causes, and is actively involved in raising awareness on
social welfare, community development, and environmental issues. She
holds an MBA degree from North South University, Bangladesh, where
she is an active member of the university’s alumni. She is currently
pursuing her Doctor of Business Administration (DBA) degree
in Banking & Finance from University of Dhaka.
SYEDA SHAIREEN AZIZ
Director
Appointed to the City Bank Board on 30 April, 2012
Syeda Shaireen Aziz, a renowned business personality of the country,
is the Chairman of Partex Petro Ltd. And Sakhi Fisheries Ltd. Director of
Partex Beverage Ltd., Partex Plastics Ltd., Partex Foundry Ltd., Partex
Properties Ltd., Partex Corporate Ltd., and a trustee member of IBAIS
University. She finished her high school at David Game College, London,
and studied her LLB at Holborn College, London. She is involved in many
social and philanthropic works and committed to make positive changes
in the society.
Our Pillars
SAVERA H. MAHMOOD
Director
Appointed to the City Bank Board on 21 July, 2016
Savera H. Mahmood is also a Director of Partex Star Group She holds a
Master’s Degree in Social Studies from University of Chittagong. She is
involved in many social and philanthropic works and committed to make
positive changes in the society.
RAJIBUL HUQ CHOWDHURY
Director
Appointed to the City Bank Board on 18 October, 2011
Rajibul Huq Chowdhury is a prominent business entrepreneur of
Bangladesh. He is involved in a diverse range of business sectors,
including chemicals, printing and machinery. Mr. Chowdhury is a
Proprietor, Managing Director and Director of various companies
of Aziz Group. He is also a Director in ASM Chemical Industries Ltd,
a renowned basic chemicals production unit in the country. He
patronises many educational institutions and is involved with various
social forums as well.
REBECCA BROSNAN
IFC Nominated Director
Appointed to the City Bank Board on 2 November, 2020
Rebecca Brosnan was appointed on the City Bank Board as Nominated
Director of IFC (International Finance Corporation). IFC, a member of
the World Bank Group, has been holding a 4.95% share of the bank
since 2017. Rebecca is the Chief Operating Officer of Mother’s Choice,
a leading NGO dedicated to serving children without families and
pregnant teenagers in Hong Kong. She is responsible for organisationwide strategic development, financial management and impact
measurement and runs seven front-line business verticals in the
organisation. Prior to joining Mother’s Choice in 2016, she served
in several senior roles at the Hong Kong Exchanges and Clearing
Limited (HKEx), including as its Managing Director - Head of Product
Development, and Head of Asia Commodities. Prior to joining HKEx
in 2010, Rebecca led the execution and origination of equity, debt,
equity-linked and M&A transactions across Asia in the Investment
Banking Division of Merrill Lynch. Rebecca is an alumna of the General
Management Program at Harvard Business School. She holds an MA
in History of International Relations from London School of Economics,
and a BA in Economics from Trinity College, USA.
DR. SALIM MAHMUD
Independent Director
Appointed to the City Bank Board on 14 June, 2020
Dr. Salim Mahmud is an educationist teaching law as Professor in
University of Dhaka, as well as an international energy expert. Dr.
Mahmud is the member of South Asia Regional Initiative/Energy
Integration (SARI/EI) for South Asia Regional Electricity Markets
Development (Task Force 3). Till 2019, he was Chairman of Bangladesh
Energy Regulatory Commission (BERC) Tribunal and played his role as
a Commissioner in BERC during 2009-16. With vast experiencing in
teaching in different universities, Dr. Mahmud has also authored a
number of international publications. He has also completed various
courses and trainings on energy issues outside his academic and
research arena. Dr. Mahmud was a Member of Bangladesh Bar
Council Legal Education Committee (2009-12) and has served as
an independent director (2013-19) in a first generation private
commercial bank in Bangladesh.
MATIUL ISLAM NOWSHAD, CMGR
Independent Director
Appointed to the City Bank Board on 07th November, 2022
Matiul Islam Nowshad, CMgr, is a seasoned management professional
with over three decades of experience spanning three industry
segments - tea, textile and telecommunication in Bangladesh and
South / Southeast Asia region. Besides his full-time role Nowshad has
held Independent Board positions in financial institutions, IDLC Finance
Ltd. for consecutive two terms and had been the Chairman of IDLC
Investments Ltd. IDLC Securities Ltd. and IDLC Asset Management
Ltd. at different time during his tenure until June 2022. Nowshad is
currently a Co-Founder and Partner at ZUNOKS Consulting. Nowshad
is a Chartered Manager (CMgr.) and Chartered Fellow of Chartered
Management Institute (UK). He holds a master’s degree in business.
He has attended several general management programs in INSEAD,
IMD, Cranfield, IIMs to name a few amongst others.
MASHRUR AREFIN
Managing Director & CEO
Appointed to the City Bank Board on 17 January, 2019
Starting his career in 1995 with ANZ Grindlays Bank, Bangladesh,
as a Management Trainee, Mashrur worked in several important
positions in Standard Chartered Bank, Qatar; ANZ Banking Group,
Melbourne, Australia; American Express Bank, Bangladesh; Citibank
N.A., Bangladesh; Eastern Bank Ltd, Bangladesh, etc. Mashrur joined
City Bank in 2007 and worked in different times as its Head of Retail
Banking & SME; Chief Operating Officer; Chief Communications Officer;
and champion of the bank’s digital services agenda. During his time as
the CEO, the bank’s annual income increased by 55%; operating profit
increased by 77%; Cost to income ratio decreased from 58% to 52%;
annual trade volume increased from USD 3.6 billion to USD 6.7 billion;
profit after tax increased from BDT 2,018 million as on 31.12.2018 to
BDT 4,508 million as on 31.12.2022, a growth of 123%. Mashrur was
reinstated as MD & CEO in January 2022 for another term.
Annual Report 2022
67
MANAGEMENT COMMITTEE
Our management committee is focused on protecting the health and wellbeing of our colleagues and supporting our
customers, clients and other stakeholders, while maintaining the financial and operational integrity of City Bank.
Mashrur Arefin
Managing Director & CEO
Sheikh Mohammad Maroof
Additional Managing Director & CBO
Kazi Azizur Rahman
DMD & CIO
68
Annual Report 2022
Mohammad Mahbubur Rahman
Additional Managing Director & CFO
Nurullah Choudhury
DMD & Head of Corporate Banking
Mahia Juned
Additional Managing Director and COO & CAMLCO
Faruk Ahmed
DMD & Head of Trade Services
Mesbaul Asif Siddiqui
DMD & CRO
Our Pillars
Deep banking knowledge
and experience
More than two-thirds of the Management
Committee members are seasoned bankers, while
the rest have diversified industry experience.
25
Average years of experience of the
Management Committee
A.K.M Saif Ullah Kowchar
Head of Internal Control & Compliance
Md. Arup Haider
Head of Retail Banking
Md. Nurul Azam Mozumder
Head of Medium Business
Kamrul Mehedi
Head of Small Business
Md. Safiul Amin
Head of Branches
Mohammad Mahmud Gony
Head of Commercial Banking
Mohammad Firoz Alam
Head of CRM
Md. Ashanur Rahman
Chief Economist & Country Business Manager
Md. Zafrul Hasan
Head of Enterprise Project Management Office
Nishat Anwar
Head of Human Resources
Md. Kafi Khan
Company Secretary
Muhammed Shah Alam
Head of Treasury
Annual Report 2022
69
MANAGEMENT
COMMITTEE PROFILE
Mashrur Arefin
Mohammad Mahbubur Rahman
Managing Director & CEO
MA, University of Dhaka MBA, Victoria University, Melbourne,
Australia
Addl. Managing Director & Chief Financial Officer
Fellow Chartered Accountant
The Institute of Chartered Accountants of Bangladesh (ICAB)
Joined City Bank in 2007
Joined City Bank in 2011
Starting his career in 1995 with ANZ Grindlays Bank, Bangladesh,
as a Management Trainee, Mashrur worked in several important
positions in Standard Chartered Bank, Qatar; ANZ Banking Group,
Melbourne, Australia; American Express Bank, Bangladesh; Citibank
N.A., Bangladesh; Eastern Bank Ltd, Bangladesh, etc. Mashrur joined
City Bank in 2007 and worked in different times as its Head of Retail
Banking & SME; Chief Operating Officer; Chief Communications Officer;
and champion of the bank’s digital services agenda. During his time as
the CEO, the bank’s annual income increased by 55%; operating profit
increased by 77%; Cost to income ratio decreased from 58% to 52%;
annual trade volume increased from USD 3.6 billion to USD 6.7 billion;
profit after tax increased from BDT 2,018 million as on 31.12.2018 to
BDT 4,508 million as on 31.12.2022, a growth of 123%. Mashrur was
reinstated as MD & CEO in January 2022 for another term.
Md. Mahbubur Rahman has a rich experience of working in leadership
roles in various multinational, local corporate and development
organizations. His proven capability in strategic and financial
management enables the Bank to successfully achieve its objectives.
Before joining City Bank, Mahbubur worked for World Bank as
Financial Management Specialist. He has also worked in several
capacities, including Addl. General Manager and Head of Revenue at
Grameenphone for five years, and subsequently as the Chief Financial
Officer of Leads Corporation Ltd.
Mahbubur represents City Bank as one of the nominated directors
on the Board of IDLC Finance Limited, City Bank Capital Resources
Limited, and City Brokerage Limited.
Mahia Juned
Sheikh Mohammad Maroof
Additional Managing Director & Chief Business Officer
Master of Commerce in Finance, University of Dhaka
Joined City Bank in 2007
Sheikh Mohammad Maroof brings with him over 25 years of experience
and expertise in Corporate, Treasury, SME, Green & Infrastructure
Financing. He has played an instrumental role in bringing forth derivative
products, development of foreign exchange market, development
of money market, merger & acquisition, advisory, structured finance
transactions, and development of offshore banking business.
Maroof started his career in 1995 with American Express Bank,
Bangladesh, as a Management Trainee. He later joined City Bank in
June 2007 as Executive Vice President (EVP) and ever since he has
played a key role in the Bank achieving tremendous success over time.
He was promoted to the post of Addl. Managing Director (AMD) in
February 2019 and the Chief Business Officer (CBO) of City Bank in
January 2022. As CBO, Maroof holds the responsibility of the overall
businesses of the Bank, including Digital Financial Services.
In 15 years at City Bank, Maroof’s efforts and significant involvement
has lead the way with business growth for City Bank and established
strong relationships with most of the major multilateral, correspondent
banks and ECA Finance agencies.
With 26 years of experience, Maroof has attained leadership roles in
other institutions. He is the board member of IIDFC, City Brokerage,
City Merchant Bank, and Venture Capital Partners Bangladesh (VIPB).
He is also in-charge of City Bank Exchange House in Malaysia.
70
Annual Report 2022
Addl. Managing Director, Chief Operating Officer & Chief Anti
Money Laundering Compliance Officer
BBA, Assumption University, Bangkok, Thailand
Joined City Bank in 2007
Mahia Juned started her career in 1994 with Citibank N.A., Bangladesh.
The last position she held there was Resident Vice President, leading
most of the operations teams.
Mahia joined City Bank in 2007 as Head of Project Management and
was subsequently promoted to the position of Chief Operating Officer in
2019. Recently, City Bank promoted her to the position of Addl. Managing
Director (AMD). In her new position, she will continue to be the Chief
Operating Officer and CAMLCO and also be in-charge of the women’s
affairs of the organisation.
Mahia represents City Bank as a nominated director on the Board, the
Board’s Audit Committee of IDLC Finance Limited, and the Board of City
Hong Kong Limited, a subsidiary of City Bank in Hong Kong.
Kazi Azizur Rahman
Deputy Managing Director & Chief Information Officer
Bachelor of Science in Engineering Major Electronics &
Communications, Newport University, India
Post Graduate Diploma in Computer Programming, Institute of
Electronics, India
Joined City Bank in 2021
Kazi Azizur Rahman, in his vast career of more than 29 years, has
worked in different sectors at home and abroad, including 17 years in
the banking sector of Bangladesh.
Our Pillars
Prior to joining City Bank, Aziz was the Deputy Managing Director &
Chief Information Officer of Meghna Bank Ltd. He started his career
in 1990 and worked in companies like Grabowsky & Poort, BIRDEM,
British American Tobacco Bangladesh (BATB), and Net-Linx Americas
Inc. in Canada. In 2003, he started his banking career with Estarn
Bank Ltd. He moved to City Bank in 2007 and worked here for 12
years, where he significantly contributed in the overall growth of the
organisation through his leadership and helped building the IT division
to support the business growth. He left the Bank in 2019 as the DMD
& CIO and later worked in South East Bank and Meghna Bank.
Nurullah Chaudhury
Deputy Managing Director & Head of Corporate Banking
Bachelor in Finance, USA
Joined City Bank in 2008
Nurullah Chaudhury joined City Bank as Unit Head of Corporate
Banking in 2008, and was subsequently promoted as Cluster Head
of RMG and textiles. Prior to City Bank, in his two-decade career in
the banking industry, he served Shamil Bank of Bahrain and Bank Al
Falah in various divisions, including Corporate Banking. He is currently
heading the Corporate Banking Division as a Deputy Managing Director
of the Bank. He also represents City Bank as one of the nominated
directors on the Board of IDLC Finance Limited.
Faruk Ahmed
Deputy Managing Director & Head of Trade Services
Masters in Marketing, University of Dhaka
Joined City Bank in 2020
Faruk Ahmed started his career at IFIC Bank in 1994, after completing
his studies from the University of Dhaka. He is a renowned trade
finance professional, enriched with vast knowledge on many trade
finance products such as supply chain financing, factoring, reverse
Mesbaul Asif Siddiqui
Deputy Managing Director and Chief Risk Officer
Masters in Bank Management, Bangladesh Institute of Bank
Management (BIBM)
MBA in Finance, University of Dhaka
Joined City Bank in 2015
Mesbaul Asif Siddiqui started his career in Eastern Bank as a
Management Trainee in 1999 and worked in different capacities for
almost 6 years in branches and wholesale banking. He also worked
in Commercial Bank of Ceylon for 2 years and HSBC Bangladesh
and HSBC Singapore, respectively, for 9 years in various positions
in Wholesale Banking.
Asif joined City Bank in 2015 as EVP & Cluster Head, Corporate
Banking. Subsequently he was placed as Head of Credit Risk
Management and Sustainable Finance of the Bank. Recently, he
was promoted to the role of Deputy Managing Director and Chief
Risk Officer (CRO).
Asif is an International Compliance Association certified
professional in “Anti Money Laundering and Sanctions Compliance”,
in association with The University of Manchester.
A K M Saif Ullah Kowchar
Head of Internal Control & Compliance
Fellow Chartered Accountant, the Institute of Chartered
Accountants of Bangladesh (ICAB), Associate Chartered Accountant,
Institute of Chartered Accountants in England and Wales (ICAEW)
Joined City Bank in 2019
A K M Saif Ullah Kowchar, FCA, has more than 22 years of multifunctional and multi-geographic experience, working in different
organisations like Citibank N.A. (Bangladesh and the Philippines),
Pacific BD Telecom Ltd and KPMG (Bangladesh and Qatar) prior to
joining City Bank as Head of Internal Control & Compliance.
factoring, blockchain and offshore banking.
As a fintech enthusiast, Faruk was a core member of the Core
Banking Systems (CBS) and Trade Modules System implementation
in different organizations. In his longstanding career, he worked with
Md. Arup Haider
Head of Retail Banking
MBA in Finance, IBA, University of Dhaka
reputed commercial banks of the country. Under his leadership, in
Joined City Bank in 2016
2022, City Bank handled trade transactions worth USD 7.20 billion.
Md. Arup Haider was appointed as Head of Retail Banking at City Bank
in 2018 and he has been successfully discharging the responsibility
since then. He is also supervising the Bank’s Islamic Banking wing
- City Islamic. He started his career as a Management Trainee
Officer at Prime Bank Ltd in 2003. Previously, he worked as Head of
Consumer Credit Policy in Standard Chartered Bank and as Head of
SME Underwriting at BRAC Bank. He completed his MBA from IBA,
DU, after completing his graduation with Honors in Economics from
Scottish Church College, Kolkata University.
Faruk brings over 29 years of professional experience, with specialist
understanding of branch banking operations, offshore banking
operations and trade finance operations. He has attended various
trainings, seminars, workshops and conferences in Bangladesh
as well as in different countries in Asia, Europe, USA, and other
continents of the world.
Annual Report 2022
71
Nurul Azam Mozumder
Mohammad Mahmud Gony
Head of Medium Business
Master of Science, University of Dhaka. Master in Business Studies,
University of Dhaka
Head of Commercial Banking Division
MS in Agricultural Economics, Bangladesh Agricultural University
MBA in Marketing, University of Dhaka
Joined City Bank in 1999
Joined City Bank in 2017
Md. Nurul Azam Mozumder joined City Bank in 1999 as Management
Trainee. Mr. Mozumder’ s responsibilities have significantly been expanded
during his 23 years’ service tenure in the Bank with excellence. He has
played different roles and contributed a lot to the Bank as a Business
Development Manager, Branch Manager of Principal Branch, Cluster Head
of Branches & Acting Head of Branches. He was subsequently appointed
as the Head of Medium Business in 2018 and played the pivotal role in
restructuring of SME-Medium Division under centralized platform. In
recognition of his contribution in the Bank with cross functional leadership
he was rewarded the most prestigious Integrity Award by the Board of
Directors in 2022. He is also serving as one of the five value ambassadors
of the Bank as well as an active member of the Management Committee.
Mohammad Mahmud Gony, an experienced banker with 22 years of
experience, joined City Bank in 2001 as a Management Trainee. In
2007, when the Bank started its reforms program, he actively took
part in the formation of the Corporate Banking Division. As a frontliner,
he onboarded some big corporates to the Bank. In 2010, he switched
to another local bank and worked there in the wholesale banking
division. In 2017, he came back to City Bank as Head of Commercial
Banking Division. During his tenure at the Bank, Gony has contributed
to the business growth of his assigned portfolio, especially in terms of
expanding the loan portfolio and non-funded income.
Kamrul Mehedi
Head of Small Business
Masters in Business Administration Masters in Defense Strategy
Joined City Bank in 2017
Kamrul Mehedi started his banking career at BRAC Bank in 2011 after
a brief stint with Bangladesh Army. He worked in the SME Division
and looked after SME funding and management of non-performing
loans, with special focus on strategy implementation and credit risk
and recovery. In 2017, he joined City Bank as Head of Small & Micro
Finance Business.
Kamrul secured his MBA from a private university and a Master’s
Degree in Defense Strategy. He also holds a Graduate degree in
Banking Leadership from Presencing Institute, CoLab, MIT, USA.
Md. Safiul Amin
Head of Branches
M.Com, University of Dhaka
Joined City Bank in 2016
Md. Safiul Amin started his career as a Lecturer of Management
Department of a govt. university college as a BCS Cadre upon
completion of his studies from the University of Dhaka. Later, he
started his banking career in Sonali Bank as a Financial Analyst and
moved to City Bank in 2003 in the Project and Corporate Finance
Department, which was later renamed as Credit Risk Management
Division (CRM). In 2012, he moved to Prime Bank in the Corporate
Banking Division. Amin re-joined City Bank in 2016 in Retail Banking
Division as Cluster Head, and in 2018 he was assigned his present role
as Head of Branches.
72
Annual Report 2022
Mohammad Firoz Alam
Head of Credit Risk Management
MBA in Finance, University of Dhaka
Joined City Bank in 2023
Mohammad Firoz Alam started his career in the banking sector in AB
Bank Limited in 2003. He moved to BRAC Bank Limited in 2006 and
has worked extensively there in various capacities. His contributions
in policy formations, process re-engineering and credit underwriting
reforms were pivotal in strategic growth of BRAC Bank Limited. He
also kept his significant mark in implementation of Basel II and III
during his tenor in BBL. He worked there for 11 years and took over
the role of Head of Corporate Credit Underwriting before moving to
Prime Bank Limited in 2017. He assumed the role of Head of Credit
Risk Management and Sustainable Finance and kept his prominent
impression in transforming credit underwriting process there. Later,
in 2023, he joined the City Bank Limited with his garnered experience
and is currently heading the Credit Risk Management Division.
Md. Ashanur Rahman
Chief Economist & Country Business Manager
Masters in Bank Management, BIBM
Bachelors in Statistics, Jahangirnagar University
Joined City Bank in 2019
Md. Ashanur Rahman started his banking career as a Management
Trainee with Mercantile Bank in 2004. He worked there in different
areas, including credit, research & planning. In 2008, he joined City
Bank and took charge of different areas of risk management, including
credit, market and operational risks. He joined Royal Bank of Canada
as a retail banker where he gained significant experience in retail
banking, underwriting and customer services. He has more than 19
years of experience in banking, both in Bangladesh and abroad.
Md. Kafi Khan
Head of Enterprise Project Management Office
MCM, University of Strathclyde, UK
MBA (International Business), Banaras Hindu University, Varanasi, India
Company Secretary
Doctor of Business Administration (Course Completed), IBA,
University of Dhaka
Post Graduate in Human Resources Management Bachelor and
Masters in Accounting, University of Dhaka, Bachelor of Law
Joined City Bank in 2019
Zafrul Hasan embarked upon his career in the year 1995 as an Area
Manager in Sheba Telecom (now Banglalink). The last position he
held there was Manager of Regional Operation & Credit Control
before leaving the company as a result of being awarded a Chevening
Scholarship sponsored by Vodafone in 2004, which allowed him to
pursue his studies in the UK.
After returning from the UK, Zafrul joined Pacific Bangladesh Telecom
Ltd and left the company as General Manager of Product Development.
Later, he moved to Robi and through a span of eight years, worked
in various positions in marketing, sales, supply chain, finance and
technology. He spearheaded many programs and campaigns, applying
them for the first time in Bangladesh by introducing a number of
products and services, customer offerings and voice and data plans to
the market.
In 2015, Zafrul joined bKash as Head of Strategy and Business
Development. He led the Commercial Division of bKash, before moving
out to Enterprise Project Management and then left bKash to continue
his career with City Bank in the year 2019. Throughout his career, Zafrul
has worked in and acclimatized to various professional environments,
all the while maintaining his consistent work ethic and standards.
Nishat Anwar
Head of Human Resources
MBA, North South University
Post Graduate Diploma in Personnel Management, Bangladesh
Institute of Management
Our Pillars
Md. Zafrul Hasan
Joined City Bank in 2004
Md. Kafi Khan started his career in 1998 at Monno Fabrics as Manager
- MIS and Support Associate to the Management Consultant. He
possesses more than 27 years of work experience in various sectors,
encompassing areas such as human resources, accounts, costing and
budgeting, cost audit and financial audit, secretarial audit, planning
and commercial, legal affairs and company secretarial practices, etc.
The last position he held was as Company Secretary of Apollo Ispat
and Group of Companies. He joined City Bank as Company Secretary
in 2004. He holds Fellow Membership of the Institute of Personnel
Management of Bangladesh (IPM), the Institute of Certified General
Accountants of Bangladesh (ICGAB) and the Institute of Internal
Auditors of Bangladesh (IIAB).
Muhammed Shah Alam
Head of Treasury
MBA, University of Dhaka MSc in Statistics
Joined City Bank in 2013
Muhammed Shah Alam started his career in Arab Bangladesh Bank
as a probationary officer and gradually moved to treasury. He joined
City Bank in 2007 in the Treasury department and then moved to
Eastern Bank in the same department. Alam re-joined City Bank in
2013 and, in 2019, he was promoted as the Head of Treasury. Besides
being a treasury and market risk expert, he is keen on staying updated
on monetary management, fiscal management and macroeconomic
landscape of the country.
Joined City Bank in 2018
Nishat Anwar started her career in 1997 with DHL Express, Bangladesh.
She possesses several years of HR business partnering experience with
global organisations, including Standard Chartered Bank, Bangladesh.
She has also worked in Banglalink as Senior Manager in various
capacities and subsequently in a leading retail chain in Canada before
joining City Bank as the Head of HR in 2018.
Annual Report 2022
73
EXTENDED MANAGEMENT
COMMITTEE
14
17
19
16
15
12
13
10
09
18
07
05
03
06
02
01
08
04
05
Subir Kumar Kundu
(Head of Products, Segments & Direct Acquisitions)
06
Mohammad Mahfuzur Rahman (Head of Operations)
07
Mohammad Rakib Uddin Ahammad (Head of Finance)
Fahria Huque (Head of Citygem Priority Banking)
08
Ummay Habiba Sharmin (Head of Legal)
09
Md.Sajid I.H.Chowdhury (Head of Foreign Exchange)
14
10
Mujtanibul Ahmed (Head of DFS)
Mohammed Morshedul Quader Khalili
(Head of ML & TFP and Operational Risk Management)
15
Md. Mustafizur Rahman (Head of Alternate Delivery Channels)
11
Saifur Rahman Shawkat (Head of Information Technology)
16
Hasan Sharif Ahmed (Head of Financial Institutions)
12
Md. Zahirul Islam (Head of Cards Operations)
17
Mohammad Razimul Haque Razim (Head of Cards)
Mohammad Ahtasamul Hoque (Head of Audit)
18
Mohammed Minhazur Rahman (Head of Corporate Credit Risk)
19
Abul Bashar Mohammad Nazrul Islam (Regional Head, Medium Business)
01
Faruk Ahmed (Chairman, EMC, DMD & Head of TSD)
02
Farhad Aziz (Head of General Admin)
03
Shahriar Jamil Khan
(Head of Brand & Communications and Corporate Affairs)
04
13
74
11
Annual Report 2022
Our Pillars
30
28
32
34
29
35
33
31
22
21
20
37
36
25
26
23
27
24
20
Sayeeda Sajed (Head of Customer Experience)
24
Nasrin Akter (Head of City Alo)
21
Hasan Md. Lablu (Head of HR Operations)
25
Mahbub Ahmed Chowdhury (Head of Procurement)
22
Mirza Golam Yeahia (Head of PR & Media)
26
Md. Shaheen Ferdous (Head of Project Management Office)
23
Mohammad Jahangir Alam
(Cluster Head-Corporate Banking and Head of Offshore Banking)
27
Tahsin Haq (Head of Cash Management & Custodial Cluster)
28
Hasan Uddin Ahmed (Head of Employee Banking)
32
Md. Shoyeb Al Rashid (Head of Special Asset Management)
29
Mohammad Waliullah
(Head of Credit & Collection Retail & Small Business)
33
Masud Al Faruque (Cluster Head - RMG & Textile)
30
Md. Ariful Bari (Cluster Head - Manufacturing)
34
Priyatosh Gupta (Head of Imports)
31
Sanjoy Kumar Das
(Head of Organization Development & HR Strategy)
35
Md. Rezowan Tarafder (Regional Head of Branches, Dhaka- North)
36
Md. Shafiul Alam (Head of CAD)
37
Md. Mohibur Rahman (Head of Agent Banking)
Annual Report 2022
75
The City Bank Limited - Top Line
Skip levels of Managing Director & CEO
Managing Director
& CEO
MD’s
Secretariat
AMD & Chief
Business Officer
AMD & Chief
Financial Officer
Treasury
Head of
Branches
& City Alo
Finance
City Alo
Women
Banking
Procurement
Corporate
Banking
Retail Banking
AMD, Chief
Operating Officer &
CAMLCO
General Admin
DMD & Chief
Risk Officer
Credit
Administration
Information
Technology
Operation
Compliance &
Bond
Management
Credit Risk
Management
Project
Management
Office
Liability Service
Centre
Credit &
Collection
Enterprise
Architecture
Trade Support
Credit, Small
Business
Information
Security
Operations
Commercial
Banking
Supply Chain
Finance
Alternate
Delivery
Channels
Cash
Management &
Custodial Sector
Structured
Finance Unit
Customer
Experience
Citygem Priority
Banking
Treasury
Operations
Fraud Risk
Management
Small & Micro
Finance
Employee
Banking
Products,
Segments &
Direct
Acquisition
Branch
Operations
Legal
Payment Service
Centre
Special Asset
Management
Corporate
Strategic
Business
Management
Agent Banking
Medium
Business
Cards
Islamic Banking
Branches
DMD & Chief
Information
Officer
Trade Services
Card Operations
Financial
Institutions
Money
Laundering &
Terrorist Financing
Prevention
Risk
Management
Enterprise Risk
Management
Operational Risk
Management
76
Annual Report 2022
DFS Tech
Our Pillars
Head of DFS
Chief Economist &
Country Business
Manager
Head of
Enterprise Project
Management
Office
Internal Control
& Compliance
Company
Secretary
Brand &
Communications
and Corporate
Affairs
PR & Media
Human
Resources
Digital
Products
Audit &
Inspection
Event, Outdoor
& Infrastructure
Branding
Media
Management
HR Operations
Market
Planning &
Performance
Management
Compliance &
Monitoring Unit
Corporate
Affairs
Travel Desk
Organization
Development &
HR Strategy
New
Business &
Partnership
IS Audit
Brands
& Visual
Muraquib
Brand
Management
Recruitment
& MIS
Notes:
•
Head of Branches directly reports to the Head of Retail Banking for Retail Branches and to the AMD & Chief Business Officer for City Alo Women Banking.
•
Head of Operational Risk Management directly reports to the DMD & Chief Risk Officer and she/he has dotted reporting to AMD, Chief Operating Officer &
CAMLCO.
•
Head of DFS Tech directly reports to the DMD and CIO and dotted report to the Head of Planning and Business Development & Head of DFS.
•
Heads of the Project Management Office (IT), Enterprise Architecture, Information Security have dotted reporting to the Head of Information Technology.
•
For further information, please refer to the ‘Notes’ section under the Direct Reports to the Managing Director & CEO page.
Annual Report 2022
77
our identity
78
Annual Report 2022
Our Identity
CORPORATE DIRECTORY
City Bank and its subsidiaries
Name of entity: The City Bank Limited
Year of incorporation: 1983
Legal form: A public limited company incorporated in Bangladesh on 14 March, 1983 with the primary objective of carrying out
banking businesses inside and outside of Bangladesh. The Bank commenced banking operations on 23 March, 1983.
Group composition structure
Bank: The City Bank Limited
Subsidiaries:
City Brokerage Limited (Stock brokerage)
City Bank Capital Resources Limited (Merchant banking operations)
CBL Money Transfer Sdn. Bhd., Malaysia (Remittance services)
City Hong Kong Limited (International trade)
Board of Directors
Name
Mr. Aziz Al Kaiser
Mr. Hossain Khaled
Position
Chairman
Vice-Chairman
Mr. Hossain Mehmood
Nominated Director
Mrs. Tabassum Kaiser
Director
Mr. Rajibul Huq Chowdhury
Director
Mrs. Syeda Shaireen Aziz
Director
Ms. Rebecca Brosnan
Nominated Director
Mrs. Savera H. Mahmood
Nominated Director
Dr. Salim Mahmud
Independent Director
Mr. Matiul Islam Nowshad
Independent Director
Mr. Mashrur Arefin
Managing Director & CEO
Company Secretary: Mr. Md. Kafi Khan
Annual Report 2022
79
What sets us apart
City Bank is a leading banking and financial services institution of Bangladesh with a compelling value proposition - to offer
digitally-enabled, client-centric, integrated financial solutions that meet the fast evolving needs of Bangladeshis. Our wide
presence, dynamic team and strong partnerships place us at the forefront of our competition and enable us to deliver tangible
value to all our stakeholders. Some of the major factors that set us apart include:
Financial stability
Sustainable
operations
Customercentricity
Strong balance sheet,
healthy NIMs and
sound capital ratios.
We generate tangible
value for the society
and the environment.
We offer tailor-made
financial products
and solutions that
meet the personalized
requirements of our
customers.
Wider reach
We reached over 2.4
mn customers across
the nation.
Strong team
Our sales force is
committed to fulfilling
our customer promise
of trust, reliability and
dependability, as we
aim to be the preferred
growth partner of our
clients.
Core business
•
•
City Bank is a leading private commercial bank of
Bangladesh with established leadership in corporate
banking and a robust footprint in SME and consumer
businesses.
The Bank is also amongst the few in the country to be
offering both conventional as well as Islamic Banking
products and services.
•
The Bank offers a wide range of depository, loan and
card products and a holistic range of services to cater to
virtually every customer need and segment.
•
From student banking to priority banking to AMEX credit
cards, City Bank offers an expansive range of banking
products.
On a granular level, the product basket includes:
80
Savings and
current accounts
Personal loans
Debit cards
Credit cards and
pre-paid cards
Internet banking
Corporate banking
SME banking
Investment
banking
Treasury and
syndication
services
Supply chain
finance
Agent banking
Citygem priority
banking
City Alo - Women
banking
Two-wheeler
loans
Distributor finance
Digital Nano Loan
City Islamic
Annual Report 2022
Our Identity
Network
City Bank’s businesses are broadly segmented into the following divisions:
Corporate
Commercial
Retail
The Corporate Banking division has 3 clusters and under these
clusters, there are 12 relationship units - 9 in Dhaka and 3
in Chittagong. To facilitate and comprehensively support the
business units, the Bank has four product-specific solutionsbased units:
•
Cash Management and Custodian Cluster (CMCC)
•
Structured Finance Unit (SFU)
•
Corporate Strategic Business Management (CSBM)
•
Financial Institutions (FI)
Though City Bank’s operations are geographically centralized
in Dhaka and Chattogram, it has nationwide branches,
correspondent banks and affiliated networks worldwide to
serve the individual, SME and large corporate banking needs
of clients located across the country.
Cards
SME
Agent Banking
Branch Banking customers are served through an expansive
countrywide network of 133 branches, 351 ATMs, 64 Cash
Deposit Machines (CDMs), 116 SME-S Unit Offices, 690 Agent
Outlets and 7 Priority Centers (as on 31 December, 2022).
The Bank enjoys a well-entrenched presence in major cities/
towns of Bangladesh, including Dhaka, Chattogram, Sylhet,
Khulna, Barishal, Rajshahi and Rangpur. Branch Banking
covers both SME-S and retail customers.
City Bank is a pioneer in credit cards in Bangladesh. The Bank
provides a host of credit cards, including AMEX (Platinum, Gold,
Green and Blue), Master and VISA cards and is continuously
adding value for enhancing product functionality for the
satisfaction of its valued customers.
City Bank also has a strong Retail arm, which is not only the
major contributor to the Bank’s CASA (Current Account Savings
Account), but also provides a diversified basket of retail loans,
such as mortgage, personal, vehicle loans, etc.
Credit rating
As per BRPD Circular no. 6 dated 5 July 2006, the Bank has completed its credit rating conducted by Credit Rating Agency of
Bangladesh (CRAB) based on the financial statements as at and for the year ended 31 December, 2021. City Bank has also been
awarded B1 by Moody’s, a renowned rating agency.
B1
AA1
Rating by Moody’s
Rating by CRAB
Outlook: Stable
Annual Report 2022
81
Surveillance ratings by CRAB for the last five years:
Particulars
Base Period
Validity
Long-term
Short-term
Entity Rating
January to December 2021
30-Jun-23
AA1
ST-1
Entity Rating
January to December 2020
30-Jun-22
AA2
ST-2
Entity Rating
January to December 2019
30-Jun-21
AA2
ST-2
Entity Rating
January to December 2018
30-Jun-20
AA2
ST-2
Entity Rating
January to December 2017
30-Jun-19
AA2
ST-2
Committees of the Board of Directors
Executive Committee
Name
Status with Bank
Status with Committee
Mr. Aziz Al Kaiser
Chairman
Convenor
Mr. Hossain Khaled
Vice-Chairman
Member
Mr. Hossain Mehmood
Nominated Director
Member
Mr. Rajibul Huq Chowdhury
Director
Member
Company Secretary: Mr. Md. Kafi Khan
Audit Committee
Name
Status with Bank
Status with Committee
Dr. Salim Mahmud
Independent Director
Convenor
*Mr. Matiul Islam Nowshad
Independent Director
Member
Mrs. Syeda Shaireen Aziz
Director
Member
Mrs. Tabassum Kaiser
Director
Member
**Mr. Farooq Sobhan
Independent Director
Convenor
***Mr. Rafiqul Islam Khan
Director
Member
Company Secretary: Mr. Md. Kafi Khan
*Mr. Matiul Islam Nowshad, was included in the Board’s Audit Committee by complying laws and regulations.
** Mr. Farooq Sobhan’s 2nd term expired on 20th May, 2022
***Mr. Rafiqul Islam Khan was re-elected on 12th June 2022 at the 39th AGM. subsequently, his re-appointment was declined by
Bangladesh Bank due to CIB issue.
Board’s Risk Management Committee
Name
Status with Bank
Status with Committee
Mr. Hossain Khaled
Vice Chairman
Convenor
Mrs. Tabassum Kaiser
Director
Member
Mr. Hossain Mehmood
Nominated Director
Member
Mr. Rajibul Huq Choudhury
Director
Member
Ms. Rebecca Brosnan
Director (nominated by IFC)
Member
Company Secretary: Mr. Md. Kafi Khan
82
Annual Report 2022
Chairman
Mr. Md. Anwar Hossain Molla
Members
Principal: Maulana Zainul Abedin
Prof. Dr. ANM Rafiqur Rahman
Mr. Md. Fariduddin Ahmed
Maulana Shah Mohammad Wali Ullah
Prof. Dr. Muahmmad Yousuf Ibn Hossain
Dr. Muhammad Obaidullah
Advocate: Mr. Hossain Md. Shafiqur Rahman
Executive Risk Management Committee
Executive Risk Management Committee (ERMC) provides
oversight and supervision with regards to the identification
and evaluation of major strategic, operational and regulatory
information and external risks inherent in the Bank’s business
and the control processes with respect to such risks.
Assistance is extended to review, guide and manage various
risks resulting from the implementation of strategies and
action plans approved by the Board of Directors.
Combating corruption
Committee on Morals, Ethics and Integrity
As part of the effort of combating corruption, promoting
integrity and establishing good governance, the Government
of Bangladesh has adopted a ‘Commitment for Golden Bengal:
National Integrity Strategy (NIS) of Bangladesh’. A high-level
‘National Integrity Advisory Council’ has been constituted for
its implementation. Bangladesh Bank is entrusted with the
responsibility of implementing the National Integrity Strategy
(NIS) in the country’s financial sector.
In line with the implementation of NIS, the Bank has established
a ‘Committee on Morals, Ethics and Integrity’ to implement
the NIS directives within the Bank. Additionally, the committee
is mandated with the task of identifying ways to protect the
culture of loan defaults and promote consciousness with a
view to reduce frauds, forgeries, irregularities and other
sources of corruption across the Bank.
Ownership composition
As of 31 December, 2022, shareholding position of City Bank by the Directors, General Public and Financial Institutions is
presented below:
Composition
Status
No. of shares
Percentage (%) of total shares
General public
452,675,820
37.70%
Directors and sponsors
368,750,592
30.71%
Institutions
315,653,778
26.29%
63,526,553
5.29%
1,200,606,743
100.00%
Foreign shareholders
Total
Authorised Capital
BDT 15,000,000,000
(1,500,000,000 ordinary shares of BDT 10 each)
Paid-up capital
BDT 12,006,067,430
(1,200,606,743 ordinary shares of BDT 10 each)
Listing dates
•
Dhaka Stock Exchange Ltd.: 3 February, 1987
•
Chittagong Stock Exchange Ltd.: 27 December, 1995
Annual Report 2022
83
Our Identity
Shariah Supervisory Committee
Listing
Ordinary shares of the Bank are listed on both the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Shares
of City Bank are categorized as ‘A’ on the stock exchanges, and the stock symbol is CITYBANK.
Accounting year-end: 31 December, 2022
Corporate information
Chief Financial Officer
Mr. Md. Mahbubur Rahman
Legal Retainer
Law Valley
Bangladesh Bank
License Number- BCD(D)200/37-261 dated 23 March, 1983
Head of Internal Control & Compliance
Registered Office/ Head Office
Mr. A K M Saif Ullah Kowchar
136 Bir Uttam Mir Shawkat Sarak (Gulshan Avenue), Gulshan-2
Dhaka-1212, Bangladesh
Telephone No: 880-2-58813483, 880-2-58814375 and
880-2-58813126
Fax: 880-2-9884446
SWIFT: CIBLBDDH
E-mail: info@thecitybank.com Web: www.thecitybank.com
Auditors
Howladar Yunus & Co., Chartered Accountants
Tax Consultant
ACNABIN, Chartered Accountants
84
Annual Report 2022
Our Identity
management commentary
Annual Report 2022
85
86
Annual Report 2022
COMMUNIQUE FROM OUR
CHAIRMAN TO STAKEHOLDERS
12,359
NII (Tk. m)
As Chairman of the Bank, I am
incredibly proud of the role
City Bank has accomplished
in the growth journey of
Bangladesh. As a premier
national bank in the 40th year
of its existence in the year
2022, our contribution to the
national economy has gone
beyond just providing financial
services. Through sensible
and sustainable banking
solutions, City Bank has played
a humble role in stimulating
trade and commerce and
spurring economic mobility,
while also contributing to the
overall financial sector stability.
Though we have played a major
role in financial intermediation,
we still have a long way to go
as we prepare for the next 40
years and beyond.
Aziz Al Kaiser
Chairman
4,508
Net profit (Tk. m)
36%
Women representation on the Board
Dear Valued Members,
Heartfelt thanks to you for being an integral part of City
Bank. We truly value your conviction and confidence. In fact,
the trust and faith reposed by you in us is a groundswell of
encouragement for us to do better in fostering a bigger and
wider imprint on the development of Bangladesh.
The last two years bear testimony to the spirit of human
resilience to overcome the rigors of extreme turbulence, which
at times threatened to erase the growth and progress achieved
by mankind over centuries. Truly, fortitude and innovation
have been the outcome of such extraordinary circumstances,
paving the way for visualising and executing many new and
exciting ideas of an enduring nature.
While effective vaccines played a huge role in eradicating COVID
from most parts of the world, what is remarkable is the play
between science and technology that spawned a breakthrough
innovation at speed and scale. Today, technology is seeping
into every part of our life, right from AI-powered software to
machine learning to big data processing to natural language
processing. The sheer pace and scope of technological
advancement today would have been unimaginable just a few
years back. Yet, even though we live in a modern world, the
paradox is that some countries are resorting to the ancient
system of warfare and hostility.
Annual Report 2022
87
The Russia-Ukraine war has triggered humanitarian and
economic crises of a massive proportion and since these
countries are major producers of food grains, fuel and
fertilisers, the conflict impact has seeped throughout the
world, spawning an inflationary impact that has sent central
banks scurrying to increase policy rates to curb inflation.
Amid these challenges, Bangladesh has held up well so far,
with the economic foundations further bolstered by the
US$ 4.5 bn support loan from the IFC that the Bangladesh
government was successful in garnering. This loan package
will have a stabilizing effect on the economy and will provide
banks and financial channels a source of business in terms of
transmission and other ancillary impacts.
One of the prominent features of the past few years has been
the rise of Bangladesh’s banking industry, serving 165 mnplus people across geographies and demographics with both
brick-and-mortar and digital banking co-existing, representing
a microcosm of a Bangladesh where possibilities outweigh
vulnerabilities by a huge margin.
This is most vividly illustrated by the sheer resilience of the
economy built through years of challenge and change even as
the nation today is on the throes of moving past the LDC (least
development country) tag. Achieving this miraculous feat
in just about 50 years since independence is commendable,
more so when one considers that it was dismissed as a “basket
case”. It is no doubt that the banking industry has played a
significant role in this change of fortune, supporting the goals
of industrialisation, infrastructure creation, employment
generation, and tax contribution.
As Chairman of the Bank, I am proud of the role City Bank has
accomplished in the growth journey of the nation. As a premier
national bank in the 40th year of its existence in the year 2022,
I think our contribution to the national economy has gone
beyond just providing financial services. Through sensible and
sustainable banking solutions, City Bank has played a humble
role in stimulating trade and commerce, spurring economic
mobility, while also contributing to the overall financial sector
stability. Though we have played a major role in financial
intermediation, we still have a long way to go as we prepare
for the next 40 years and beyond.
This function of specialised financial intermediation has
recently acquired significance as the government faces
new challenges, including considerable foreign exchange
constraints amid a sharp devaluation of the local currency,
depletion of reserves and pressures on the current account
deficit. I am confident that the Bank remains well-positioned
88
Annual Report 2022
to help the country and clients through these difficult times,
guided by our long-term aim of being an inclusive, accessible
and contemporary financial services provider and a conduit of
positive change.
Today, while the spirit of banking as an economic stimulant
has remain unchanged, the word itself has assumed a whole
new meaning as it is no longer somewhere that one goes
to, but something that one does. This seemingly simple,
yet highly nuanced shift defining the paradigm change in
users’ expectations amidst the shifting landscape dotted by
emerging disruptive trends should define Bangladeshi banking
in the future.
As a Bank, we are already present in the future. We have
developed a slew of delivery and service channels that make
banking easy, simple and convenient for our customers. City
Eikhoni, Citytouch, WhatsApp Banking, digital nano-loans
disbursed through MFS channel, etc., are all vibrant examples
of our desire to serve our customers with passion and
enthusiasm via modern-day technology.
Banking is truly making rapid strides in the arena of digital
banking, meeting the expectations of a digitally-agile customer
basking in the information age. Bangladeshi banks like ours
have been embracing innovation like predictive banking while
adopting globally accepted best practices in the areas of risk
and ESG compliance, green banking and sustainability aimed
at banking for a better tomorrow.
If you look at it this way, this vision dovetails with what the
world requires today – progress, peace and positivity. Thus,
similar to the rest of the world, financial institutions in
Bangladesh will also be central in meeting key global agendas
with a prioritised focus on financial inclusion as they play a key
role in economic restoration at the grassroots that has been
especially challenged by the adverse global conditions. Banks
can not only spark a restart of local trade and commerce, but
also assist various segments of populations and businesses to
evolve to their next orbit of growth.
At City Bank, building on the trials, learnings and triumphs of
2022 and the past years, the fiscal year 2023 should be one
of bold experimentation and collaborative exchange of ideas
and resources among related entities, all juxtaposed against
the rapidly unfolding global scenario as the industry eventually
shifts to the Banking 5.0 model in a uniquely Bangladeshi way.
It would be incorrect to believe that from a product, process or
channel perspective, the customer is agnostic, merely looking
at getting his/her banking tasks done seamlessly at his/her
While technology will remain a crystal ball towards attaining
monumental shifts in 2023, banks will be doing much more
on the human capital front, reskilling and upskilling their most
precious assets, their employees, recognising the difference
that a motivated and agile workforce can make by harnessing
the positive power of tech-lead disruption, a vector of fostering
long-term good. At City Bank, our plans are totally aligned as
we focus on continuous exposure of our teams to learning
and development relating to finance, compliance, technology,
product design and customer experience, amongst others.
It is my belief that champion banks will maintain their leading
position by accelerating investment for creating a better digital
and technological architecture that allows for fine-tuning, a
healthier mix of asset quality, fortifying balance sheet again
accentuated external shocks, and improving key financials,
while reducing credit costs and other expenses. City Bank has
established a robust DFS (Digital Financial Services) group that
is the nerve center of the Bank spearheading all its digital and
tech-based banking activities.
I believe that phygital infrastructure blending will gain decisive
traction as banks move to connect the dots for bringing
communities at the fringes to the forefront. New digital
architecture like AI, open credit enablement network and databased lending should gain a firm foothold, benefiting small
businesses, agri and allied activities the most as technology
would enable them to be pre-certified for credit.
Having built strong and scalable digital infrastructure, City Bank
is refocusing on sustainably growing its footprint of physical
offices and touchpoints. The drive for innovation is visible here
too as evidenced by expansion in our Sub-Branch network that
typically comprise smaller outlets equipped to carry out all of
the Bank’s business but across a smaller area servicing the
catchment households in a semi-urban or rural area.
This approach to expansion not only enables the Bank to go
closer to its customers and establish direct visibility, but also
ensure faster unit-level breakeven as fixed and carrying costs
are typically low due to lower rents, etc.
Bangladesh is expected to become a middle-income nation
by 2026, a major transition from its LDC status, reclaiming
its rightful position in the economic community. Bangladeshi
banking will be a key partner in this process, with the focus on
ensuring that the benefits of economic growth and prosperity
are distributed to all strata of the society in an equitable and
sustainable manner. Further, post the current challenges,
revival in consumer demand and rise in private capital
expenditure, followed by a rise in government spending, may
be an additional trigger for growth
In addition to the potential economic growth-led recovery, my
sense of confidence in improving upon our financials stems
from the fact that the Bank has a high mix of floating loans
which will benefit from loan repricing that will continue to
support net interest income and overall earnings. This aside,
increasingly healthier loan book quality due to majority of the
back book clean-up being done and the pace of loan recoveries
stepped up will also support the overall financials of the Bank.
Against the weakened global growth outlook through 2022
and 2023, Bangladesh has remained an outlier among large
developing economies, chalking new vistas of growth in
calculated strides by forging ties with reliable partner nations
and building self-reliance through innovative prisms and by
promoting entrepreneurial acumen.
Banks, innate and interwoven in the sociocultural-financial
fabric of this great nation, would be at the forefront of the
historic change that lies ahead of us.
I am very proud that City Bank is one of those Banks.
Once again, thank you very much for the faith and trust
reposed in us. We will continue to keep it in the front and
centre of all our decisions.
With best wishes,
Aziz Al Kaiser
Chairman
Annual Report 2022
89
Management Commentary
convenience. Today, banking is also about being customercentric and relationship-based, compared with being simply
transactional. Banking, though tech-driven, needs to have a
humane side because it deals with people and their aspirations
and emotions and, in that sense, customer experience will really
matter. In this regard, products suitably customised to ensure
a seamless customer experience meeting their real needs and
solving their real challenges will need to be designed.
90
Annual Report 2022
PERFORMANCE NOTE FROM
THE MANAGING DIRECTOR & CHIEF
EXECUTIVE OFFICER
Dear shareholders and stakeholders,
It is an honour and privilege to connect with you through the
pages of this Annual Report as I share my views on City Bank’s
performance for the year 2022 and its future prospects.
At City Bank, we are
truly deepening our
purpose of adding
a human touch to
financial services,
especially in the lens
of digital financial
solutions, as we create
superior customer
experiences and serve
the community as a
force for good.
Mashrur Arefin
Managing Director & CEO
I thought it would be useful to you to have a summarised
version of the journey of the Bank in the year under report,
and that is what I have drafted below before taking you
through some of the other important aspects of the reporting
narrative.
Operational summary
The world has changed dramatically in recent years, particularly
during the pandemic, which caused shock waves that caused
macroeconomic volatility. The year 2022 was an unpredictable
period as well, as the fading of the major pandemic event
did not give the world a pause as another major event was
in the offing comprising Russia’s special military operations
launched in Ukraine in February 2022, with the war continuing
to wreak a humanitarian, economic and cost-of-living crisis
across the world.
Amidst these major upheavals, customers continued to
adopt digital lives with a greater appetite during the year,
incorporating digital technologies into almost everything
they do. What is most interesting is how digital is being used
in everyday finance, with the most vivid example being how
small payments, such as the purchase of a cup of tea, is
being done digitally in a cashless manner. QR code payments
is another example of the rapid evolution of digital financial
services in Bangladesh.
In the meantime, while this is playing out, the reality of climate
change has hit home hard with the importance of sustainability
that can no longer be ignored. Bangladesh is a signatory of the
Paris Climate Agreement and the government has articulated
a climate action plan in this regard through the Nationally
Determined Contributions or NDCs. City Bank has always been
an advocate of sustainable growth that is manageable year
Annual Report 2022
91
after year and, in this realm, we have built our culture, systems
and practices around how best we can nudge and contribute
to the greening of the economy.
So in response to these winds of change, at City Bank, we
have taken decisive steps to reinforce our fundamentals even
further by refining our long-term strategy, ensuring that we
stay relevant and viable in the long run.
We are truly deepening our purpose of adding a human touch
to financial services, especially in the lens of digital financial
solutions, as we create superior customer experiences
and serve the community as a force for good, remaining
committed to making a difference in the lives of our customers
and communities.
Our strategic thrusts therefore reflect the importance of
putting our customers at the front and center of all we
do. In the most direct sense, we want to improve upon our
customer-centricity by curating personalized products and
services that provide meaningful solutions to our customers
throughout their journey with us. This will be largely driven by
accelerating digitalisation and technological modernisation,
as well as significantly strengthening our back-end and frontend systems in order to create a thriving connected digital
ecosystem.
We will not limit our expansion to metropolitan areas, but
will also continue to improve our regional services and digital
touchpoints in order to expand our market presence in
Bangladesh and strengthen the Bank’s position throughout
the country.
Our agent banking and sub-branch model are a striking
illustration of this endeavour as we focus on taking our banking
platform to the masses, right at their doorstep. It is also clear
to us that this is the most viable model for financial inclusion
to at least get the unbanked populations to get onboarded by
opening an account with us. This is the starting point of how
formal financing can play a transformative role in their lives,
be it through accessing a microloan, or getting into the habit of
savings. City Bank is proud of its role in this important journey
of our customers.
Deepening the Bank’s reputation and positive impression
among stakeholders, much of our future expansion will be
based on unique and differentiated offerings, such as loans for
pre-used cars and holistic banking solutions for freelancers,
amongst others. Simultaneously, in order to establish a
pioneering presence in Islamic banking, we will increase our
Shar’iah-compliant solutions to new consumers as well as
92
Annual Report 2022
within current relationships with our broader customer base,
particularly in Employee Banking and City Alo. We desire to
extend and expand our City Islamic platform in a sustainable
and regulatory-compliant way. Our focus here is not just
market share but how our fully Shari’ah-complaint offering is
the most authentic model of Islamic banking to align to the
purity of the religious beliefs of customers who want to avail
Islamic finance service.
Focused on accomplishing sustainability leadership in banking,
we will continue to accelerate our internal de-carbonization
efforts and assist our customers in transitioning to lowcarbon operations. Thus, we will ensure more meaningful
intermediation in green and sustainable finance, not only in
doing but also in reporting, the emphasis of which is reflected
in the publication of our Bank’s first-ever Sustainability Report
2022.
At City Bank, with the expansion and diversification of our
product and customer portfolios, we will strive to fortify our
ethical and sustainable standards, assuring the success of
our evolution to serve generations of customers as one of
Bangladesh’s most modern bank with a history of customer
excellence.
A satisfactory year
I will always look back at the year 2022 with pride as
we navigated an uncertain and complex macroeconomic
environment with relative ease thanks to the strong
foundations that we have patiently built over the years. Our
platform-building focus has remain unchanged that has
enabled us to stand tall at all times.
As economies fully reopened and border restrictions were
completely lifted in 2022, consumer spending returned
and external demand improved. Against better economic
prospects and our ability to monetise those opportunities, our
net interest income or NII grew by 2.6% to Tk. 12,359 mn, up
from Tk. 12,048 mn in the previous financial year.
All of the Bank’s business divisions performed well in 2022,
and a granular segmentation exhibits that the new businesses
seeded in the recent past grew at a faster clip as their
proposition resonated well with their target customer base.
The mature and well-established business wings of the Bank
grew at a slower pace but on a much higher revenue base.
Thus, collectively, the Bank generated a sound performance
and that too with overall NPLs (non-performing loans)
registering a sharp drop of a 100 basis points to stand at 3.9%
in 2022. This is well below the industry average that hovers at
Supported by our robust capital levels, the Board declared a
total dividend of Tk. 1.2 per share for 2022, translating to a
dividend payout of 31.9%, as per our dividend payout policy.
We are committed to enhancing long-term value in the hands
of our shareholders.
On the liability front, CASA witnessed strong growth, scaling
up from 46% in 2021 to 51% in the year under report. This
was primarily on account of broad-based normalisation of
economic activity and our all-out efforts in garnering retail and
corporate deposits.
Delivering differentiated digital experiences to our customers
The strength of our deposit franchise is clearly evident in the
Bank being able to grow its CASA significantly despite offering
lower-than-market interest rates. This demonstrates that
stability and long-term nature of our deposits as our depositholders prefer safety of their capital over higher short-term
risk-prone returns. At the same time, it was also evident
that customers opted to move their excess funds into higher
yielding products, such as fixed deposits, amid the rising
interest rate environment.
The rising rate environment has resulted in higher cost of
funding, which limited the upside to net interest margin
expansion. However, our liquidity indicators such as liquidity
coverage ratio and net stable funding ratio remained healthy
at 220.14% and 103.09%, respectively.
Meanwhile, cost growth accelerated in 2022 by 23% YoY to Tk.
12,761 mn as inflationary pressures persisted throughout the
year and revenue-related spend was incurred. The increase in
cost was mainly led by inflationary-related adjustments under
personnel costs, higher general operating expenses, etc.
Our cost-to-income ratio stood at 51.9% versus 48.6% in
2021. Given the satisfactory total operating income growth,
pre-provisioning operating profit rose to Tk. 11,827 mn in
2022, up from Tk. 11,000 mn YoY.
We continued to manage our asset quality vigilantly during
the year. Yet, we have kept aside higher provisions in 2022
as a measure that rests on abundant caution. Thus, loan
provisioning was mainly attributed to preemptive provision
as well as provisions made for existing and newly impaired
accounts. Our provisioning coverage ratio stood in excess of
100% during the year.
On the back of higher provisions, our profit after tax witnessed
a slight de-growth by 5% to Tk. 4,508 mn for the year. During
the current year our full focus is on profit recovery and
sustainable profit expansion.
In the spirit of providing different and differentiated digital
experiences to our customers we want to emulate consumer
companies for whom digital innovation is an imperative that
cannot be ignored.
From very early on, City Bank recognised the merits of
digitalisation for our customers. In ensuring we stay ahead of
the digitalisation curve, we continue to innovate and develop
first-to-market digital solutions to fortify our digital banking
position and propositions. These include our digital nano loan
product in a pioneering partnership with bKash that received
an unprecedented response as eligible customers saw the
simplicity and ease in taking out a small loan digitally to help
them tide over any current liquidity challenges. Furthermore,
we have also introduced a new brand for our ATM/CDM
network under “City Smart” with our smart kiosks doing much
more than helping customers only withdraw cash, but also in
helping recycle cash, including facilitating instantaneous cash
deposits.
Leveraging our robust data analytics capabilities, we meet
our customers’ needs while converting their pain-points
into strategically curated end-to-end digital solutions.
Improvement in speed and convenience are among our key
focus areas in delivering a differentiated customer experience
in digital services.
As our digital transformation expands accessibility, we are
doubling-up on our efforts to ensure a safe and secure
banking environment for our customers, especially for internet
and mobile banking services. With more customers shifting to
digital platforms, we have strengthened our online banking
security through enhanced authentication safeguards, etc.
The driving force of our digital transformation is our strong
digital culture, manifested in the way we work and serve our
customers. Our efforts have gained numerous recognitions
in the industry. Most notably, City Bank clinched numerous
awards in terms of innovation culture and best practices.
Testament to our digital strength is the large digital user base
we serve and our growing online transaction market share. As
at 31 December 2022, we recorded no less than 0.4 mn active
users on our digital platforms.
Annual Report 2022
93
Management Commentary
around 9-10% and reflects our accomplishments in rigorous
credit screening to onboard quality accounts, and efficient
collections strategy. Having secured these main pillars, we can
look to scale up our asset book and yet manage pristine loan
book quality.
Building the workforce of the future
Building the right culture is at the heart of our people
management practices. As a Bank, having the right culture
is more important to me than any kind of learning and
training. Though skills are important, the right attitude,
ethics and values are more important. Thus, our performance
assessment metrics not only take into account performance
of an individual, but also how the performance was achieved.
Was it aligned to the Bank’s Code of Conduct? Were there any
transgressions?
programs anchored on both structured and flexible learning.
While identified learning gaps are plugged-in through prearranged training programs, we also promote anytimeanywhere learning through digital modules that helps our
people constantly build and sharpen their capabilities.
I thus envision a workforce that is robust and innovates as
well as iterates solutions for customers through collaboration,
empowerment and customer-centricity, while staying true to
the Bank’s core values. This is not idealistic but something that
is for real at City Bank.
In this regard, it is important for me to mention that our
robust office policies play a huge role in shaping the culture
of our organisation. These help safeguard our operations
and our reputation. We are serious about any malpractice
being brought to light through our whistle-blower policy, or
preventing financial fraud or terrorist activities through our
anti-money laundering and anti-terrorist financing vigilance
mechanisms.
A heartfelt thanks
Having said this, we have been building the capabilities of our
people to shape a next-generation workforce or a workforce
that is fit for the future, that is not only digitally-savvy and
customer-centric, but sustainability-conscious too.
I would like to acknowledge the contributions of our Board
members, our ManCom team and all employees for coming
together at a time when this was really needed, further
building the Bank into an organisation we can all be proud of.
In line with our purpose of nurturing a productive workforce,
we seek to equip our employees with the right tools
and capabilities to effectively and successfully drive
transformation as per the Bank’s strategy and in adherence
to its policies that guide any decision-making, while enabling
a work environment that fosters closer collaboration. We are
therefore offering cutting-edge training to develop more
dynamic, digitally-inclusive and solutions-oriented leaders
who are entrepreneurial in their thinking and mindset.
I would also like to thank all our other stakeholders –
customers, shareholders, regulators as well as our network
of partners. All of you are important to City Bank, and we will
continue to endeavour to be a value-multiplier for you.
The ability to change, meanwhile, requires an agile mindset.
Towards this end, we are also running practical learning
Mashrur Arefin
Managing Director & CEO
94
Annual Report 2022
The most heart-warming aspect of financial year 2022 has
been the realisation that City Bank overcame the challenges
that surfaced during this prolonged pandemic and war and
emerged more determined than ever to achieve its goals.
Our resilience is the result of many factors, not least being a
shared vision and values.
Thank you for believing in us.
Sincerely,
Management Commentary
City Bank’s competitive levers
One of Bangladesh’s largest private
sector commercial Bank through
subsidiaries, having a presence across
categories and segments of the financial
sector of Bangladesh
A relatively high mix of floating loans
which will benefit from loan repricing
will continue to support net interest
income (NII) and overall earnings
With rising impetus for its Bank
technology initiatives, strong execution
and favourable long-term macro
tailwinds, City Bank will be able to
sustain its profitability, with market
share gains in all segments led by digital
Healthier loan book quality, as a majority
of the back book clean-up has been
done, and the pace of loan recoveries
has been stepped-up
Highly efficient liability franchise, robust
capital ratios, strong provisioning coverage
ratio, and steady asset quality are some of
the key strengths of the Bank
City Bank is amongst the few Bank
stocks available at reasonable
valuation with high growth visibility
Revival in consumer demand and rise in
private capital expenditure, followed by
rise in government spending, are major
growth triggers in the future
Annual Report 2022
95
City Bank accomplished a successful all-round performance in 2022,
resulting in satisfactory growth with continued investment in capacity
building and better balance sheet management. We will continue with our
performance improvement focus in 2023 and beyond.
Md Mahbubur Rahman
Additional Managing Director & CFO
96
Annual Report 2022
STATEMENT FROM THE
CHIEF FINANCIAL OFFICER
Dear Shareholders,
Thank you for taking the time to go through our Annual Report.
We remain committed to the important pillar of investor
communication and it is reassuring how our shareholders
have appreciated the quality of the communication, narrative
and explanations in our Annual Report. We will continue to
make progress on this front and it is something that receives
my prioritised attention.
Our vision for City Bank is to be the leading financial services
destination that is inclusive and harbours the mission of
becoming the most loved and preferred Bank in Bangladesh.
We are committed to building a future of shared prosperity
and this reflects our deep commitment to deliver both
financial value and positive social outcomes for our multiple
stakeholders. This is increasingly achievable as the Bank
harnesses its core business activities judiciously and
conscientiously to the economy to add value to customers and
the society – profitably and at scale.
There are already multiple examples of the Bank’s operating
businesses tackling a wide array of customer solutions
through innovative product and distribution strategies, whilst
remaining focused on driving economic growth and superior
returns for shareholders. These two are mutually inclusive and
have the potential to create new sources of value for the Bank.
As such, they form the foundation for our sustainable future
and we are working hard to rigorously measure and report
progress on these fronts.
City Bank’s earnings remain fully tilted towards Bangladesh’s
economy and are primarily generated by its large lending and
transactional franchises, which have resulted in a deep and
loyal customer base. Our domestic banking operations are
mature and systemically important. Against the prevailing
backdrop of a challenging macro-economy, given the City Bank
Group’s size, any aspiration to outperform requires strategic
distinction combined with sound execution. These remained
our major focus areas in 2022.
The key growth imperative in the domestic franchises is to
grow customer numbers, do more business with customers
through relationship banking, and do this more efficiently.
In the broader Bangladesh portfolio, City Bank is growing
its offering across the nation where it believes it can build
competitive advantage and scale over time. The Bank’s
expansion strategy has been largely organic and there is a
Annual Report 2022
97
strong focus on building-out customer and deposit franchises
faster and more sustainably.
The Bank’s business continued to navigate a slowing economic
environment with remarkable resilience, as demonstrated in
the results for the year ended 31 December 2022, anchored
on the primary strategies of strengthening the balance sheet,
building available financial resources, and positioning the Bank
to grow into a post-pandemic recovery.
The financial results for the year 2022 were satisfactory,
achieved amidst a macroeconomic environment that did not
escape the heightened global economic uncertainty brought
about by the war in Ukraine, an inflation leap across almost
all essential commodities and, given this, major central banks
incresing interest rate.
Bangladeshis also had to deal with the damage brought about
by the recurrent floods in Sylhet and power interruptions
amidst a sharp jump in energy costs due to inflation. These
factors saw a macro landscape characterised by an interest
rate tightening cycle and relatively lower business and
consumer confidence. The housing and labour markets did,
29,135 mn
331,890 mn
354,744 mn
14.5%
Key Financial
Blueprint, 2022
3.9%
Total loans and advances
City Bank's total loans and advances increased to Tk. 354,744 mn, up sharply from Tk. 286,380 mn in 2021.
Total deposits
Capital Adequacy Ratio (CAR)
City Bank's total deposits rose to Tk. 331,890 mn in 2022,
up significantly from Tk. 282,064 mn in the prior year.
City Bank's CAR improved to 14.5% in 2022, up from
14.2% in 2021 due to successful capital mobilisation
activities.
Market capitalisation
Non-performing loans
City Bank's m-cap stood at Tk. 29,135 mn, comprising
4.4% of the total domestic banking sector's m-cap.
City Bank's NPLs reduced sharply from 4.9% in 2021 to
3.9% in 2022, representing a substantive moderation
by 100 bps.
however, hold up relatively well over the year under review, with
the unemployment rate remaining at relatively low levels, with
inflation-adjusted wage growth staying solid. Thus, the famed
Bangladeshi resilience was in full display during the year, with
the structural levers kicking-in against the economic odds.
our operational scale as well as our focus on horizontal and
vertical integration. Hence, the underlying composition of the
Bank’s earnings growth and superior return profile directly
correlates to our consistent and disciplined execution on our
preset strategies.
As a Bank spread across business, customer and consumer
horizons, we were able to strongly make an impact through
The Net Interest Income or NII, the Bank’s key performance
measure, defined as net income accrued after deduction of
98
Annual Report 2022
Rising operating expenses in an inflationary environment does
induce cost pressures and at City Bank it was no different. Yet,
the Bank’s strong cost discipline and expense management
enabled a controlled growth in total operating expenses to Tk.
12,761 mn, from Tk. 10,403 mn in 2021.
Total operating income grew at 15% vs. total operating
expenses at 23% in 2022, which is my primary point of
optimism from the view here at Finance. We were successful
in sharply cutting back on expense growth. Thus, the Bank
could add a net amount of Tk. 827 mn to its pre-provisioning
profit to take it to a sum total of Tk. 11,827 mn for the year.
As a precautionary measure, the Board took the decision
in conjunction with the view of the Management to raise
provisioning coverage in 2022, with the result that provisions
kept aside for loans and advances grew by about 64% to Tk.
2,943 mn during the year. With this, though the total profit
before taxes rose, the net incremental amount was only to the
tune of Tk. 430 mn to a gross value of Tk. 8,884 mn for the
year in review. Furthermore, total tax expenses also rose by
about 18% to Tk. 4,377 mn in 2022, which together with the
other line items as discussed above compressed net profit,
resulting in a degrowth of 5% to Tk. 4,508 mn for the year.
City Bank continued to be discerning in pursuing growth
emanating from the rebound that immediately followed the
pandemic, popularly what is called “pent-up demand”. There
was a particular focus on allocating financial resources to
growth opportunities tilted to the Bank’s macro view, whilst
continuing to serve the needs of its customers. Identifying and
originating quality new business has been a fine balancing act
given competitive actions in the market and the level of real,
although uneven, recovery taking place in the economy. While
the Bank remained cautious on loan origination, total loans
and advances registered a healthy growth of 24% in 2022,
with all of the Bank’s business segments registering growth
during the year, with lending portfolios sloped towards goodquality, lower-risk customers.
What was most satisfactory was the sharp growth
accomplished in the books of Digital Nano Loans with a total
disbursement of more than Tk. 1,000 mn with NPLs of only
1.13%, thus attesting to a high-quality loan book. There exists
significant headroom for growth for nano or microloans in
Bangladesh and the maturing profile of the business could not
have come at a more appropriate time. Notably, led by digital
processes, the customer acquisition and servicing cost of this
business model is typically low.
In addition, Women and Islamic Banking also represented
key thrust areas and a number of new products with unique
value propositions were launched during the year with a view
to grow these businesses. Furthermore, Citytouch helped
channel transactions of over US$ 3 bn in 2022, which points
to enhanced digital financial adoption and also enhanced
adoption of Citytouch as a preferred banking platform for
facilitating the digital life of customers.
Circling back to City Bank, the scramble for deposits was real
for the domestic banking industry, similar to elsewhere in the
world. Amid this competition for deposits, City Bank was able
to register a sharp growth of 18% in deposits, which is a sign of
the growing trust and faith of people in City Bank to meet their
goals in savings and investment. Further, though the Bank
offered mid-market savings and term deposit rates, this did
not deter deposit-holders, them likely preferring the safety of
their funds vs. high untenable rates.
Particularly, the Bank’s CASA galloped to its highest-ever level
of 51% in 2022, registering a substantive 500 bps growth over
46% in the prior year. One of the prime reasons attributable
to this is the strong focus on our customer segmentation
strategy and our emphasis on Women, Islami and Employee
Banking, amongst others. A strong pool of low-cost deposit
gives a fillip to net interest margin, which stood at 4.3% for the
Bank in 2022.
The Bank also remained in a capital accretive mode during the
year, garnering Tk. 7,000 mn through issue of subordinated
bonds in the biggest-ever bond issuance by the Bank. This
helped improve capital ratios, with CET-1 and CRAR standing
at 8.5% and 14.5%, respectively, during the year.
One of the key challenges of 2022, which was extraneous
and beyond our control, was slowdown in global trade
and significant devaluation of the Tk. against the USD that
Annual Report 2022
99
Management Commentary
interest expenses from interest income, expanded by a handy
2.6% to Tk. 12,359 mn in 2022 from Tk. 12,048 mn in the prior
year. In a rising interest rate environment where our interest
payments surged by 52% to Tk. 13,198 mn in 2022, up from
Tk. 8,678 mn in 2021, we were able to accomplish creditable
interest income growth of 23% to Tk. 25,557 mn in 2022, vs.
Tk. 20,725 mn in the prior year. Furthermore, other income
growth of around 31% to Tk. 12,229 mn helped buoy total
operating income, which expanded by about 15% to Tk. 24,588
mn in 2022, up from Tk. 21,403 mn in the prior financial
period. To me, achieving this growth is the corroboration of
our strategies as we focused on implementation and delivery
of our targets.
impacted the Bank’s trade business. Besides, weak capital
market performance also depressed income stream from this
channel. Thus, relatively slow growth in non-interest income
and high provisions were the key factors that undermined net
profit growth during the year.
quantitative easing. I believe structurally higher interest rates
Going forward, I believe normalisation trends will characterise
the current year. Looking more broadly and further out, there
are some profound trends emerging from a changing global
landscape.
City Bank is extremely cognizant of what this means for its
The major adjustments taking place currently across the world
have their roots in the global financial crisis from which three
powerful themes emerged: ultra-low policy rates, ultra-low
inflation and significant quantitative easing by central banks.
adapt to and navigate such a scenario.
Then the pandemic struck.
positive revaluation in our share price and continued value in
The path out of the pandemic saw inflation begin to rise,
triggered by supply chain issues, food and energy crisis and
for a while these were considered to be transitory. Then
underlying inflation began to rise sharply across the world,
driven by wage inflation, and is now no longer considered to be
transitory but semi-structural. The retreat from peak inflation
will take time.
At the same time central banks have responded, pushing
through sharply higher policy rates and withdrawing
100
Annual Report 2022
and higher inflation compared to the levels experienced in
the last decade will persist. This will present a new set of
challenges for corporates - lower growth, lower margins and
higher costs.
operating environment and the customers it serves. At the
Bank we believe that our purpose, our current strategies and
our financial resources are well-calibrated to successfully
Thus, we remain committed to sustainable long-term
shareholder value as our competitive levers kick-in to
distinguish our performance, thus setting the foundation for
the hands of all our owners.
Thank you for being on the journey with us.
Sincerely,
M. Mahbubur Rahman
AMD and CFO
Deposits
BDT in million
Loans & Advances
BDT in million
205,170
246,704
254,781
282,064
331,890
231,391
246,944
268,202
286,380
354,774
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Total Assets
BDT in million
Earning Assets
BDT in million
324,780
354,689
382,926
416,902
506,847
275,954
292,278
327,906
350,939
433,969
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Shareholder's Fund
BDT in million
Net Asset Value Per Share
BDT
24,430
25,416
28,818
31,224
32,845
25.2
25.0
28.4
29.3
27.4
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Annual Report 2022
101
Management Commentary
PERFORMANCE
AT A GLANCE, 2022
NPL Volume
BDT in million
NPL (%)
12,326
14,244
10,850
13,906
13,671
5.3
5.8
4.0
4.9
3.9
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Dividend (%)
Stock Performance
BDT
11.0
15.0
22.5
25.0
12.0
30.2
21.1
24.8
27.3
21.8
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
14.2%
14.5%
Cost-to-Income Ratio (%)
58.0
54.7
CRAR & Tier-1 Ratio (Solo)
57.9
48.6
51.9
15.2%
15.5%
13.4%
8.3%
2018
2018
102
2019
Annual Report 2022
2020
2021
2022
9.7%
2019
CRAR
10.8%
10.6%
2020
2021
Tier-1
9.6%
2022
Context of Operations
ECONOMIC AND
OPERATING ENVIRONMENT
Overview
In 2022, Bangladesh and ASEAN nations reopened their economies after the worst of the pandemic was over, leading to strong
GDP recovery. While ASEAN-6 growth picked up by 5.7% (2021: 4.1%) with the reopening of economies, global GDP growth (2022:
3%; 2021: 6%) was moderated by worldwide central banks’ move to address rising inflation. In addition, ongoing geopolitical
uncertainties also contributed to the more moderate global growth.
Global GDP is anticipated to grow more moderately at 1.9% in 2023 (2022: 3% YoY), arising from a higher inflation and interest rate
environment, which is expected to impact major advanced economies unfavourably.
BANGLADESH
FY2022-23 (P):
5.5%
FY2021-22:
7.1% (IMF)
GDP growth
2022 Operating Landscape
Positives:
•
Full reopening of the economy led to real GDP growth surge amid pent-up spending and normalisation of business
activities
•
Political stability with proactive government action on policies for ease of doing business
•
Establishment of mega infrastructure projects, such as the Padma Bridge and Dhaka Metro
•
Exports growth, underpinned by the rise in commodity prices and RMG demand
•
Advancement in actual/realised private sector investment
Negatives:
Higher inflation and interest rates
amid increase in global commodity
prices due to the war in Europe and
recurring lockdowns in China that
disrupted global supply chains
High cost of living affecting
households, and rising cost of doing
business
Stronger US dollar against Tk. amid
aggressive interest rate hikes by
the US Fed, further exacerbated by
depleting reserves
Annual Report 2022
103
Outlook, 2023:
•
Lower real GDP forecast in 2023, primarily reflecting
slower consumer spending and external trade growth
•
Bangladesh Bank may continue to potentially hike policy
rates, with the current repurchase rate standing at 6% (up
from 5.75% at year 2022 close)
•
Potential upsides include shallower and shorter global
recession, faster-than-expected economic growth in
China, interest rate cuts, and de-escalation in geopolitical
tensions
•
Downside risks include prolonged slow global economic
growth, higher inflation due to changes in domestic
policies on subsidies and price controls, higher external
and domestic policy interest rates, continued geopolitical
uncertainty, and emergence of new variants of COVID-19
•
Mitigating factors to curb uncertainties include drawdown
of excess savings to buffer consumer spending, domestic
capex recovery, and a pro-growth government stance
•
Possibility of unrest due to upcoming elections
•
Bangladesh Bank took necessary policy measures,
including open market operations, issuing BB bills
and tightening policy rates to manage money market
liquidity conditions
•
The overall balance of payments witnessed a deficit
of US$ 3.7 billion during July-April of FY2022, exerting
depreciating pressures on the exchange rate
•
Private sector credit increased by 12.94% YoY at the
end of May 2022, as against an increase of 7.55% in
the corresponding period of the previous fiscal year
•
Large and medium-scale manufacturing output
registered 17.05% growth during the first 8 months
(July-February) of FY2022, while it grew by 4.15%
during the corresponding period of the previous fiscal
year
Banking sector review and outlook
Review, 2022
•
The sector benefitted from economic reopening and
recovery of business activities
•
Mortgage lending and consumer financing remained
robust, while lending to businesses, especially SMEs,
picked up pace
•
Banks faced liquidity stress as Bangladesh Bank sold
over US$12 billion from January-December 2022
to banks to address dollar shortages which in turn
mopped up an equivalent amount of local currency
from the banking system
•
Foreign currency reserves in Bangladesh dropped
to US$33.74 billion on December 29, 2022, from
US$48.6 billion in August 2021
•
The exchange rate rose sharply to Tk. 108 from Tk.
84.8 against the US dollar within a year
•
Bangladesh Bank approved floating rate of dollars on
September 14, 2022
Source: MPS FY2022-23
Outlook, 2023:
•
Loans growth is expected to normalise in tandem with domestic economic growth
•
With deposit competition increasing and higher cost of funds, we anticipate that NIM will potentially remain flat or contract
•
Credit costs are expected to remain relatively moderate as banks have built substantial pre-emptive provisions and are wellpositioned to weather through slower growth
•
Banks will look to increasingly focus on digital financial services to accomplish the twin objectives of increased scale and
profitability
104
Annual Report 2022
Within this context, at City Bank, we sought to strike a
balance between seeking new growth opportunities as well
as managing our risks and threats. We maneuvered cautiously
while building the right capabilities and competencies to
continuously deliver value to our stakeholders amidst
the uncertainties. We unpack the key trends that broadly
characterised our operating environment and economic
outlook in the year 2022.
The most significant trend in early 2022 was a gradual, yet
discernible global economic recovery with the resumption
of business activities along with the reopening of borders
and easing of restrictions. This recovery however lost steam
and was dampened by market volatilities amid inflationary
pressures and higher interest rates, primarily stoked by the
Russia-Ukraine war.
Banking and financial services
Operating landscape impact
•
Higher interest rate environment was somewhat offset by increased provisioning and potential loss of other operating
income due to an unfavourable external trade environment and weak capital market
•
Economic environment remains uncertain due to emergence of new COVID-19 strains and supply chain logjams
•
Prolonged market volatility and heightened geopolitical tensions have raised concerns on asset quality and noninterest income, while probable recession casts a shadow on fiscal stability
•
More customers expect banking products and services that are personalised to their needs and available digitally
•
There is also an increasing threat of cybercrime and frauds
Material risks and opportunities
•
Ever-evolving customer
demand gives rise to the
need to develop localised
and personalised
data-driven solutions
and products that
complement the Bank’s
financial offerings
•
Increased potential to
expand product offerings
and scale-up digital
innovations, especially
for the SME segment
•
Increased need to
manage asset quality
and hence sustain a low
NPL environment (Bank’s
NPL 2022: 3.9%, down
from 4.9% in 2021)
•
Surging demand
for unique banking
propositions and
financial planning as
more customers seek to
safeguard their savings
and investment against
external volatility
City Bank’s response
•
Unveiled product suite that transcends traditional banking capabilities to meet holistic end-to-end needs of customers, the
prime example being our digital nano loan product which eligible bKash customers could directly draw into their bKash wallets
•
Enhanced and expanded our straight-through processing capabilities to provide seamless customer experience and account
onboarding
•
Provided expedient and intuitive offerings, with an emphasis on cashless and contactless capabilities
•
Nurtured SMEs by equipping them with relevant and time-bound financial solutions to help them make better operational
and financial decisions
•
Ensured ESG-conscious credit screening with a focus on helping companies transition to green and environment-friendly
operations
•
Enhanced cyber security measures as we scaled up our digital operations
Annual Report 2022
105
Context of Operations
Broader operating context
Outlook and priorities, 2023
City Bank anticipates a sluggish economic climate as a result of
deteriorating sentiment and persistent inflationary pressures.
Consequently, we will refine our strategic focus in order to
develop more solid foundational capabilities for long-term
shareholder returns.
We intend to strengthen our customer-centricity by
implementing an agile and resilient product strategy that
focuses on reimagining the customer journey for both our
retail and corporate customers. We will also utilize our data to
better comprehend the consumption patterns of our diverse
customer base and provide them with an experience that is
genuinely hyper-personalized and meaningful.
Cybersecurity remains a top priority as we increase online
security measures and raise awareness of cybercrimes
to safeguard our operations and secure our stakeholders’
financial assets.
The economics of climate action
COVID-19 notwithstanding, the climate crisis continues
to be the most pressing global issue. The most recent
Intergovernmental Panel on Climate Change (IPCC) Report
highlighted the rapidly closing window for the world to
take immediate, substantial and pervasive action to reduce
emissions levels that limit warming to 1.5°C to 2°C above
pre-industrial levels.
In the next 20 years, if current trends continue, global
temperatures will exceed 1.5°C, bearing with them extreme
weather events, environmental disasters and biodiversity
loss. Damage to physical assets and infrastructure,
destruction of natural habitats, loss of coastal and agricultural
land, human displacement, and depletion of resources as a
consequence of climate change imperil economic systems
and livelihoods.
The most recent estimates of the economic impact of climate
change indicate devastating consequences. In the worst-case
scenario, where no additional actions are taken to reduce
emissions, global temperatures could rise by up to 3.2°C by
2050, resulting in an 18% decline in global GDP.
Achieving a net-zero economy is essential for preventing
catastrophic climate change. Countries at the UN Climate
Change Conference (COP26) made collective commitments
to reduce methane emissions, stop and reverse forest loss,
align the finance sector with net-zero emissions by 2050,
106
Annual Report 2022
accelerate the phase-out of coal, and end international
financing for fossil fuels, among other measures.
As government efforts intensify, industry players – corporations
and businesses of all sizes – must also assume responsibility
for their climate contributions. It functions as a useful reminder
that climate action offers more gains than losses.
According to a report by Bangladesh government’s Ministry of
Environment, Forest and Climate Change, Bangladesh is one of
the most susceptible nations to the effects of climate change,
which poses a significant threat to the country’s sustainable
development.
Bangladesh has therefore adopted a two-pronged approach
to combating climate change: the primary focus of the
nation’s activities is on enhancing resilience to the effects of
climate change, while the country also strives to reduce its
greenhouse gas (GHG) emissions. This balanced approach is
reflected in its Nationally Determined Contributions (NDCs)
submitted to the UNFCCC in September 2015, which pledged
to reduce GHG emissions in the power, industry and transport
sectors by 5% below “business as usual” GHG emissions by
2030 unilaterally, and by up to 15% below “business as usual”
GHG emissions by 2030 if sufficient and appropriate support
is received from developed countries.
The Paris Agreement now transfers its focus to
implementation. The Bangladesh NDC implementation
roadmap includes cross-cutting NDC implementation issues
and NDC Sectoral Action Plans for the power, industry and
transportation sectors to ensure that NDC implementation
moves forward in a holistic and effective manner. In accordance
with the balanced approach, these sectoral action plans detail
the steps that must be taken to achieve the GHG reduction
goals outlined in Bangladesh’s NDC, as well as the steps that
can be taken by these sectors to strengthen their climate
resilience.
Unlocking high-growth industries, such as renewable energy,
energy efficiency and low-carbon transportation requires a
coordinated and continued effort between government and
financial institutions. While the COVID-19 stimulus packages
demonstrated the capacity for radical and extensive financial
commitment and political will, the same could be demonstrated
for meeting the climate goals. Banks and other financial
institutions will continue to remain a vital channel partner for
government and other institutional funds to be deployed for
climate action in meeting the climate goals. In themselves,
banks can also garner international developmental funds for
accelerating green and sustainable finance activities.
Overview
The sustainability of our operations continues to be the
primary focus and focal point of our strategic objectives.
In this context, City Bank’s model of customer-centric banking
is the very definition of sustainability, which remains at the
core of our strategic priorities. The Bank is engaged and aligned
with its stakeholders towards attaining its strategic priorities
and sustainability goals, in accordance with its purpose and
mission to facilitate economic and social mobility and enrich
lives.
Inspired and guided by the same, the Bank endeavours to build
upon its fundamental values and continuously enhance its
credibility by integrating sustainability more thoroughly into
its businesses, operations and citizenship activities.
Considered a significant step in advancing sustainability across
its primary business segments, City Bank has begun working
towards an early ratification of the green and sustainable
finance taxonomy guidelines issued by the Sustainable Finance
Department of Bangladesh Bank in December 2020. In this
regard, the Bank’s credit policy and internal credit proposal
Strategic priorities
Delivering sustainable financial returns
Disciplined execution
documentation and screening have been reviewed and
updated to include mandatory ESG (Environmental, Social, and
Governance) inspection as part of the pre-credit assessment
in order to qualify customers for additional benefits under
sustainable financing.
Simultaneously, a series of awareness workshops are
organized to develop the capacity of managers and frontline
employees, in particular to enlighten them on the significance
of pre-credit due diligence. In the future, the Bank intends to
bolster these efforts through the introduction of sustainability
audits and other initiatives that promote a paradigm shift in
favour of green and sustainable businesses.
On the business front, City Bank continues to make a
significant contribution to sustainability through initiatives
aimed at addressing liquidity shortages by bolstering its
CASA, and boosting its credit lending activity by developing
regulatory-compliant products, with a particular emphasis on
digital financial products, that are the right product-market fit.
Additionally, the Bank is committed to developing products
that promote a greater community impact.
Our key strategic themes and priorities are discussed below.
What do they mean?
Catalyse growth and accelerate
income and profitability across every
business segment by tapping on high
potential growth opportunities across
our area of operations.
Instil disciplined execution amongst
all levels of the organisation to
manage performance, improve
operational efficiency, and accelerate
sustainable growth.
Meeting stakeholder expectations
•
Build a robust business portfolio, with
promising shareholder returns
•
Champion responsible banking
operations that focus on sustainable
business growth
•
Ensure a data-driven and fact-based
dynamic asset allocation
•
Deliver on organisational goals and
targets
•
Reduce organisational complexity to
improve speed of decision-making
•
Focus on scale, impact and
profitability
Annual Report 2022
107
Context of Operations
OUR STRATEGIC PRIORITIES
Strategic priorities
Customer-centricity
Build out our fundaments
Remain purpose-led
108
Annual Report 2022
What do they mean?
Deliver on our customer excellence
propositions to make banking
simple, efficient and expedient, while
always going the extra mile for our
customers, which is essential in a
highly competitive market to retain
and grow our customer base.
Ensure our deposit and lending
activities have the right level of
support and a uniform set of
standards and guidelines to operate
optimally and with full accountability.
Advance customers and society
through our corporate values and
responsible banking practices,
shaping a better tomorrow and a
more sustainable planet.
Meeting stakeholder expectations
•
Deliver superior customer experience
consistently
•
Treat customers fairly and with full
transparency
•
Deploy agile solutions and accelerate
digitalisation
•
Make operational processes and
services delivery simpler, faster and
more efficient
•
Adopt a holistic approach to client
selection, credit underwriting, market
risks assessment, and collections
•
Drive modernisation and automation
of support functions
•
Enhance the compliance culture
organisation-wide
•
Leverage on learnings and best
practices through our membership of
the UN-convened Net-Zero Banking
Alliance
•
Build a culture that is reflective of a
purpose-driven organisation
•
Instill a mindset through our values
of fostering talent, passion, integrity
and accountability, collaboration and
customer-centricity
•
Demonstrate environmental
stewardship in own operations and
financing activities, and lend capital to
green and low-carbon projects
•
Reduce social inequality by enabling
financial inclusion, and by respecting
and promoting human rights
•
Encourage sustainable supply chain
practices
•
Adopt international standards and
principles for responsible banking and
values-based intermediation
Context of Operations
CONNECTING WITH OUR
STAKEHOLDERS
Our approach to building stakeholder trust
Team City Bank’s internal stakeholders include its employees,
Continuous and sustained involvement with our diverse and
varied stakeholders is essential for establishing a mutually
beneficial understanding and fostering long-term relationships.
customers, suppliers and service providers, regulatory agencies,
We believe that understanding the perspectives and
expectations of our stakeholders allows us to recognise
risks and opportunities, strike a balance between competing
interests, and make informed decisions. Additionally, such
engagements provide us the prospect to connect proactively
with our stakeholders and obtain useful input on our activities.
Our stakeholders are entities or persons whose actions are
anticipated to have a significant impact on the Bank’s capacity
to fulfill its aims and objectives. Based on this, we have
categorised our stakeholders as internal and external.
while external stakeholders include its owners, investors,
and the broader community.
Underpinned by a distinct management philosophy for each
stakeholder group, we have devised customised stakeholder
engagement solutions to connect with our stakeholders in a
meaningful and continuing manner. In addition to these normal
interactions, we also execute specific efforts to evaluate the
efficacy of our engagement approach and report on the results.
We feel that such methods develop trust, enhance stakeholder
satisfaction, and contribute to the maintenance of long-term
productive relationships, all of which boost our competitive
position vis-à-vis our competitors.
Methodology for stakeholder engagement
Stakeholders
Management
Approach
Uphold the
• Customer service
customers’ right
• Operational security
to a stable, secure
and progressive
Customers
– Borrowers
and depositholders
Matters Relevant to Them
banking platform
that provides a
superior service
experience
and promotes
customer choice
and convenience.
• Satisfaction on
products and services
• Market reputation
• Convenience
• Innovation and
custom solutions
• Timely and relevant
information updates
• Access to touchpoints
• Loyalty benefits and
rewards
• Grievance redress
Our Response
• Effective complaint
resolution
mechanism
• Service excellence
• Tech-driven
convenient banking
solutions
• Innovative products
and services
• Data security and
customer privacy
• Expanding touchpoints, including via
digital channels
Key Priorities
Capitals
Impacted
• Safe and
secure banking
experience,
including digital
solutions
Manufactured
• Safety of deposits,
assuaging
concerns around
the current global
banking crisis
Relationship
Capital
Read more on
pg 27
Social and
Capital
Read more on
pg 36
• Ensuring vast
swathe of retail
and corporate
loan products and
services
• Offer a variety of
deposit products,
including FDs
across rates and
tenors
Annual Report 2022
109
Stakeholders
Management
Approach
Ensuring longterm value and
upholding the
rights of the
Shareholders
and capital
providers
shareholder,
and supporting
a broader
shareholder
constituency to
ensure their value
maximisation.
Matters Relevant to Them
Our Response
Financial
Capital
• Maintaining
governance
standards and codes
• Managing liquidity,
credit risk, capital
adequacy and
discretionary costs
amid the economic
challenges
• Sustaining the
Bank’s reputation
and credibility
• Progressive
revenue and
business growth
pg 39
• Safeguarding asset
quality
• Proper pricing of
risk and strong
credit screening
and underwriting
Capital
• Integrate social
responsibility in
business planning
Social and
• Livelihood
development
opportunities
Read more on
• Alleviating
myriad local-level
challenges
Read more on
• Maintaining profit
consistency
• Views on key
governance and
policy matters
• Health of key financial
metrics
• Strategy and
business continuity
• Ensuring a
sustainable ROI
• Compliance and
conformance
Working in
conjunction with
our sustainability
mandate
Communities
and societies
comprising the
3P approach,
with emphasis on
safeguarding the
environment and
promoting people
empowerment
through
citizenship action.
110
Annual Report 2022
• Community capacity
building
• Socially-responsive
CSR model
• People
empowerment
• Transparency and
governance
• Social welfare of
communities
• Community
engagement and
trust-building
• Environmental
protection through
sound lending
decisions
• Donations and
philanthropic
contributions
Capitals
Impacted
• Financial resilience
• Shareholder
satisfaction regarding
the Bank’s financial
position and profile
• Regular
communication
Key Priorities
• Employee
volunteerism
• Need-based relief
and assistance
Read more on
pg 20
Intellectual
Capital
Read more on
Social and
Relationship
Read more on
pg 36
Relationship
Capital
pg 36
Natural Capital
pg 42
Management
Approach
Ensure compliance
with all legal
norms and
regulatory
Government
and
regulators
requirements.
Matters Relevant to Them
Our Response
• Prompt and proper
action on regulatory
updates
• Support to maintain
financial system
stability
• Policy formulation in
line with objectives
of Bangladesh Bank
and other relevant
banking regulators
• Impact on the real
economy comprising
MSMEs, etc.
• Supporting
sustainable
industrialisation
Key Priorities
• Maintaining
stability and
security of the
banking sector
Capitals
Impacted
Financial
Capital
Read more on
pg 20
• Playing a role in
nation-building
• Full compliance
with all regulations
and norms
• Rectification
measures on
supervisory
concerns
• On-time submission
of statutory returns
and obligations
• Contribution at
meetings/forums to
regulatory initiatives
Commitment to
create a conducive
environment for
employees to
Employees
develop and reach
their full potential.
• Ethical employment
practices
• Competitive rewards
and benefits
• Career progression
opportunities
• Attract and retain
the best talent
• Employee feedback
• Promote DEI
principles
• Rewards and
recognition
• Employee well-being
• Develop leadership
from within through
training and
development
• Career progression
and long-term
prospects
Human Capital
• Opportunities
for growth
and expertise
development
Social and
Read more on
pg 30
Relationship
Capital
Read more on
pg 36
• Encourage greater
engagement and
participation
• Effective handling of
grievances
• Foster collaboration
and team spirit
Annual Report 2022
111
Context of Operations
Stakeholders
DISTRIBUTION
OF VALUE
In order to keep our pledge to our stakeholders, City Bank distributes value produced in relevant and meaningful ways – and
for some stakeholder groups, this goes beyond just financial outcomes. In our endeavour to create a more sustainable future
for everybody, stakeholders get intangible advantages ranging from staff upskilling programs, to exchequer contributions for
national development.
City Bank’s value distribution model
Shareholder rewards of
Tk. 1.20 per share with
sound dividend yield
Taxes deposited to the
exchequer support development
of the economy
Tk. 10,633 mn
for the economy
Tk. 1,455 mn for
our shareholders
Tk.
26,378 mn
Tk. 7,288 mn for
our operations
Retained profits used
to fund future growth
across our diversified
operations
Tk. 7,002 mn for
our employees
Focus on industry-leading
and inflation adjusted
wages and salaries
112
Annual Report 2022
Context of Operations
COMPETITIVE ANALYSIS
UNDER PORTER’S MODEL
Overview
City Bank’s response
At City Bank, our operating landscape in Bangladesh is riddled
City Bank is aware of the competition in its working
environment. On a basic level, we think that our longstanding
tradition and experience continue to be our most powerful
competitive levers, while our size, scale, reach, impact and
influence continue to be our most formidable barriers to
competitive challenges.
with high competitive intensity, with a number of banks and
financial institutions – large, medium and small – fighting for
a slice of the market.
While banking rules and regulations are still evolving, market
participants have been enticed by the potential profits of an
unserved/underserved market. However, companies often
with lax governance standards and low motivation to serve
customers in the true spirit and best interests of finance,
remain vulnerable in the face of an inability to manage the
business and rising non-performing loans, especially in times
of heightened crisis situations such as the COVID-19 pandemic
and now the war in Europe.
Furthermore, we are continuously investing in our people
resources, technology, product portfolio and customer service/
experience in order to strengthen our competitive position. We
are cognizant of emerging FinTech competition and will continue
to prioritize our digital banking sphere as a strategy of securing
our market share. Thus, a sensible and prudent approach,
long-term thinking, and an emphasis on performance delivery
have helped us build a strong reputation, positioning us as one
Bangladesh’s domestically important commercial Bank.
Customer bargaining power
Rate sensitivity
Product portfolio
Yields and returns
• Attractive deposit rates
• Wide product suite
• Convenient switch-overs
• Customisation ability to suit
specific needs
• Strong focus on increasing
customer base
• Robust value propositions in
attracting customers
Supplier bargaining power
Depositor expectations
Capital sourcing
People relations
• Attractive deposit rates
• Strong credit rating of the Bank
• Robust talent management
• Planning in savings and
investment
• Safety of capital
• Best-in-class compensation
New entrants
FinTech
Regulations
Digital bank
• Strong competitive levers
• Alignment to regulatory
guidelines
• Suite of digital products
• Effective ability to thwart
competition
• Dedicated Digital Financial
Services (DFS) wing
Industry competitiveness
Service levels
Deposit products
Loan and advances
• Customer journeys
• Mid-market interest rates
• Attractive interest rates
• Service excellence
• Lower MQB
• Extended credit tenures
Annual Report 2022
113
City Bank’s operational environment trends and
responses
•
New entrants pose a threat:
This challenge is omni-present, especially with the pandemic
broadening the reach of technology-based financial services
businesses as customers turned to digital adoption. These
are often well-funded newcomers who have the potential
to disrupt the market. Furthermore, established banks may
turn to unsustainable and untenable actions that can create
further unevenness in the market.
CBL’s response
With a continuous IT and digital banking push, City Bank is
working on keeping ahead of the competition. Underpinning
these initiatives is a strong banking foundation and extensive
industry expertise, which positions us effectively in an everchanging market environment. Furthermore, as a customerfirst Bank, we are focused on revolving our operations around
customer benefit.
•
Rivalry in the marketplace:
According to Bangladesh Bank statistics, Bangladesh has 61
scheduled banks, which include State-Owned Commercial
Banks, Specialized Banks, Private Commercial Banks, Islami
Shariah-based PCBs, and Foreign Commercial Banks.
Furthermore, the majority of their presence is concentrated
in urban metropolitan areas, increasing rivalry intensity even
further.
CBL’s response
City Bank meets customer requirements in a comprehensive
manner. For example, the Bank provides the most competitive
loan rates, attractive deposit rates, a wide range of financial
products and solutions, expansive number of customer
touchpoints such as branches, ATMs, CDMs, sub-branches,
etc., safe and secure digital banking services, empathetic, swift
and attentive customer care, and quick grievance resolution
procedures. These are substantial barriers to new competition
entering into the market.
•
Supplier dominance:
Banks generally buy and sell money and hence capital is a
bank’s most important input. In a competitive market, supplier
power is unavoidable. Capital will always flow to channels
114
Annual Report 2022
offering high interest rates, and banks which can match this
requirement will be able to pull liquidity.
CBL’s response
At City Bank, we understand that as a public-facing business,
we must meet the expectations of our depositors who entrust
their savings and investment needs to us. We are devoted to
offering secure deposit interest rates with full safety of capital,
and our ability to obtain low-cost money from the market is
aided by our sound credit rating. We also provide a wide range
of term deposit products with varying tenure and interest
rates to meet our depositors’ diversified financial needs and
expectations.
•
Buyer Influence:
Our loans and advance customers are referred to as “buyers.”
While it is true that a highly competitive environment has
created a race for credit disbursal, it is also important to
ensure through credit screening in order to prevent future
defaults that erode the quality of the loan book.
CBL’s response
The service we deliver and our focus on customer journeys
is one of our significant differentiators in this aspect. While
it is easy to reproduce a product, it is difficult to replicate
service, which is one of our key competitive advantages. We
provide fast loan TAT (turnaround time) to eligible customers,
significantly supporting them in meeting any exigent
demands. Furthermore, our ability to hyper-localise products
also represents a significant driver in meeting our customer
service excellence standards.
Can FinTech replace traditional banks?
This is not a risk or a threat as the root of online banking (which
is the key service proposition of FinTech) is traditional banking.
Furthermore, traditional banks have highly established and
deeply embedded business models that have been in existence
for decades which cannot be replicated by digital disruptors.
Yes, environment can be there where both traditional banks
and FinTech can co-exist to serve and expand the market,
thus benefiting both of them. Furthermore, AI cannot replace
human intelligence and though tedious and repetitive tasks
can be automated, essential functions such as credit sourcing,
screening and underwriting cannot be replaced fully by AI but
can certainly help support and improve these functions.
Context of Operations
PESTEL
ANALYSIS
P – Political
Macros and economic trends
•
Stable political environment
with a pro-industry government
focused on Bangladesh’s economic
transformation
•
Citizen and industry-friendly
regulations, most evident in the
number and nature of COVID
stimulus packages
•
•
Impact on industry
•
•
Government emerging successful in
garnering support package from the
IMF of total value of US$ 4.7 billion
Higher regulatory costs and
disclosure requirements with
regulators tightening money
laundering and illegal cash transfers
within the economy
Industry bolstering scrutiny and
examination of economic and social
factors before venturing into a
market or launching a product
Economic situation of Bangladesh
is in a much better position visà-vis neighbourhood countries of
Pakistan and Sri Lanka
Impact on City Bank
•
Continual assessment of the
political environment by the Board
and the Management
•
Robust processes for the mitigation
of political risk, like extended due
diligence, etc.
•
Greater focus on SMEs over
corporates to avoid bigger NPL
shock
•
Strong focus on customer
segmentation for unravelling
specific opportunity borne by each
•
Strong operational reporting
guideline as per IMF requirements,
especially in the wake of recent
events of bank-runs witnessed in
the US and Europe
E – Economic
Macros and economic trends
•
•
GDP growth in Bangladesh has
shown a continuous upward trend,
except for the pandemic years that
saw economic growth decline on
account of the natural fallouts of
the pandemic
Still, Bangladesh government has
set a target of 7.5% GDP growth
for FY2022, which is amongst the
fastest growth rates anywhere in
the world
Impact on industry
•
The banking sector had a mixed
year 2022 with a share of both
opportunities and challenges
•
Bangladesh Bank continued to
raise policy rates in a bid to control
inflation that made timely ratesetting paramount importance
•
The sector continued to witness
high non-performing loans due to
legacy credit, among other factors
•
Digital banking has also caught
on in Bangladesh with customers
becoming more habituated with the
digital ecosystem
Impact on City Bank
•
City Bank remained agile in
opportunity capture, both on the
deposit mobilization and loans and
advances front
•
Strong ALCO management is a
hallmark of the Bank
•
Whilst the Bank remained
conservative, it also remained
responsive to opportunities that
helped in significant advancement
of the loan book
•
The Bank was able to reduce its
NPLs by a significant 100 bps even
in a challenging credit and industry
environment
Annual Report 2022
115
S – Social
Macros and economic trends
•
•
Bangladesh’s GDP per capita stood
at US$ at 2,793 in FY2022; however
this is skewed from the ultra-rich
to the ultra-poor, with a large
population percentage subsisting at
near about the poverty line. Thus,
income inequality is stark in the
country
Changing social landscape, as
seen elsewhere in the world, has
impacted Bangladesh’s society too,
with advent of digital technology
and social media presenting both
challenges and opportunities
Impact on industry
•
Bangladesh is a conservative
society and all decisions in this
realm are taken with this in mind
•
The explosion of social media has
enabled swift and measurable
engagement with target audience,
thus creating greater sales traction
•
•
Social media and digital technology
have also contributed to the
average customer becoming more
informed and aware
Impact on City Bank
•
City Bank, through its longstanding
experience in the business, has
honed its fine capability to introduce
products that are relevant and find
resonance with target customers
•
The Bank has a growing social
media footprint and it publishes
relevant and timely information that
is useful to its social media users
•
Considering the conservative nature
of the society, the Bank has strongly
refocused on Islamic banking and
it intends to grow its presence
meaningfully in this important
banking sphere in Bangladesh
A negative fallout of social media
is immediate access to news and
information and any negative press
can have reputation and credibility
ramifications
T – Technological
Macros and economic trends
•
Technological advancement has
induced customer awareness and
sophistication
•
Further, habituated use of
technology has also opened up new
opportunity vistas for businesses
116
Annual Report 2022
Impact on industry
•
Growing reliance on technology
may signal continued and higher
quantum of investment in
technology
•
Risks exist in technology
obsolescence too
Impact on City Bank
•
City Bank has heavily invested in
technology over time and this is
coming to bear, as the Bank has
created a strong tech and digital
foundation
•
The Bank is aware of obsolescence
risks and hence engages in
thorough examination of technology
before incorporation, preferring
scalable and updatable technology
•
The Bank has been able to create a
strong impression in digital banking
and has the vision to emerge as the
digital Bank of choice in Bangladesh
at the mass-level
Context of Operations
E – Environmental
Macros and economic trends
Impact on industry
Impact on City Bank
•
Sustainable and green finance is
becoming much more mainstream
today in recognition of the need for
climate action and energy transition
towards modern and renewable
sources
•
Environmental concerns have
led to increased regulatory focus
on a green and sustainable
economy comprising sustainable
industrialisation and greening of the
transportation and energy sectors
•
City Bank has stamped its presence
in green and sustainable finance
with an overall green asset size
of Tk.7,028 mn in 2022 that
constituted 19% of the Bank’s total
loans and advances
•
Bangladesh is a signatory to
the Paris agreement and has
developed its own NDCs (Nationally
Determined Contributions) for
three sectors - power, industry
and transportation with proposed
12 million tons (5%) unconditional
reduction in GHG emission from
Business as Usual (BAU) scenario by
2030, and a further 24 million tons
(10%) conditional reduction in GHG
emission with support from the
international community, taking the
base year 2011
•
Banks are emerging as vital
partners in this endeavour as they
are helping channel funds for the
greening of the economy
•
The Bank has also built strong
expertise in providing solutions to
customers looking at transitioning
their conventional operations to green
and environment-friendly approaches
•
The Bank has embedded ESG
and other parameters into its
credit screening and underwriting
processes, thus creating a financial
impact that has positive outcomes
on the broader economy
•
The Bank also strongly promotes
a green workplace in which
employees are required to
judiciously use resources
L – Legal
Macros and economic trends
•
Banking is a highly regulated sector
in Bangladesh with the commercial
license of banks contingent upon
conformance to compliance and
regulations
Impact on industry
Impact on City Bank
•
Banks have a strong regulatory
reporting focus, with the central
bank and other regulators requiring
information on a bank’s operations
as per predefined parameters
•
City Bank has a strong regulatory
reporting practice with ongoing
dialogue with regulators and timely
submission of all information
needed
•
There are strong regulations
to deter and avert any money
laundering or terrorist financing,
and banks are mandatorily required
to bring to the attention of the
regulators any unusual instance
of the bank being used for the
perpetration of any financial crime
•
The Bank adheres to its values and
principles as a self-regulatory and
morally and ethically responsible
financial institution committed to
the best interests of the country
•
The Bank has a strong legal wing
that helps in the interpretation of
laws and regulations, thus ensuring
greater operational regulatory
alignment
Annual Report 2022
117
SWOT ANALYSIS
Reinforcing our strengths
•
Strong brand recall through longstanding legacy, with solid
track record in financial inclusion, product range, branch/
ATM network, product innovation and digital banking
•
Membership of UN-convened Net-Zero Banking Alliance
•
Strong digital-savvy customer base
•
Non-compromising stance on corruption, fraud and
regulatory non-compliance
•
Extensive presence across Bangladesh with several and
varied customer touch-points
•
Competent and specialist manpower resources
•
Strong financial position and capital ratios
STRENGTHS
Harnessing our opportunities
•
Strong digital banking focus for enabling scale to reach
the unbanked/underbanked populations
•
Strong customer segmentation helping unfold significant
headroom for growth in digital nano lending, women
banking, employee banking, Islamic banking, etc.
•
Accelerated digital product and services adoption with
maturing ecosystem
•
Strong growth potential in energy transition for industry,
which spells opportunity for green and sustainable finance
•
Specialist and loyal employee base that helps meet the
Bank’s credit and profitability goals and targets
118
Annual Report 2022
OPPORTUNITIES
Context of Operations
Mitigating our weaknesses
•
Non-homogenous and dispersed customer base,
making servicing difficult and cost-prone
•
Unanticipated changes in banking rules and regulations
•
Income concentration on single region (Bangladesh)
•
Relatively fixed interest rates, triggering reduced
spreads and higher risk
WEAKNESSES
Reducing impact of our threats
THREATS
•
Decline in individual financial capacity due to inflation,
thus leading to slower savings/investment growth and
depleted confidence
•
Lack of awareness and willingness to adopt digital
services at mass-level
•
Competitive distortion through untenable practices
•
Intense competition in corporate banking driving focus
on retail consumer and MSME financing, thus crowding
these spaces too
•
Slow external global trade and sharp devaluation in
BDT vs. US$ inducing potential loss of opportunity and
loss arising from foreign exchange liabilities
Annual Report 2022
119
HISTORICAL PERFORMANCE
Five-Year’s Performance of the Bank at a Glance
Figures in Million Unless Specified
Particulars
Balance Sheet
Authorized Capital
Paid-up Capital
Reserve Fund & Surplus
Total Shareholders' Equity
Bond
Deposits
Borrowings
Loans and Advances
Credit to deposit ratio
Credit to deposit ratio (including Off Shore Banking Unit)
Investment to deposit ratio (IDR)
Debt - Equity Ratio (times)
Investments
Fixed Assets
Earning assets
Total Assets
Off-Balance Sheet Exposures
Income Statement
Net Interest Income (excluding investment income)
Investment Income
Non-interest Income
Operating Income
Operating Expenses
Operating Profit (profit before provision and tax)
Provision for Loans, Investment and Other assets
Profit Before Tax
Profit After Tax
BIS Capital Measures*
Risk Weighted Assets (RWA)
Tier I Capital
Tier II Capital
Total Regulatory Capital (Tier-I and II)
Tier I Capital Ratio
Tier II Capital Ratio
Total Capital Adequacy Ratio
RWA to Total Assets
Credit Quality
Non Performing/classified Loans (NPLs)
Percentage of NPL over Total Loans and Advances
Provision for Unclassified Loans
Provision for Classified Loans
Provision for Off-balance Sheet Exposure
Foreign Exchange Business
Export
Import
Bank guarantee
Remittance
120
Annual Report 2022
2022
BDT
2021
BDT
2020
BDT
2019
BDT
2018
BDT
15,000
12,006
20,839
32,845
16,225
331,890
82,390
354,774
15,000
10,672
20,552
31,224
11,690
282,064
54,895
286,380
15,000
10,164
18,654
28,818
11,600
254,781
58,769
268,202
15,000
10,164
15,252
25,416
9,200
246,704
44,168
246,944
15,000
9,680
14,750
24,430
8,800
205,170
60,453
231,391
83.2%
51.0%
14.4
61,105
9,749
433,969
506,847
218,248
84.7%
35.1%
12.4
54,920
6,465
350,939
416,902
228,065
77.7%
29.6%
12.3
46,251
5,920
327,906
382,926
136,338
79.4%
67.5%
13.0
39,452
5,675
292,278
354,689
118,329
82.7%
30.9%
12.3
27,882
3,519
275,954
324,780
135,748
12,359
3,605
8,624
24,588
12,761
11,827
2,943
8,884
4,508
12,048
2,579
6,776
21,403
10,403
11,001
2,546
8,455
4,743
8,363
3,438
4,936
16,737
9,697
7,040
644
6,395
4,012
10,832
2,086
5,367
18,285
9,998
8,287
2,556
5,731
2,472
9,201
1,842
4,859
15,902
9,223
6,679
2,324
4,355
2,018
360,906
34,708
17,492
52,200
9.6%
4.8%
14.5%
71.2%
305,194
32,445
10,769
43,213
10.6%
3.5%
14.2%
73.2%
269,322
29,017
12,800
41,817
10.8%
4.8%
15.5%
70.3%
244,925
23,664
13,471
37,136
9.7%
5.5%
15.2%
69.1%
259,413
21,507
13,304
34,811
8.3%
5.1%
13.4%
79.9%
13,671
3.9%
6,911
5,451
1,952
13,906
4.9%
4,973
5,602
1,952
10,850
4.0%
5,159
3,933
1,202
14,244
5.8%
4,240
5,830
1,032
12,326
5.3%
3,486
4,488
991
272,920
467,213
32,391
129,702
186,029
326,480
32,353
69,910
119,987
180,817
9,307
51,579
130,241
197,590
20,459
57,148
117,520
172,937
8,286
48,525
Particulars
2022
BDT
2021
BDT
2020
BDT
2019
BDT
2018
BDT
Efficiency/Productivity Ratio
Return on Average Equity (ROE)
14.1%
15.8%
14.8%
9.9%
8.2%
Return on Average Assets (ROA)
1.0%
1.2%
1.1%
0.7%
0.7%
Cost to Income Ratio
51.9%
48.6%
57.9%
54.7%
58.0%
Yield on Advance based on average EOD balance
7.5%
7.1%
8.4%
10.3%
9.7%
Cost of Deposit based on average EOD balance
3.2%
2.6%
4.7%
5.4%
5.6%
Net Interest Margin Ratio
4.3%
4.5%
3.7%
5.0%
4.1%
Statutory Liquidity Ratio (SLR)-at the close of the year
Required reserve
14,587.4
11,885.8
11,790.3
14,517.3
11,243.2
Actual reserve maintained
21,897.4
18,293.0
14,558.8
17,749.9
14,119.6
Surplus
7,310.0
6,407.2
2,768.4
3,232.7
2,876.5
Cash Reserve Ratio (CRR)-at the close of the year
Required reserve
47,069.3
38,205.2
38,741.4
33,741.3
28,925.0
Actual reserve maintained
69,148.1
62,441.9
51,333.4
45,463.6
32,526.9
Surplus
22,078.8
24,236.8
12,591.9
11,722.3
3,601.8
Current Ratio (Times)
0.9
0.9
0.9
0.8
0.9
Operating Profit per Employee
2.4
2.4
1.6
1.8
1.7
Operating Profit per Branch
88.9
83.3
53.3
62.8
51.0
Share Information
No of Shares Outstanding (in million)
1,200.6
1,067.2
1,016.4
1,016.4
968.0
Operating Profit per Share (BDT)
9.9
10.3
6.9
8.2
6.9
Earnings Per Share (BDT)
3.8
4.4
3.9
2.4
2.1
Market price per share (BDT) as on close of the year (DSE)
21.8
27.3
24.8
21.1
30.2
Price Earning Ratio (Times)
5.8
6.1
6.3
8.7
14.5
Net Assets Value Per Share (BDT)
27.4
29.3
28.4
25.0
25.2
Dividend Cover Ratio (EPS/DPS)
312.9%
177.8%
175.4%
162.1%
189.5%
Total Dividend**
12.0%
25.0%
22.5%
15.0%
11.0%
Cash Dividend
10.0%
12.5%
17.5%
15.0%
6.0%
Stock Dividend
2.0%
12.5%
5.0%
0.0%
5.0%
Distribution Network
Number of Branches
122
121
121
121
119
Number of SME Center & Agri Branches
11
11
11
11
12
Number of Sub-Branches
12
11
Number of SME-S Units
116
116
116
103
20
Number of Agent Outlets
690
1,183
1,411
331
154
Number of Priority Center
7
7
7
7
7
Number of ATMs
351
338
311
343
338
Number of Employees
4,866
4,539
4,356
4,493
3,858
Number of Foreign Correspondents
486
479
469
466
491
Number of CDMs
64
64
64
63
30
* BIS: Bank for International Settlements
** The Board of Directors in its 633rd meeting decided to recommend distribution of 10.0% ( Ten percent) cash dividend and 2.0%
( Two percent) stock dividend subject to shareholders' approval.
Annual Report 2022
121
Context of Operations
Figures in Million Unless Specified
HORIZONTAL ANALYSIS
Balance Sheet as on December 31 (For last five years)
Particulars
2022
BDT 'mn
Property and Assets
Cash in hand Balance with
Bangladesh Bank and its
agent bank (s)
32,023
Balance with other banks
and financial institutions
32,725
Money at call and short notice
Investments
61,105
Loans and advances/
investments
354,774
Fixed assets including
premises, furniture and
fixtures
9,749
Other assets
15,808
Non-banking assets
663
Total assets
506,847
2021
∆%
BDT 'mn
2020
∆%
BDT 'mn
2019
∆%
BDT 'mn
2018
∆%
BDT 'mn
∆%
64.8%
30,224
55.5%
22,404
15.3%
25,907
33.3%
19,435
100.0%
20.1%
(100.0%)
119.2%
22,794
54,920
(16.4%)
(100.0%)
97.0%
27,023
46,251
(0.8%)
(100.0%)
65.9%
23,126
39,452
(15.1%)
(100.0%)
41.5%
27,253
89
27,882
100.0%
100.0%
100.0%
53.3% 286,380
23.8% 268,202
15.9% 246,944
6.7% 231,391
100.0%
177.0%
6,465
11.5% 15,335
(35.9%)
784
56.1% 416,902
83.7%
5,920
8.2% 12,043
(24.2%)
1,082
28.4% 382,926
68.2%
5,675
(15.0%) 12,434
4.7%
1,152
17.9% 354,689
61.3%
3,519
(12.3%) 14,176
11.5%
1,034
9.2% 324,780
100.0%
100.0%
100.0%
100.0%
Liabilities and Equity
Liabilities
Bonds
Borrowings from other
banks, financial institutions
and agents
Deposits and other accounts
Other liabilities
Total liabilities
16,225
82,390
331,890
43,496
474,002
Capital/shareholders' equity
Paid up capital
12,006
Statutory reserve
10,502
Share premium
1,504
Dividend equalization reserve
531
Other reserve
1,014
Surplus in profit and loss
account
7,288
Total shareholders' equity
32,845
Total liabilities and
shareholders' equity
506,847
Total off-balance sheet items 218,248
122
Annual Report 2022
84.4%
11,690
36.3% 54,895
61.8% 282,064
67.8% 37,029
57.8% 385,678
32.8%
11,600
31.8%
9,200
4.5%
8,800
100.0%
(9.2%) 58,769
37.5% 254,781
42.8% 28,957
28.4% 354,107
(2.8%) 44,168
24.2% 246,704
11.7% 29,201
17.9% 329,273
(26.9%) 60,453
20.2% 205,170
12.6% 25,927
9.6% 300,350
100.0%
100.0%
100.0%
100.0%
24.0%
31.2%
0.0%
(0.0%)
(44.6%)
10,672
9,168
1,504
531
1,663
10.2%
14.6%
0.0%
(0.0%)
(9.2%)
10,164
8,659
1,504
531
1,861
5.0%
8.2%
0.0%
(0.0%)
1.6%
10,164
8,659
1,504
531
931
5.0%
8.2%
0.0%
0.0%
(49.1%)
9,680
8,002
1,504
531
1,830
100.0%
100.0%
100.0%
100.0%
100.0%
152.8%
34.4%
7,687
31,224
166.6%
27.8%
6,099
28,818
111.6%
18.0%
3,626
25,416
25.8%
4.0%
2,883
24,430
100.0%
100.0%
56.1% 416,902
28.4% 382,926
17.9% 354,689
9.2% 324,780
100.0%
60.8% 228,065
68.0% 136,338
0.4% 118,329
(12.8%) 135,748
100.0%
Context of Operations
HORIZONTAL ANALYSIS
Profit and Loss Account (For last five years)
Particulars
Interest income/profit on
investments
Interest paid/profit
shared on deposits and
borrowings etc.
Net interest income/
profit on investments
Non-interest income
Total operating income
Total operating expense
Profit before provision
Provision for loans and
advances/investments
Provision for off-balance
sheet exposures
Provision for others
Total provision
Total profit before taxes
Total Provision for taxation
Net profit after tax
2022
BDT 'mn
2021
∆%
BDT 'mn
2020
∆%
BDT 'mn
2019
∆%
BDT 'mn
2018
∆%
BDT 'mn
∆%
25,557
11.5%
20,725
(9.6%)
23,134
0.9%
26,819
17.0%
22,917
100.0%
13,198
(3.8%)
8,678
(36.7%)
14,771
7.7%
15,987
16.6%
13,716
100.0%
12,359
12,229
24,588
12,761
11,827
34.3%
81.1%
54.1%
37.6%
77.1%
12,048
9,355
21,403
10,403
11,001
30.9%
38.5%
34.2%
12.2%
64.7%
8,363
8,374
16,737
9,697
7,040
(9.1%)
24.0%
4.9%
4.6%
5.4%
10,832
7,453
18,285
9,998
8,287
17.7%
10.4%
14.6%
7.8%
24.1%
9,201
6,753
15,954
9,274
6,679
100.0%
100.0%
100.0%
100.0%
100.0%
2,943
59.8%
1,796
(2.5%)
384
(79.1%)
2,585
40.4%
1,841
100.0%
- (100.0%)
0 (100.0%)
2,943
26.6%
8,884 104.0%
750 351.6%
- (100.0%)
2,546
9.5%
8,455
94.1%
170
89
644
6,395
2.7%
(71.8%)
(72.3%)
46.9%
41 (75.1%)
(71) (122.3%)
2,556
10.0%
5,731
31.6%
166
317
2,324
4,355
100.0%
100.0%
100.0%
100.0%
4,377
4,508
3,712
4,743
2,383
4,012
2.0%
98.8%
3,260
2,472
2,337
2,018
100.0%
100.0%
87.3%
123.4%
58.8%
135.0%
39.5%
22.5%
Annual Report 2022
123
VERTICAL ANALYSIS
Balance Sheet as on December 31 (For last five years)
Particulars
2022
BDT 'mn
2021
Mix (%)
BDT 'mn
2020
Mix (%)
BDT 'mn
2019
Mix (%)
BDT 'mn
2018
Mix (%)
BDT 'mn
Mix (%)
Property and Assets
Cash in hand Balance with
Bangladesh Bank and its
agent bank (s)
32,023
6.3%
30,224
7.2%
22,404
5.9%
25,907
7.3%
19,435
6.0%
Money at call and short notice
32,725
-
6.5%
0.0%
22,794
-
5.5%
0.0%
27,023
-
7.1%
0.0%
23,126
-
6.5%
0.0%
27,253
89
8.4%
0.0%
Investments
61,105
12.1%
54,920
13.2%
46,251
12.1%
39,452
11.1%
27,882
8.6%
69.6% 231,391
71.2%
Balance with other banks
and financial institutions
Loans and advances/
investments
Fixed assets including
premises, furniture and
fixtures
Other assets
Non-banking assets
Total assets
354,774
70.0% 286,380
68.7% 268,202
70.0% 246,944
9,749
1.9%
6,465
1.6%
5,920
1.5%
5,675
1.6%
3,519
1.1%
15,808
3.1%
15,335
3.7%
12,043
3.1%
12,434
3.5%
14,176
4.4%
0.1%
784
0.2%
1,082
0.3%
1,152
0.3%
1,034
0.3%
100.0% 324,780
100.0%
663
506,847
100.0% 416,902
100.0% 382,926
100.0% 354,689
Liabilities and Equity
Liabilities
Bonds
16,225
3.2%
11,690
2.8%
11,600
3.0%
9,200
2.6%
8,800
2.7%
Borrowings from other
banks, financial institutions
and agents
82,390
16.3%
54,895
13.2%
58,769
15.3%
44,168
12.5%
60,453
18.6%
Deposits and other accounts
331,890
69.6% 205,170
63.2%
Other liabilities
Total liabilities
43,496
474,002
65.5% 282,064
8.6%
37,029
93.5% 385,678
67.7% 254,781
8.9%
28,957
92.5% 354,107
66.5% 246,704
7.6%
29,201
92.5% 329,273
8.2%
25,927
8.0%
92.8% 300,350
92.5%
Capital/shareholders' equity
Paid up capital
12,006
2.4%
10,672
2.6%
10,164
2.7%
10,164
2.9%
9,680
3.0%
Statutory reserve
10,502
2.1%
9,168
2.2%
8,659
2.3%
8,659
2.4%
8,002
2.5%
1,504
0.3%
1,504
0.4%
1,504
0.4%
1,504
0.4%
1,504
0.5%
531
0.1%
531
0.1%
531
0.1%
531
0.1%
531
0.2%
1,014
0.2%
1,663
0.4%
1,861
0.5%
931
0.3%
1,830
0.6%
Share premium
Dividend equalization reserve
Other reserve
Surplus in profit and loss
account
Total shareholders' equity
Total liabilities and
shareholders' equity
7,288
1.4%
7,687
1.8%
6,099
1.6%
3,626
1.0%
2,883
0.9%
32,845
6.5%
31,224
7.5%
28,818
7.5%
25,416
7.2%
24,430
7.5%
506,847
100.0% 416,902
100.0% 382,926
100.0% 354,689
100.0% 324,780
100.0%
Total off-balance sheet items 218,248
43.1% 228,065
54.7% 136,338
35.6% 118,329
33.4% 135,748
41.8%
124
Annual Report 2022
Context of Operations
VERTICAL ANALYSIS
Profit and Loss Account (For last five years)
Particulars
Interest income/profit on
investments
Interest paid/profit shared on
deposits and borrowings etc.
Net interest income/profit
on investments
Non-interest income
Total operating income
Total operating expense
Profit before provision
Provision for loans and
advances/investments
Provision for off-balance
sheet exposures
Provision for others
Total provision
Total profit before taxes
Total Provision for taxation
Net profit after tax
2022
BDT 'mn
2021
Mix (%)
BDT 'mn
2020
Mix (%)
BDT 'mn
2019
Mix (%)
BDT 'mn
2018
Mix (%)
BDT 'mn
Mix (%)
25,557
67.6%
20,725
68.9%
23,134
73.4%
26,819
78.3%
22,917
77.2%
13,198
34.9%
8,678
28.8%
14,771
46.9%
15,987
46.6%
13,716
46.2%
12,359
12,229
24,588
12,761
11,827
32.7%
32.4%
65.1%
33.8%
31.3%
12,048
9,355
21,403
10,403
11,001
40.1%
31.1%
71.2%
34.6%
36.6%
8,363
8,374
16,737
9,697
7,040
26.5%
26.6%
53.1%
30.8%
22.3%
10,832
7,453
18,285
9,998
8,287
31.6%
21.7%
53.4%
29.2%
24.2%
9,201
6,753
15,954
9,274
6,679
31.0%
22.8%
53.8%
31.3%
22.5%
2,943
7.8%
1,796
6.0%
384
1.2%
2,585
7.5%
1,841
6.2%
0
2,943
8,884
4,377
4,508
0.0%
0.0%
7.8%
23.5%
11.6%
11.9%
750
2,546
8,455
3,712
4,743
2.5%
0.0%
8.5%
28.1%
12.3%
15.8%
170
89
644
6,395
2,383
4,012
0.5%
0.3%
2.0%
20.3%
7.6%
12.7%
41
(71)
2,556
5,731
3,260
2,472
0.1%
(0.2%)
7.5%
16.7%
9.5%
7.2%
166
317
2,324
4,355
2,337
2,018
0.6%
1.1%
7.8%
14.7%
7.9%
6.8%
Annual Report 2022
125
Our foundations
126
Annual Report 2022
Our Foundations
WHOLESALE BANKING
Offering complete banking solutions to institutional clients comprising large corporates, mid-size
businesses and other institutional clients from the public and private sector!
Strategic intent
Offer the full product
suite for meeting
specialised and
complex financing
requirements
Meet high client
expectation and
service delivery
standards
Formulate the right
structured deals
to serve highly
customised product
requirements
Overview
Garner strategic
finance for clients that
have a direct impact on
the economy
Provide balance sheet
support to large
groups to meet their
long-term funding
requirements, bank
guarantees, etc.
of choice to clients contributing to core sector growth in
City Wholesale Banking is a top financial solutions center of
Bangladesh, providing integrated banking solutions to leading
local and multinational corporates and conglomerates. Over
the past few years, City WB has become a banker to almost
all the well-known industrial houses of the nation. The
division engages with clients through a variety of banking
requirements, including corporate banking facilities, cash
management and other structured solutions.
Aligned with the Bank’s vision as a financial solutions partner
myriad ways, our key value proposition consists of a strong
local presence, a diversified solutions basket with focus on
meeting client needs through innovative financing, and a
specialist team with a client-first culture.
In addition to supporting a large private sector clientele,
WB also works with government agencies as a liaison for
channelising public funds for societal welfare, such as directing
government aid to poor and backward communities as an
inflation shield, etc.
City Wholesale Banking comprises the following verticals created for proactive customer fulfilment in specific product lines. These
include:
Corporate Banking
Division (CBD)
Structured Finance
(SF)
Financial Institutions
(FI)
Cash Management
and Custodial
Cluster (CMCC)
Corporate
Strategic Business
Management
(CSBM)
Annual Report 2022
127
Operational update
Through Wholesale Banking, City Bank is an active player
in banking arrangement, participation and underwriting of
syndicated loan transactions, arranging credit facilities/financial
packages, etc. In fast changing financial markets, WB continuously
looks to introduce and adopt new products for lending and
investment so as to offer the best solutions to our clients.
Efficiency and agility are important parameters of the
business. These are central in not just meeting the demanding
and complex requirements of our clients, but for our own
sustainability as well as contribution to the Bank as a whole.
This is best reflected in the fact that with a near-level team
size in 2022, the division achieved YoY growth in all the major
financial parameters, including total assets (23.7%), total
liabilities (4.1%) and total trade (27.6%).
Financial update
Metric
2022
2021
2020
Total asset book (BDT mn)
171,221
138,348
145,180
Total liabilities (BDT mn)
65,816
63,189
53,531
Total trade (BDT mn)
512,920
401,960
276,569
92
91
92
Team size
Key trends
•
Growing client expectations around deal efficiency amid
rising interest rates
•
Greater thrust on mega infrastructure development
entailing larger flow of institutional/developmental
funds
•
Growing cross-border transactional complexity requiring
greater sophistication in structuring financial deals
•
Government welfare funds channelisation requiring
banking intermediaries to have strong distribution and
local presence
•
Strong growth witnessed in customer deposits in the
banking sector aided by savings trends, surplus funds
availability due to cut back in investment capex, growth in
remittance, and higher export earnings
•
Foreign loans inflow rose throughout the year which
further ballooned the deposit base of the banking sector,
thus pushing down deposit interest rates
•
Relatively muted growth in credit activities was witnessed
due to general business sluggishness
Corporate Banking
Corporate Banking Division is a force for good in Bangladesh’s
power sector, financing 3,000 MW or 13.50% of the national
power sector capacity. Power is a critical input for Bangladesh’s
industry to thrive and is a key component of economic growth.
Our specialised interventions such as innovative financing
instruments including ECA (Export Credit Agency), SBLC/ Bank
Guarantee backed funding, refinancing, and LCs from OBU in
contributing to the national power sector is a matter of great
pride while we focus on cost and efficiency as two critical drivers
in ensuring a low-cost high-quality power sector asset base. In
fact, our established presence in this core sector of the economy
is evident in our power sector financing portfolio comprising
12.75% of the Bank’s consolidated asset portfolio.
A milestone achievement of City Corporate in powering the nation!
The Corporate Banking division successfully accomplished the opening of a USD 588 mn LC for ensuring continuous
support to the national power sector, even amid the currency crisis of 2022!
Our steadfast commitment to the sustainable development of
ensure uninterrupted power supply by opening a USD 588 mn
the power sector is reflected in that even amid the global foreign
(BDT 54,420 m) LC for fuel and machinery, a milestone achieved
currency crisis of 2022; we expanded support to the industry to
by a single bank in the national power sector.
128
Annual Report 2022
•
Multi-currency fund-raising to assist clients from diverse
sectors, such as a private sector major dredging solutions
provider, a 116 MW power plant entity, and a leading
microfinance institution
•
Garnering foreign currency funds from overseas institutions
for the OBU (Offshore Banking Unit) of the Bank
We are energised by our mission that not only takes
Bangladesh’s interests into account but also supports global
endeavours in climate action. Thus, Corporate Banking will
continue on a mission-mode to expand environmentallyresponsible electricity generation and fulfill its pledge in
carbon neutrality.
A leading dredging company
Financial services partner of the government
Bangladesh’s government has been proactive and sensitive in
supporting the economy through the pandemic and inflation
crises. This has helped buffet the country from major global
headwinds and ensured a stable profile.
Many stimulus programs were announced by the government
and Bangladesh Bank to assist industries hit by COVID-19.
First among those was a salary loan to workers in the hard-hit
export-oriented companies.
Even amidst the height of the lockdown in 2020, the
division was among the first to respond, and was swiftly
granted official authority. Consequently, in conjunction with
Bangladesh Bank and several MFS (mobile financial services)
firms, the group channelled salary income of over BDT 3,600
mn to 41 companies employing a large workforce. This sum
was disbursed to the online wallet of over 3 lakh direct workers
(both females and males) of EOUs from April-July 2020 as
salary. The division further disbursed BDT 8,750 mn to 78
customers under the first phase in 2020 and BDT 4,090 mn
to 52 customers under the second phase in 2021. In 2022, the
Board approved BDT 4,200 mn under the third phase, which is
under disbursement.
Structured Finance
Over 2022, City’s Structured Finance continued to build on its
position as a preeminent financial services provider, meeting
complex customer needs that transcended conventional
financing.
This was evident in some of the major transactions effected
during the year, the short descriptions of which are given below.
Reportable highlights, 2022
SFD completed the disbursement of the ECA-backed facility of
EUR 28.63 mn for a major private dredging company, enabling
it to procure 14 dredgers. This not only signified a major
transaction for SFD, but also highlighted the potential for City
Bank’s future contribution to the Bangladesh Delta Plan 2100.
A leading MFI
SFD completed the arrangement-disbursement of EUR 6.5
mn credit line for a leading MFI (microfinance institution)
of Bangladesh to help bolster its developmental credit
portfolio, which would contribute to the major goals of
financial inclusion, women empowerment and agricultural
production. This transaction showcased City SFD’s global
reach and unique ability to structure solutions that meet
diverse clientele needs.
A major power plant
The group also arranged a syndicated BDT facility of BDT
2,640 mn for 116 MW HFO-fired power plant in Chattogram.
The transaction has enhanced City Bank’s contribution to the
power sector for a cumulative generation capacity of 4.50 GW.
OBU credit line support
City SFD successfully negotiated a fresh credit line aggregating
to USD 45 mn from two globally recognised DFIs- Norfund
and DEG. This credit support has helped shield the long-term
funding capabilities of the OBU even amid the prevailing
times of rising interest rates and systemic liquidity pressures.
The group also kick-started dialogue with other multilateral
development banks such as the Asian Infrastructure
Investment Bank (AIIB) and FMO, thus helping expand ties
with prominent global development finance institutions.
Agency-based services
During 2022, with a portfolio under administration of over
USD 535 mn, City SFD continued to provide agency-based
services i.e. holding safe custody of securities and ensuring
Annual Report 2022
129
Our Foundations
As a means to contribute to the climate goals of the nation
and gain a foothold in the future of the power sector, the group
also supports renewable energy-based power (solar, wind
turbine and biomass). City Bank is a member of the global
Net-Zero Banking Alliance that seeks commitment from its
membership to align their lending and investment portfolios
to net-zero emissions by 2050. Notably, the group does not
finance any coal-based power projects.
timely repayments, thereby upholding trust of concerned
stakeholders, including customers as well as both local and
foreign lenders.
Financial Institutions (FI)
City Bank’s Financial Institutions (FI) division runs a robust
worldwide network consisting of 33 global transaction
accounts and 486 SWIFT linkages. FI also has trade credit
lines with key international and regional banks and remains
obligated to effect scheduled payments for trade transactions
to its correspondent bank network.
FI leverages its global network to obtain confirmation and
funding for international transactions, as well as structure
large, complex multi-country transactions. Throughout 2022,
FI utilised trade financing lines totaling USD 2.3 billion.
Reportable highlights, 2022
Strengthening relationship with IsDB
City Bank renewed its Islamic trade finance facility with
International Islamic Trade Finance Corporation (ITFC, an IsDB
member). With this renewal, the Bank now enjoys the highest
limit provided by ITFC for FI purposes within its member
countries. Alongside ITFC, the Bank also avails facilities from
Islamic Corporation for the Development of the Private Sector
(ICD) and Insurance of Investment and Export Credit (ICIEC),
both wings of Islamic Development Bank.
Syndicated funding arrangement
FI successfully closed two syndicated loans of USD 45 mn
and USD 40 mn, arranged by Bank Muscat, a leading financial
services provider in the Sultanate of Oman. The transactions
received strong participation from reputed international banks
from Europe, the Middle East and Africa. This is the third and
fourth successful syndicated loan facility arranged by Bank
Muscat for City Bank, which is one of the top banks in the trade
sector of the country, thus utilising the credit line to finance
its trade transactions. City Bank availed the first syndicated
loan of EUR 20 mn from Bank Muscat in 2019, which was the
first such loan by a Bangladeshi bank that was arranged by an
Omani bank. In 2020, City Bank followed up its initial loan with
a USD 30 mn syndicated loan.
130
Annual Report 2022
Prestigious affirmation
City Bank has won the distinguished “Leading Partner Bank
in Bangladesh” award under Asian Development Bank’s trade
finance program for the third consecutive year in 2022. This
award is proof of City Bank’s endeavour to provide the best
trade solutions to its clients.
Non-Resident Business (NRB)
Coinciding with a post-pandemic recovery environment, City
NRB had a strong year in 2022, recording the largest ever
remittance of USD 864 mn in its history.
As a means to remain with the times, the NBR department
directed to develop drawing arrangements with FinTechbased transactions and with constructive relationships
effectively coordinated with conventional remittance service
providers (RSP) to use FinTech in their Remittance Operations,
allowing remitters to use RSP ‘s mobile app/web for outward
remittances. This adoption along with the development
of the internal capacity of City NRB to handle thousands of
transactions smoothly in a single day and ensuring immediate
credit to the Beneficiary’s Accounts were key to the historic
remittance volume accomplished by the NRB department
during this year.
In another highlight, technology was upgraded for
non-resident City Bank clients to open Wage Earners
Development Bonds directly with NRB. The group also
worked on pushing the re-designed City Islamic Account
to Non-Resident Bangladeshis in an effort to expand the
Bank’s account base.
NRB is also coordinating with the CBL Cash Management team
to attract Non-Resident Bangladeshis to create NITA accounts
(Non-Resident Investor’s Taka Account). This custodial service
will facilitate non-resident account holders to directly invest in
Bangladesh’s stock market from abroad, thus contributing to
enhancing the investor base.
NRB is also coordinating with the CBL-Cards team to develop
VISA Direct Remittance service for City Bank VISA cardholders
and with the CBL-SME team to promote loan products for
remittance recipients in Bangladesh. City Bank is the only
bank in Bangladesh with Bangladesh Bank’s clearance for this
product that offers loan against remittance security.
In addition to providing cash management and custodial
services, CMCC also focuses on contributing to the Bank’s
efforts in expanding the deposit base (liability side) via
corporate and institutional customer outreach. This was
especially significant in 2022 for catering to future asset
(lending) growth.
for payment service providers (PSPs), mobile financial
services (MFS) players, etc.
•
Stock Companies and Firms (RJSC) through bKash
•
•
•
Forged collaboration with Trust Axiata Digital Limited
under which City Bank will facilitate online digital
collections and payments to Trust Axiata Digital through
Reportable highlights, 2022
•
Signed agreement for fees collection of Registrar of Joint
Raised scalability and enhanced features in CityLive
through launch of direct debit facilities, online payment
functionality for customs duty, VAT payments and bulk
transfers to MFS
Shifted focus to small ticket and solutions-driven clients
for thrust on low-cost accounts
Developed and launched trust-cum-settlement accounts
(TCSAs) aligned to new Bangladesh Bank guidelines
the Bank’s digital platform
•
Launched robust custodial software (across web and
app) catering to the real-time investment needs of NRBs,
foreign individuals and foreign institutions in Bangladesh’s
capital market from abroad
•
Signed agreements with Dhaka North City Corporation
(DNCC) for Holding Tax Collection and with UPAY and
Deshipay for Trust-Cum-Settlement agreements
Way forward, 2022 and medium-term
Enable technological enhancement of CityLive for offering
wider digital experience to clients for enhancing user base
Augment centralised and dedicated service functions catering to
client specific requirements
Encourage Wholesale Banking clients towards adoption of various
other Bank services, such as VAT payments, utility bills collection, bulk
payments to MFS through City Bank digital platforms, etc.
Monitor cash management product-wise business
performance
Focus on e2e client solution for corporate clients
Annual Report 2022
131
Our Foundations
Cash Management and Custodial Cluster (CMCC)
TREASURY & MARKET RISK DIVISION
Streamlining corporate treasury through efficiency, agility and optimisation, and providing enhanced
resiliency, flexibility and effectiveness through risk mitigation!
Overview
disposal contribute to the Bank’s goals of strengthening
A dynamic geopolitical environment and tightening of financial
regulations mean managing risk and market exposure has
become increasingly complex. Uncovering new opportunities,
making informed decisions, and ensuring superior execution
are more important than ever.
Treasury & Market Risk Division of City Bank is a versatile
group with longstanding experience in treasury management.
The seasoned team with a strong market perspective, access
to global research, and a number of analytical tools at their
balance sheet, managing risk and optimizing profitability.
The group plays a multifaceted role in the Bank’s liquidity
management and risk functions through excellence in liquidity
management with strong market execution via foreign
exchange trading and workflow, optimising hedging and
risk exposure strategy, supervising long-term funding and
and optimizing cost of fund for the Bank, and developing an
independent view of counterparty or default risk for major
trading partners.
Fostering a best-in-class integrated treasury and risk mitigation practice
Optimising short-term
liquidity
Understanding and hedging
financial risk exposure
Securing cost-effective longterm funding
Managing interest rate risk,
counterparty risk, foreign
exchange risk & equity risk
City Bank’s Treasury & Market Risk Division plays a decisive role in bolstering the Bank’s balance sheet and ensuring sound assetliability management, two of the most critical functions of the Bank.
Money market activities
Foreign exchange activities
CBL's
Treasury & Market
Risk Division
Fixed income trading
Nostro fund management
Corporate bond investment
132
Annual Report 2022
•
ALM and Money Market Desk
•
Foreign Exchange Interbank and Corporate Sales Desk
ALM and Money Market Desk:
The ALM and Money Market Desk has the combined task
of steering the Bank’s balance sheet (asset liability) through
strategy formulation and daily plan execution. The group
actively participates in the interbank money market to aid
revenue growth via net interest income and investment
income management from government securities and
corporate bonds as well as opportunistic trading in the
secondary market. Thus, the desk assures organisational
stability through revenue contribution and risk containment.
While ALM Desk under the Treasury manages the balance
sheet and ensures meeting the Bank’s liquidity needs through
gaining a competitive advantage from market movement
through utilising diverse money market products, ALCO holds
the most important responsibility of the Bank as it helps
safeguard public deposits.
Thus, ALCO supports ALM processes, allowing the Bank to
establish regulatory compliance on statutory liquidity and
capital position, while also ensuring competitive pricing of
both assets and liabilities to ensure sustainable growth of the
Bank.
ALM also shares intelligence and market insights through
presenting the Bank’s overall financial picture to the ALCO
that helps formulate an effective fund management and
investment strategy for the Bank.
Business/Operational update
•
Prudent and cautious approach in managing Money Market Placement portfolio
•
Vigilant strategy adoption in mitigating yield curve hike in 2022 through re-investment in Money Market (instead of
Government Securities) with competitive interest rate and later switching to purchase of T-Bills with higher yields to
ensure overall healthy return in the treasury portfolio
•
Preemptive positioning of the deposit book of the Bank through watchful Asset-Liability Committee (ALCO) operation
•
Competent foreign currency liquidity management and execution resulting in successful customer payment and bank
borrowing obligations
Key trends in money markets
•
Upward trend in inflation observed throughout the year, with monthly average (twelve month) rising from 5.62% in January
2022 to 7.70% in December 2022. Point to point inflation in December 2022 was 8.71% rising from 5.86% in January 2022.
•
Bangladesh Bank hiked key interest rate three times in 2022. The central bank raised interest rate from 4.75% to 5.00% in May,
which was further raised by 0.50% to 5.50% in June. The last hike of 0.25% came in September to 5.75%
•
Bangladesh Bank sold USD 12.47 billion to banks, which subsequently reduced systemic liquidity of approximately BDT 1,185
billion. This contributed to rising trends observed in market interest rates and yield curve
Annual Report 2022
133
Our Foundations
Ensuring focus and streamlining decision-making and
execution, CBL’s Treasury & Market Risk Division comprises of
two desks.
•
Yield of government securities shifted sharply upward in 2022.
91-day T-Bill rate stood at 7.30% in
December 2022 (2.37% in December
2021)
•
182-day T-Bill rate stood at 7.50% in
December 2022 (3.24% in December
2021)
364-day T-Bill stood at 8.00% in
December 2022 (3.47% in December
2021)
Foreign currency liquidity shortage was observed in 2022 as a result of high import settlements, declining remittance, foreign
loan repayments, declining foreign credit lines, etc.
Foreign Exchange Interbank and Corporate Sales
Desk:
The Foreign Exchange Desk comprises the Interbank and
Corporate Sales desks. This desk was an active player in the
market throughout 2022, exploring FX business opportunities
while managing FX risks. Maintaining Net Open Position (NOP)
of the Bank in line with regulatory limits and forecasting
exchange rates are key responsibilities of the desk. The desk
remains proactive in forming suitable solutions for hedging
FX exposures through spot and forward transactions. Needbased derivative solutions, in line with central bank guidelines,
were also provided by the foreign exchange desk to customers.
Key trends in FX markets
The Russia-Ukraine war and other geopolitical developments
enforced devaluation of the BDT against the USD, from USD/
134
Annual Report 2022
BDT of 85.80 at the beginning of the year to 107.00 at year
end, signifying around 25% depreciation within the span of only
a year. Bangladesh Bank, following in the footsteps of other
central banks, tried to ease depreciation of local currency by
directly bulk selling of USD to the market from its reserves.
In 2022, Bangladesh Bank sold USD 12.61 billion, which
somewhat helped in currency stabilisation. In the process,
the country’s FX reserves reduced to USD 33.75 billion in
December 2022 from USD 44.95 billion in January 2022.
Fortunately enough, due to the ongoing policy measures
adopted by Bangladesh Bank comprising stringent import
and LC norms, stimulus on NRB remittance and prudent yet
stable depreciation of BDT, the local currency is buoyant right
now with a relatively stable macro-financial landscape. The
year 2023 is expected to be somewhat challenging in the FX
backdrop as well, with benefits of all policy measures expected
only by the second half of 2023.
Creating success stories amongst medium and mid-market corporate business customers by enabling
them to thrive amid business challenges and market cycles!
Strategic intent
•
•
•
Remain at the forefront of financial innovation for midmarket/emerging corporate customers by serving their
custom financial needs
•
our technology platforms and make it easy for our clients
to do business with us
•
Provide easy access to the full range of banking tools and
scalable solutions through our middle-market industry
specialists
Facilitate long-term success of our clients through our
‘one bank-one team’ approach that helps our customers
manage everything, from daily operations to cash
management to realising their global ambitions
Review
As a significant financial services provider to mid-market or
emerging corporate companies of Bangladesh that have
unique financial services requirements with respect to them
being big for SME Banking and small for large Corporate
Banking, City’s Commercial Banking group has been making a
mark with custom solutions and global resources designed to
help them prosper.
With a full suite of products and scalable solutions, our middlemarket industry specialists help customers succeed, whether
through boosting efficiency of their day-to-day operations,
or by providing financing solutions for growth opportunity.
Furthermore, we also ensure enhanced security through
ongoing surveillance and reporting capabilities.
Commercial truly provides solutions that support growth.
Through a dedicated banking relationship, our clients can gain
access to an extensive suite of solutions, which includes credit
and financing, treasury and payments, payables and receivables
solutions, liquidity management, international trade and Islamic
banking, among others. Each of these solutions scale to fit our
customers’ size and aspirations, thus ensuring they remain
relevant to their business objectives and growth cycle.
Ensure technological enhancement dedicated to improving
Remain deeply rooted in the communities we serve and
ensure that our decision-making is close to the ground
and hence relevant and best-suited to the needs of our
clients
•
Support our customers to take advantage of new
opportunities by proactively sharing insights into the
latest trends, best practices and research
A solutions-driven offering is complemented by knowledgeable
relationship managers and product specialists who ensure
personalised solutions that yield the desired outcome. Thus,
by partnering with a team of specialists, our easy-to-use
banking solutions enable our customers to spend more time
running their business and hence not only realise their own
ambitions, but contribute to the success of the nation too.
We understand that this client set has unique hybrid needs,
something that few other banks in the nation have been able
to successfully cater to. As a business with distinguished
and specialist capabilities built over time, we understand the
market and this places us in a favorable position to continue
harnessing possibilities in the field as our customers scale up
to become the giants of tomorrow.
Today, City Commercial is deeply invested in and interwoven
with the commercial business climate of the nation. It is
amongst the market leaders in Bangladesh on account of
a comprehensive array of banking solutions, specialised
expertise in solving complex customer challenges, rich domain
expertise, profound familiarity with the operating environment
and a strong network of partners.
Annual Report 2022
135
Our Foundations
COMMERCIAL BANKING
Operational update
Notwithstanding the challenges of 2022 that arose due to
the tail effects of the pandemic and now the war in Ukraine,
City Commercial was able to achieve a solid performance that
exemplified our clients’ spirit of performing against adversity.
advance the reputation of the business in meeting demanding
customer requirements.
We also enrich our solutions capabilities in our bid to
continuously offer our clients cutting-edge products and
services via our professional financial advisory services,
The Bank has built a robust Commercial Banking franchise that
enjoys a strong reputation in the market. This reputation is
rooted in customer endorsements that have helped to further
leveraging our global network, such as our subsidiary City HK,
Financial update
unique and innovative ways to serve their clientele and build
By staying close to our customers, the group achieved a sharp
comeback in performance, with our wide suite of banking
offering meeting the post-pandemic economic revival.
Further, we perceived our customers’ intent to make up for the
lost time and hence there was a certain degree of aggression
with which our clients approached their business to not only
achieve annual performance expectations but also build for
the long-term. The true Bangladeshi spirit of enterprise and
entrepreneurialism was on display as our customers explored
while also providing information to our clients on refinancing
programs of Bangladesh Bank, etc.
their competitive advantage.
Their success stories mirrored our performance too, as City
Commercial reported an appreciable performance in 2022.
The group’s total revenue expanded by 20% to BDT 985 mn,
net interest income (NII) increased by 26% to BDT 750 mn,
operating profit scaled by 26% to BDT 743 mn and loans and
advances rose by 29% to BDT 33,639 mn. Moreover, growth
in total operating cost was restricted to 6% to BDT 242 mn,
which contributed to expansion in the operating profit.
29%
12%
YoY growth in loans and advances
YoY growth in trade volumes
2022
2021
Loans and advances
Key metrics (BDT mn)
33,639
26,102
Import and BG
46,235
47,315
Export
21,125
12,908
Total trade volume
67,360
60,223
Key trends
•
•
•
Strong recovery was witnessed in the first half of 2022,
with pandemic pressures easing and industry re-focusing
on growth and expansion
Reliance on custom banking increased as industry players
targetted aggressive growth and financial transformation
to make up for the two years lost due to the pandemic
The second half of the year created pressures as
the full effects of the war in Europe became evident,
136
Annual Report 2022
hampering the domestic business environment as well as
international trade
•
Industry became more focused on research, innovation
and product/service differentiation to build resilience and
ensure continued performance
•
The trend of spotting opportunities and transforming
these into monetisable business solutions became more
acute in the face of a challenging operating environment
and intense competition
Our Foundations
2023 roadmap and medium-term outlook
In an uncertain environment with pockets of opportunity, the Commercial Banking group will bolster its role as a partner
of choice in the growth journey of its clients, remaining invested in their success.
As customers look to go beyond the pandemic challenges, re-commence the execution of their plans and strategies and
have a “growth” mindset, we have set our sights on growing the business as well. Our expectation is that the current year
(2023) will also be one where we will continue to build on the stellar performance of the prior year (2022). We have laid
out the following blueprint for now.
Pursue opportunities in Islamic finance
Enhance fee/commission-based income that is profit-positive
Work closely with other stakeholders such as Cash Management &
Structured Finance Unit (SFU) for serving our clients better
Work towards garnering low-cost funds
Place special attention to stressed accounts
Increase net interest margin (NIM)
Annual Report 2022
137
SUPPLY CHAIN FINANCE
Unlocking trade potential, facilitating business transformation!
Strategic intent
Maximising finance coverage
of distribution chain
Ensuring efficiency of large
and complex supply chains
Enabling business
transformation through
improved trade finance
Facilitating better risk
control through authorised
receivables and payables
financing
Create access to low-cost
SCF facilities (over NBFIs) for
customers
Accelerating digitisation and
digital inclusion
Ensuring less documentation
and real-time transactions
Augmenting cash flow for
supply chain participants
Review
capability, but also retention via product and service quality.
Supply chain finance (SCF), also known as supplier finance,
consists of financial solutions that optimise cash flow
and working capital for suppliers and distributors, hence
reducing risk throughout the supply chain. It is fast becoming
increasingly popular among major corporations and their
small and medium-sized suppliers in Bangladesh.
The demonstrated usability of our solutions as being
more cost-effective than direct working capital finance or
conventional trade finance alongside greater convenience has
made it even more desirable amongst the target market.
Since its inception in 2018, City Bank's SCF has been at the
forefront of innovation in the digital online SCF platform.
The team has achieved remarkable success throughout the
years through concerted efforts in awareness-building of the
benefits offered, including trade simplification, better risk
control and progressive business transformation.
Within a short span of time, City SCF has risen to become
the market leader in its industry. Today, the division has won
the confidence of a variety of businesses, with virtually all
major consumer corporations with big Tier-I, Tier-II, and TierIII ecosystems as clients. This is due to the Bank offering a
wide array of relevant services easily accessible via the online
SCF platform in a straightforward and accessible manner,
including online supplier finance, factoring, reverse factoring,
and purchase order financing.
A bank-led push into this sector, along with supply chain
financing gaining acceptance owing to its sound offering,
particularly among SMEs as it directly connects small suppliers
with major corporates, has resulted in a phenomenal 83% YoY
increase in the asset base of City SCF over the past two years.
Furthermore, City SCF’s PBT has increased by 70% during
the same period, demonstrating not just client acquisition
138
Annual Report 2022
Operational update
Among the key industries supported are:
•
Fast-moving consumer goods (FMCG)
•
Readymade garments (RMG)
Telecommunications
Feeds, Banglalink Digital, edotco, Arla Foods, IOM, UNHCR,
•
Information technology (IT)
Renata, Eskayef Pharmaceuticals, among others.
•
Leather
•
Pharmaceutical
Key trends
•
Agro-based industries
•
Services industry
•
Supply chain is still in its infancy in Bangladesh and hence
has a large addressable market, especially comprising
Some of our major customers include suppliers of large
and diversified organisations, such as PRAN RFL Group, ACI
Limited, ACME Laboratories Ltd, Paragon Group, Quality
small and medium segments
•
Customers are onboarding SCF at a fast pace on account
of its attractive proposition
2023 roadmap
•
SCF will initiate a special campaign to take over factoring clients from NBFIs through offering a better low-cost
proposition while still providing exceptional City SCF features
•
Increase collaboration with the Corporate, Commercial, Medium, and Small Finance teams in order to obtain additional
business leads
•
Conduct a supplier event and launch a social media campaign to promote City SCF
•
Focus on product innovation and development as per customer needs
•
Place greater focus on monitoring supplier repayment from the anchors' end
•
Scale up the business in order to meet the asset and profitability budget for 2023
Financial update
Metric
2022
2021
1,680
997
PBT (mn)
53
31
Total customers
124
91
8
6
Total assets (mn)
Team size
Mid-term strategy (2-3 years)
•
Concentrate on manufacturing base suppliers and service providers that provide year-round supplies to corporations
•
Place greater emphasis on CBL's current commercial and medium-sized clients' suppliers
•
Select top anchors in various industries, such as the top-15 pharmaceutical companies, poultry feed mills, multinational
corporations, fast-moving consumer goods companies, cement and steel industry organisations, etc.
•
Focus on increasing the anchor base in the RMG and textile sectors that offer reverse factoring/factoring to their suppliers
•
Concentrate on increasing the number of CASA by generating at least five CASAs for each current supplier's associated
persons or business
•
Ensure price competitiveness for new or takeover clients with robust credit profile
•
Enhance digital interactions with anchors and suppliers throughout invoice submission, receipt, and collection processes
Annual Report 2022
139
Our Foundations
•
RETAIL BANKING
Providing differentiated, cutting-edge and diverse products and experiences to our customers in retail
financial services through clarity in direction and agility in execution!
Strategic intent
Create retail customerfacing franchisee
fostering reputation,
trust & security
Simple, intuitive &
seamless interaction
with Bank across
physical & digital touch
points
Build a platform of
engagement, affinity
& loyalty through
personalized products
& services
Overview:
City Bank’s Retail Banking Division, keeping customercentricity at the core of its operating values, not only strives
to provide multifaceted financial solutions to the emerging
base of retail customers, but also believes in long-term value
creation for them by continually adapting to the evolving
economic and financial landscape. Being one of the most
vibrant division of City Bank, which has been trusted by its
valued patrons for last 40 years, City Retail embraces global
best practices to deliver world-class retail banking experience
to its customers.
With an endeavour to become the most innovative and
responsive retail banking service provider of the country,
City Retail’s pivotal strategies throughout 2022 comprised
enhancement of customer engagement and loyalty, and
simplification and fine-tuning of processes. Through a delicately
designed relationship management architecture and driven
by the Bank’s ability to identify the right value proposition
Keep pace with
customer’s expectation
through innovation &
differentiation
Purposeful reimagination to create a
winning retail Bank of
the future
for the right customers through a well-researched approach,
every customer relationship is nurtured continually to ensure
enhanced stickiness with the Bank. Alongside providing the
Bank a compelling competitive edge by minimizing glitches
and maximizing efficiency, most of the process modification
initiatives were aimed to ensure frictionless banking journey
for our customers.
Geared by a group of agile, dynamic and innovative wings,
City Bank’s Retail Banking Division continues with its stride
towards evolving as one of the most competent retail hub
of the domestic banking industry. While the front-end wings
strive to pursue new business opportunities for the Bank
alongside deepening existing relationships, the back-end
wings execute multifaceted strategies to equip the front-line
employees with every essential instrument they require, be
it designing versatile products and services with unique and
contemporary features, or implementing state-of-the-art
FinTech, bringing a gamut of banking services right at the
customer’s fingertips.
City Bank’s Retail Banking Universe
Front end
Citygem
Branch
Banking
140
Annual Report 2022
Employee
Banking
City Alo –
Women Banking
City Islamic
Direct
Acquisition
Alternate Delivery
Channel
Our Foundations
Back end
Customer
experience
Products and
segments
Designed to cater the unique needs and preferences of diverse
customer segments with personalised offerings, City Retail’s
broad set of propositions includes Citygem for niche banking
experience for high net-worth customers, City Islamic for
customers seeking Shar’iah-compliant financial solutions, City
Alo for budding women entrepreneur segment of the country
and Employee Banking for emerging salaried executives.
Leveraging the benefit of a country-wide physical distribution
network and agile salesforce equipped with differentiated
tech-based solutions like Ekhoni app, WhatsApp Banking,
cash by code, one-click cash withdrawal, cardless deposit and
many more, all fronts of City Retail continue to march on their
illustrious growth journey.
Aligned with the country’s financial inclusion agenda, the
physical distribution network of the Bank continues to broaden
its reach through sub-branches, targeting to serve the
underbanked populations of suburban and rural areas. With
enhanced self-serviced terminals like cash deposit machine,
smart ATM, integrated voice response (IVR) and Smart IVR,
retail banking customers are harnessing the convenience of
instantaneous banking.
Process
re-engineering
Retail
marketing
customer-centric approaches not only enable us to broaden
the outreach of Retail, but also deepen relationships with
existing customers through enhanced group product holding
and group services availed, indicating enhanced customer
engagement and loyalty towards the Bank.
Adapting to the rapid digitization of the financial industry, Retail
continues to embark on technology and digital-led process reengineering, such as liability work flow, enabling the Bank to
accomplish enhanced capabilities and cost competitiveness,
while also attaining a competitive edge over other market
participants. Furthermore, Retail embeds digitization at the
core of its marketing strategy, providing customers more
personalised services, infused by a deeper understanding
of their choices and preferences, thus promoting the Bank’s
diverse range of retail solutions facilitated by tech-driven
service platforms and multifaceted customer touch-points.
With customer delight being the cornerstone of the division’s
value proposition, City Retail aims to ensure superlative service
experience for its customers in every avenue of retail banking
through well-researched customer feedback and prioritizing
their preferences. With innovation and responsiveness keeping
in view the prime focal point of development, best-in-class
products and services are designed and continually upgraded
to suit the requirements of every customer segment.
While aiming to broaden market outreach and make our
products and services more accessible, aligning to the highest
standards of governance and ethics, and adopting the best
market practice has always been a priority of Retail Division.
Backed by a disciplined approach in fund mobilization and
carefully articulated assessment framework, portfolio quality
is maintained to the highest level, safeguarding depositors
and shareholders, and generating sustainable value for them.
Partnering with the International Finance Corporation (IFC),
which as an investor and consultant of our Bank, reflects
our endeavour to adhere to best practices in the areas of
governance and compliance.
Furthermore, the successful addition of loan against second
hand cars and a comprehensive account solution for freelancers
in the existing product line reflects agility and responsiveness
in meeting growing demand. This innovative mindset and
Retail’s fundamental strength is its people. Guided by the
dynamic leadership and infused by a “service-first” attitude,
the collective force of Retail enables the division to stay on the
cutting edge of service excellence.
Annual Report 2022
141
Performance Highlights
Total assets
(BDT mn)
Total liability
(BDT mn)
Retail assets
disbursed (BDT mn)
NPL (%)
Total
customers
2022
2022
2022
2022
2022
56,820
221,550
30,266
2.1
1,355,424
2021
2021
2021
2021
2021
44,614
193,920
22,169
1.9
1,187,719
Proposition-wise customer base
448,301
107,231
86,582
City Alo (Women Banking)
customers
Employee Banking customers
City Islamic customers
Key performance 2022
28%
15%
Growth in total assets
Growth in total deposits
Growth contribution to the group
23.5%
16%
67%
of operating income
of total assets
of total liabilities
Macro-economic trends:
As a future-ready Bank, City Retail remains vigilant regarding
the macro-economic perspectives shaping the overall financial
industry. While the economy is still under recovery from the
142
Annual Report 2022
pandemic-driven meltdown, the escalated humanitarian and
US Dollar crisis and consequent inflationary pressure compelled
the banking industry to undergo several instantaneous and
rapid changes to remain resilient throughout 2022. Additionally,
due to high saturation of financial service providers in metro
become imperative to stay ahead of competition. Some of the
key trends shaping the retail banking industry are:
•
Focusing on remittance mobilization through formal
banking channels
•
Achieving cost optimization through process digitization
and re-engineering
•
Remaining sufficiently capitalized while keeping deposit
costs low
•
•
Launched “City Alo Enterprise” to facilitate entrepreneurial
activities of women aspirants, in collaboration with Retail,
SME, Corporate and Commercial divisions
•
Achieved BDT 50 bn milestone of retail asset portfolio while
keeping the portfolio quality intact
•
Ensured staggering growth on all fronts of Retail Division,
defying adverse economic conditions
•
Undertook initiatives to bring mass customers under digital
platform through massive revamp of self-service terminals
•
Developed a differentiated product line for freelancers by
providing them with 360-degree banking solutions
•
Enhanced customer engagement and loyalty with the Bank
through delicately nurtured relationships
Emerging preference for lifestyle-based niche banking
propositions like Islamic, Priority and Women Banking
•
Key developments of 2022:
Ensuring qualitative lending to keep the asset portfolio
standard to the highest level, safeguarding investor stake
2023 roadmap and medium-term outlook
Roll-out digital on-boarding among all
acquisition channels
Focus on upgrading mass customer segment
through increased group product holding & group
shariah availed
Drive low-cost deposit mobilization with
specific focus on Citygem, City Alo and
Islamic Banking
Bring mass customer segments under selfservice digital platform to increase efficiency of
physical channels, such as branches
Expand the Bank’s physical footprint through
establishment of more sub-branches
Launch bancassurance by tying up with renowned
insurance companies, thus facilitating insurance
solutions through the banking platform
Automate operational activities which require minimal
human intervention for enabling front-liners to focus
on business acquisition
Increase the pie of secured lending in the total
lending portfolio with heightened focus on retail
home loan and auto loan products
Increase share of wallet and product
holding through inter-departmental
collaboration
Increase sustainable low-cost deposit riding on
superior customer experience with the objective
of becoming the primary Bank for our existing
customers that include their family members’ banking
relationship too
Launch cash management proposition for small &
medium enterprises led by the branch banking team
Annual Report 2022
143
Our Foundations
areas, creating strong visibility with personalized offerings has
SUB-DIVISIONAL UPDATE
CITYGEM
Overview
Citygem, in the priority banking arena, exudes an essence of supremacy in the banking service it provides. It has not only redefined
but also established a renewed zenith of brilliance with unparalleled prioritized service in the industry. The proposition has also
provided our high net worth customers with tailor-made products and services to cater to their banking necessities. Aligning to
this superlative experience, the team itself embodies a strong spirit in providing expert and dedicated banking experience to all
its valued clients.
Key figures
415
38.4
15%
13.1
Citygem revenue achieved
(BDT mn)
Total deposit (BDT bn)
YOY growth in total
deposits
Low-cost deposits
(BDT bn)
15%
800
0.66%
Growth in low-cost
deposits
New Citygem members
on-boarded
NPL of Citygem asset
portfolio
Accomplishments in 2022
•
Introduced “Citygem Health”, a proposition where customers
are provided with complimentary coupons for executive
health check-up
•
Offered custom-made services to cater to the unique needs
of customers, ensuring utmost customer satisfaction
•
Organized engaging customer events in association with
reputed partners to enhance customer experience
•
Forged successful strategic collaboration with Employee
144
Annual Report 2022
Banking to provide Citygem facilities to top executives of
payroll companies
Roadmap for 2023
•
Revamp Citygem value proposition in response to the
dynamic customer needs
•
Introduce international airport pick-and-drop services in
various countries
•
Launch Priority Pass access for international travellers
•
Increase cross-selling and cross-referencing efforts for
expanding the customer’s overall relationship with the Bank
Overview
City Bank’s Islamic Banking wing, City Islamic, provides
a comprehensive solution for the emerging popularity of
Shari’ah-compliant financial products and services. Earlier
operating under the brand name of City Manarah, the Islamic
Banking wing was relaunched as ‘City Islamic’ just a year
earlier, making an immediate impact in the Islamic banking
sector of Bangladesh.
Keeping the highest level of Shari’ah compliance at the
heart of this proposition, City Islamic has an independent
Shari’ah Supervisory Committee. The main responsibility of
this committee is to oversee that the Bank’s products and
processes are designed and operations are conducted in
accordance with Islamic principles. The Shari’ah Supervisory
Committee of City Islamic is a mix of expert scholars and
industry practitioners whose experience and knowledge
ensure the fullest adherence to Islamic principles. In addition,
City Islamic is a proud member of a Bahrain-based not-forprofit organization, Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI), primarily responsible for
development and issuance of standards for the global Islamic
finance industry.
Key figures:
188%
109%
32.3
Growth in City Islamic
customer base
Growth in City Islamic
revenue
City Islamic deposit book
(BDT bn)
55%
17.3
129%
Growth in City Islamic
deposit book
City Islamic investment
book (BDT bn)
Growth in City Islamic
investment book
Accomplishments in 2022
Staggering growth in portfolio:
BDT 1,000 mn revenue milestone:
City Islamic customer base reached to 86,582 at the end of
2022. The deposit book grew by 55% during the year, taking the
portfolio to BDT 32.3 bn. Simultaneously, the investment book
grew by 129%, taking the Investment portfolio to BDT 17.3 bn.
City Islamic crossed the revenue milestone of BDT 1,000 mn
by reaching BDT 1,085 mn at the end of 2022. This is a huge
achievement as this figure is almost double when compared to the
revenue of 2021. Advancing with this spirit, we are hopeful that we
will exceed the milestone of BDT 1,500 mn revenue in 2023. With
continued innovation and adoption of the proposition, City Islamic
aims to achieve many more milestones in the coming years.
Integration with Citytouch app:
To make the banking experience smoother for our customers,
Islamic Banking services were integrated with the Citytouch
app in 2022. These services were only accessible through the
Annual Report 2022
145
Our Foundations
CITY ISLAMIC
web browsers earlier. This integration has enabled customers
to conduct their banking activities within minutes using their
smartphone.
Partnership with bKash:
Aligned to the vision of becoming the Bank of preferred choice
as the most digitally advanced and Shari’ah compliant financial
solutions provider, City Islamic partnered with the number one
Fintech company of Bangladesh, bKash, and launched the first
Shari’ah compliant digital DPS product that could be availed
through the bKash app. Within a short span of time, 17,000+
customers opened their Digital DPS with City Islamic via the
bKash app.
Recognition of excellence:
2022 was also the year of being bestowed with awards and
recognitions from internationally recognized bodies. For example,
in recognition of the outstanding contribution to the growth of
the small and microfinance industry of Bangladesh, City Islamic
got awarded as the Best Islamic SME Bank of Bangladesh by
‘Asset Triple A’. Global Brands magazine also recognised City
Islamic as the Best New Islamic Banking Window.
Roadmap for 2023
Launch Visa Islamic credit card
Design new variants of products for Islamic Retail, SME & Corporate customers
Introduce Islamic Agent Banking
Focus on implementing Islamic digital financing products
Expand trade business
146
Annual Report 2022
Our Foundations
CITY ALO
Overview
Redefining the concept of banking, City Alo has positioned itself
as the best women banking solution with unmatched brand
image and market proposition. With the upsurge of women
participation in economic activity with them requiring a trusted
financial partner, a tailor-made banking solution for women is
the need of the hour. City Alo, with boutique financial services
for aspiring women entrepreneurs, is perceived as a trusted
partner in their journey of financial inclusion and independence.
Here at City Alo, women customers are welcomed with the
warmth, respect and care and their successes are celebrated
to encourage fellow members.
Unlike conventional retail banking targeted to the needs
of individual customers, City Alo emphasizes on designing
banking solutions to entrepreneurial segments, while also
catering to the banking and financial needs of individual
customer segments. Through various initiatives in fostering
entrepreneurship, City Alo not only addresses the financial
needs of women entrepreneurs, but also strives to equip
them with the expertise required for market break-through
and standing out in the competition.
With a strong belief in collaboration and the significance of
choosing the right partners, City Alo is forging an association
with different government bodies, international organizations,
women chambers and associations, educational institutions
and training centers and many more. The idea is to create an
ecosystem for nurturing a vibrant women banking wing that
could facilitate women entrepreneurs to thrive by providing
them with essential support. At the same time, City Alo
cares for their health and wellbeing as much as they do for
their financial success. Thus, by partnering with numerous
merchants, we are able to provide City Alo customers plenty of
preferential offers across the country, which reflects our sense
of care and empathy.
In a nutshell, City Alo is the platform that facilitates holistic
women empowerment and well-being.
Key figures
63.0
23%
11.2
55%
24%
Total deposit
portfolio (BDT bn)
Growth in deposit
portfolio
Total loan portfolio
(BDT bn)
Growth in loan
portfolio
Growth in new women
credit card customers
25
18%
CASA portfolio
(BDT bn)
CASA growth
60
280
Establishment of City Women entrepreneurs
Alo service desk at received City Alo Women
branches
Entrepreneurship
Certification
Annual Report 2022
147
Accomplishments in 2022
Enhanced propositions and branding
•
Launched “Alo Women Entrepreneur Finance”, a micro
lending facility in collaboration with SME-S, to empower
upcoming grassroots women entrepreneurs
•
•
•
•
•
Onboarded “Kavazo” as our new coffee partner for Gulshan
Women Branch - the first-ever coffee-lounge banking
branch located in the heart of the capital
Organized a 2-day long women entrepreneur fair at NSU
for “City Alo Certification Program” graduates comprising
60 women entrepreneurs and graduates of the certification
program showcasing their products and services
•
Equipped 60 branches with ‘City Alo Service Desks’,
dedicated service points with electronic queue
management, to provide women customers with
prioritised banking services
Organized a 3-day long women entrepreneur fair in
Khulna in association with BWCCI with an overwhelming
participation of 40 women entrepreneurs, which was a
great success
•
Organized several merchant campaigns targeting special
occasions, such as Durga Puja, wedding season, etc.,
offering attractive promotional discounts
Co-sponsored “Her E-Trade Exhibition”, a 2-day long fair
organized by Facebook-based women entrepreneurs’
platform, “Her E-Trade”
Awareness and well-being:
Onboarded 80 new merchants during 2022, taking the
total merchant count to 149.
Financial literacy programs
In an endeavour to pave the success journey of budding
women entrepreneurs, City Alo has designed several
customized knowledge, awareness and capacity development
programs exclusively for them in collaboration with different
women chambers, international organizations and renowned
educational institutions. Some of the major initiatives
undertaken in this regard in 2022 are:
•
Conducted 4 City Alo Certification Programs in collaboration
with three renowned educational institutions covering
120+ participants
•
•
•
them a platform to showcase their expertise to infuse
confidence and the sense of accomplishment amongst them.
In these endeavours, several initiatives were taken during
2022 to promote women entrepreneurs:
•
Launched “Aspire to Inspire”, an event organized for CBL
women employees to discuss about work-life balance
•
Conducted events with two renowned corporate houses
for creating breast cancer awareness among female
employees
Roadmap for 2023
City Alo, in the year 2023, will focus on making City Bank
the most preferred Bank for women from all segments of
Bangladesh through taking several initiatives to provide more
value to the women entrepreneurs of the country.
•
Facilitated 23 Entrepreneurship Development Training
sessions, an entrepreneurial capacity development project
by SEIP-BWCCI covering more than 400 participants from
all over the country in different segments
Increase outreach of ongoing financial awareness sessions
for women to the outskirts of the country, striving to
promote financial inclusion and gender equality resulting
in impactful role in decision-making
•
Conducted 3 Uthan Boithoks, a financial literacy
session for the rural audience, with participation of an
overwhelming number of women entrepreneurs from the
local community engaged in diverse businesses
Launch tailor-made products and value propositions
focusing on female health and wellbeing; banking solutions
for the young generation and a future plan scheme for
mothers and their newborns
•
Expand horizons for “City Alo Entrepreneur Finance”
products to reach all corners of the country, providing
financing for small-sized businesses operating in trading,
manufacturing, services, agriculture and agro-based
industries
•
Create the first-ever platform for upcoming female
entrepreneurs to showcase their business/products
and provide required assistance in their path through a
specially tailored mentorship program
Organized a 3-day long consultancy program on taxation
for women entrepreneurs who have participated in the
City Alo Certification Program
Entrepreneurial fairs:
Not only does City Alo aspire to make women entrepreneurs
competent, resilient and adaptable, it also strives to provide
148
Annual Report 2022
Overview
In the era of economic advancement with an upsurge of young
professionals entering into the mainstream workforce, finding
one-stop solutions for all banking needs has become a crucial
demand of the burgeoning employed segment.
In this regard, City Bank’s Employee Banking wing provides
the right payroll and other solutions to meet all the financial
needs of this thriving segment through offering a wide range
of products and services. Through the right choice of corporate
partnerships and efficient nurturing of customer relationships,
City Bank Employee Banking not only brings the convenience
of a single touchpoint for all banking solutions to its target
customers, but also contributes as a one-stop acquisition
channel of a large group of customers for multiple products.
Additionally, with the inclusion of Islamic Banking solution,
City’s Employee Banking has become the preferred choice
of most of the renowned corporate houses seeking holistic
banking solutions for their employees.
What has been our numerical performance in 2022
32,569
38.4
47%
28%
Accounts opened in 2022
Salary disbursement
enabled (BDT bn)
Growth in salary
disbursement under EB
account
Growth in deposit portfolio
Accomplishments in 2022
Roadmap for 2023
•
On-boarded 117 new companies in 2022, taking the total
count to 562
•
Onboard multinational companies, renowned corporate
houses and conglomerates
•
Average salary disbursement increased to BDT 35k from
BDT 26k per account
•
Focus on acquisition of more qualitative accounts, thus
increasing the average salary disbursement per account
•
93% EB customers were brought under the Citytouch
platform
•
Train the acquisition channel to enhance contribution in
both asset and deposit portfolios
•
Less than 3% EB customers had to visit a branch for banking
service as a consequence of Citytouch augmentation
•
Emphasize on acquisition of City Alo and Islamic Banking
accounts
Annual Report 2022
149
Our Foundations
EMPLOYEE BANKING
BRANCH BANKING
Overview
Spanning the length and breadth of the country, City Bank’s
Branch Banking network has an unparalleled reach. Being
the fulcrum of customer relationships, Branch Banking
not only brings a physical proximity to customers, but also
establishes their emotional attachment with the Bank, making
it their trusted financial partner over three generations of
customers. Having a diverse range of products and services
encompassing almost all arena of banking requirements, the
financial supermarket facilitates most of its banking solutions
through its Branch Banking network. Through 133 branches
and 12 sub-branches, Branch Banking network has an imprint
across the country, enabling it to build extensive engagement
with customers, alongside facilitating active participation in
the country’s inclusive development agenda.
Key figures
133
12
27
10mn
Branches
Sub-branches
Foreign currency
transaction-enabled
branches
Booth at HSIA to
facilitate 24x7 import
duty payments
179
14%
84.2
12%
Total deposits (BDT
bn)
Growth in total
deposits
Low-cost deposits
(BDT bn)
Growth in low-cost
deposit base
Accomplishments in 2022
•
Branch priority customer deposit portfolio reached to BDT
3.2 bn
•
Inaugurated new branch at Bashundhara R/A, one of the
most promising areas of Dhaka, to cater to the banking
needs of its rapidly expanding catchment population
•
Renovated 6 branches and relocated 10 branches,
providing customer’s greater locational advantage and
scope of engagement with the Bank
•
Conducted an extensive training program for branch
professionals, among which 21 programs were facilitated
by senior executives of Bangladesh Bank
Roadmap for 2023
•
Establish 35 new sub-branches to expand the Bank’s
geographic coverage
150
Annual Report 2022
•
Facilitate foreign transactions through 78 Authorized
Dealers (foreign currency transaction enabled) branches in
addition to existing 27 branches
•
Launch cash management proposition for small & medium
enterprises, led by the Branch Banking team
•
Increase sustainable low cost deposit riding on superior
customer experience with an objective to becoming the
primary Bank for our existing customers that include their
family members’ banking relationship too
•
Conduct extensive training program on various products
and services, with emphasized focus on foreign
transactions and Islamic Banking
•
Mobilize low cost deposits in collaboration with City Alo
and City Islamic
•
Enhance relationship value of existing customer base with
the Bank
Through these self-service kiosks, cash processing has been
ATM/CDM NETWORK
enabled 24/7. Rebranded as “City Smart”, the network is
Overview
incessantly expanding its coverage through adoption of state-
Aimed to bring the Bank’s physical proximity to customers and
ensure round-the-clock service, City Bank has an unparalleled
network of R-ATMs, ATMs and CDMs all over the country.
of-the-art technology in alignment with the Bank’s core moto
to serve customers with smart financial solutions, as the
name signifies.
Key figures
415
175
79%
227
Terminals (R-ATMs 240,
ATMs 111 and CDMs 64)
ATM transaction
volumes (BDT bn)
Growth in ATM
transactions volume
ATM booths enabled with
real-time cash deposit
option
2.4mn
695
21
Off-us ATM transactions
facilitated (18% of total
transaction nos.)
Cash withdrawal with
Cash by Code through
ATMs (BDT m)
Cardless cash deposit
through ATMs (BDT bn)
Accomplishments in 2022:
Roadmap for 2023
•
Promote 24/7 ‘City Smart’ channel for cash deposit and
credit card bill payment
Introduced 1-click cash withdrawal
•
Enable cash withdrawals from MFS via the City Smart
Network
Enhanced single transaction deposit and withdrawal limits
•
Automate the processing of deposit vouchers and
cheques, as well as the use of automated teller machines
and a short message service portal
•
Revamp helpdesk to ensure smoother and faster
processing of customer service requests
•
Reduce the time taken to resolve any disputed transaction
•
Reduce over the counter transactions, especially at hightraffic branches, riding on newly set RATMs and RCDMs
•
Rebranded ATM network as “City Smart”
•
•
and daily limits
•
Introduced RPA-based reconciliation and monitoring
module for ATM service
•
Six branches facilitated with optimal module to redirect
deposit of credit card bills and smaller amounts
Annual Report 2022
151
Our Foundations
ALTERNATE DELIVERY CHANNEL
CALL CENTRE
Overview
With the finest operational infrastructure and enthusiastic
resources infused with superior customer service and product
knowledge, City Bank’s Call Center has become the epitome
of service excellence in the banking industry of Bangladesh.
Bringing banking service to customer’s finger-tips, the call
center network not only facilitates the branches in capacity
optimization by shifting a large chunk of service requests
diverted from there, but also ensures customer convenience
by not having to stand in long queues at the branch.
Key figures
96%
4.5
13%
73%
CSAT score in 2022
Calls fielded (mn)
Call volumes increased vs.
2021
Reduction achieved in call
waiting period over last 2
years
Accomplishments in 2022:
•
Onboarded external service providers for selective
outbound services
•
Reduced average call waiting time to only 17 seconds
•
Converted 39% calls to IVR and SIVR
•
Achieved 19% improvement in call center service levels
Roadmap for 2023
Re-launch SIVR with enhanced self-service features and functionalities
Initiate strategies to encourage call center customers to use SIVR
Implement missed call banking for top customer inquiries
152
Annual Report 2022
Our Foundations
CUSTOMER EXPERIENCE
Overview
Built upon a strong “service first” culture, City Bank always
puts customer experience in its area of key focus. With
“customer delight” being at the core of the Bank’s values, City
Bank understands the significance of customer satisfaction,
not only to keep the Bank’s brand image uplifted, but also for
widening its customer base.
Leveraging on its wide-spread physical network, numerous
customer touchpoints and well-equipped resources ready
to serve, City Bank strives to put a smile on the face of its
valued patrons by ensuring seamless customer experience
and providing instantaneous solution to any banking
grievance they face.
Key figures
39%
27
95%
Reduction in no. of customer
grievances
Business and operational SLAs
monitored
SLAs met vs. 91% in 2021
Progressed achieved in 2022:
•
Average Net Promoter Score (NPS) increased to 90% in
2022, up from 77% in 2021
•
Detractor reduced to 2% in 2022 from 3% in 2021
•
A number of processes were simplified and TAT reduced
for card services
•
Introduced central monitoring for Electronic Queue
Management (EQM) system, which reduced average
serving and wait time
Roadmap for 2023
Introduce portals for Complaint Management,
Bangladesh Bank Audit Reporting, locker and
dollar availability information and scorecard
analysis for digital channels monitoring
Organize multiple nation-wide functional and soft
skill training programs to improve service culture and
standards
Automation of Branch Premises Checklist
Initiate NPS and SLA monitoring for Merchant Service,
ADC channels and Agent Banking
Automation of NPS and integration with
Call Center solution and EQM
Promote digital channels for customer
onboarding and service requirements
Annual Report 2022
153
Leadership Message:
The year 2022 showcased Bank’s philosophy to embark
on innovation and digitization enriching its transformation
journey. Our continuous endeavor to adopt state-of-the art
technology is the key to stay ahead of competition in the era
of rapidly evolving financial industry. Last year, City Retail has
focused on bringing the customers under digital platform
through continuous improvement of its tech based financial
solutions & self-service terminals. We believe we have always
more to do to add value for our stakeholders by adapting with
the newer ways which we demonstrate through our relentless
effort to process re-engineering & fine-tuning to ensure
frictionless & delightful banking experience for customers.
City Bank has always prided in its values and has taken it as its
driving factor. Riding on its value of result driven and aided by
its strong arsenal of resources infused with the value engaged
& inspired, City Retail has attained phenomenal success in
its all avenues. The renewed avenue of City Islamic has gone
through remarkable growth tapping the country’s unmet
demand as customer base more than doubled last year,
along with other numbers such as investment portfolio &
revenue growth that also doubled. Our another relaunched
proposition City Alo have redefined the value of customer
delight which doesn’t confine its periphery to providing
financial solutions & banking service only, but broaden
its outreach in holistic empowerment of budding women
segment through participating in their financial literacy,
awareness & well-being. With an unparalleled advantage of
country’s finest digital platform and a full suite of products
154
Annual Report 2022
in its diversified set, City Retail customers are enriched with
anywhere & anytime banking convenience.
At City Bank, like any other organization, our biggest strength
lies on our people who drive the growth-wheel. City Bank
prides on its employees and strives to create an inclusive
culture at workplace that not only focus on their career
progress, but also cares for their self-development, wellbeing & work-life balance. As an exercise of enlightenment
to our employees, learning modules are continuously
prepared & shared along-with training facilitated by both
in-house & industry experts to equip our resources with
knowledge and skill.
As we approach a new era of technological evolution, it has
become imperative that banking solutions are synced up with
digital platform bringing it to customer’s fingertips. As a future
ready bank, we value the need for continuous innovation &
technological progress providing our customer the momentum
to keep pace with modern requirements which we have
demonstrated through several initiatives taken in the years
earlier. While digital onboarding & facilitation has remained in
the focal point to tap in the emerging retail segment, we also
care about bringing physical proximity & bonding emotional
attachment with our customers to strengthen customer’s
engagement by amplifying their relationship value hence
loyalty with the Bank. For the year ahead, we will continue to
focus on broadening our outreach to the customers in both
physical & digital platform and enhance our performance to
stay aligned with customer’s expectation ensuring enhanced
customer delight and sustainable growth for the Bank.
Our Foundations
SMALL & MICROFINANCE
Providing differentiated, cutting-edge and diverse products and experiences to our customers in retail
financial services through clarity in direction and agility in execution!
Strategic intent
Bring small and
microfinance (MFI)
customers into the
formal banking system
Build incomegenerating capacity
among borrowers
Cultivate resilience and
adaptation capability
of society
Offer risk-based
pricing in accordance
to borrower profile
Provide a gamut
of financial literacy
services, including
basic insights into
banking and business
enhancement
Review
Operational update
Since its inception in 2018, the Small & Microfinance (S&MF)
Business Division of CBL has been a shining embodiment
of the Bank’s effort, drive, growth and resilience, as well as
its passionate dedication to serving the underserved micro
and small enterprises of the CMSME segment of the nation.
The year 2022 was no different and was about revival and
continuing on the growth curve to meet our strategic intent.
The Bank’s S&MF’s position in the sector is a manifestation
of its performance trajectory. For instance, the number of
customers has rapidly multiplied from 7,829 in 2019 to 29,011
in 2022, thus symbolising a near 4-fold growth. A large part of
this growth is attributable to our concerted efforts in creating
a comprehensive and diversified customer access network
comprising Agent Banking, Branches and SME Unit Offices,
which now provide SME services from 215 sites around the
nation.
Over the years, S&MF has maintained its loan disbursement,
collections and monitoring operations based on the
foundational pillars of:
•
Enabling access to banking finance
•
Offering customised solutions and
•
Building resilience amongst the borrower community
Considering the risks and operational costs involved in the
cottage, small and MFI banking segment, most banks choose
to service the more typical corporate, commercial, and medium
organisations in the borrower category. Among the few of
banks that provide this service, City Bank’s S&MF business is
the newest and amongst the fastest growing such segments
in Bangladesh with a portfolio size of BDT 31,413 million that
swelled by 58% in 2022 over the prior year period.
In addition, our focus on growth, keeping portfolio quality in the
front and centre of our business is evident in the percentage
of NPLs at just 0.54% against a background of 96% noncollateralised or unsecured credit. Amid the post-pandemic
recovery, this demonstrates not just our meticulous approach
to credit screening and underwriting, but also our efficient
monitoring and collections operations.
Thus, CBL’s S&MF now has the most pristine small company
portfolio in the nation, with NPL numbers far below industry
norms. Further, the fact that our workforce increased by
45%+ to 803 people in 2022 is indicative of our rising zeal to
profitably penetrate the market and continue to add to the
growth momentum, in addition to our position as an employer
of choice.
Annual Report 2022
155
The business achieved several highlights during the year,
indicated as below.
•
7,679 new businesses onboarded in the Bank’s network
•
Net asset expansion of BDT 11,590 mn achieved (total
portfolio rose to BDT 31,413 mn)
•
Net deposit growth of BDT 950 mn, with total deposit
book at BDT 2,990 mn
•
BDT 2,480 mn disbursement made under Islamic Financing
•
BDT 2,800 mn Remittance Loan disbursed
•
BDT 27.80 mn non-funded income achieved from Distributor
Finance, with 955 new distributors enrolled comprising
cumulative transaction value of BDT 1513.8 mn
•
Launched a new product “City Alo – Women Entrepreneur
Finance” with the goal of accelerating financial inclusion
amongst small women business-owners
•
Received special mention awards under two categories –
“Product Innovation of the Year” and “SME Financier of the
Year - Asia” at the SME Finance Awards 2022, organised
by SME Finance Forum
Financial update
Metrics
2022
2021
2020
Total assets (BDT mn)
31,413
19,823
14,360
Total liabilities (BDT mn)
2,990
2,039
1,390
NPL
0.54%
0.16%
0.07%
Total customers
29,011
20,952
15,117
803
552
463
Team size
Two-wheeler finance
Key trends
CBL’s two-wheeler loans are intended to serve the needs of
segments such as self-employed professionals, enterprises,
landlords, ride-sharing app bike users, and staff of proprietorship
and partnership firms, etc. Catering to the needs of the target
market through a thoughtful product offering, the business
has witnessed sound growth over the years, especially backed
by demand for personal mobility due to the pandemic. The
structural demand drivers of fast and low-cost mobility amid
gridlocked traffic jams and rising fuel prices remain to fuel the
two-wheeler finance segment in the future.
•
Key segmental reportables of 2022 include:
•
Total assets of BDT 621.8 mn
•
Disbursement of BDT 416.8 mn corresponding to 20.6%
YoY growth
•
New loans of 2,261, with 14.2% YoY growth
•
Total active base of 5,355 customers
•
NPL of 2.25% with efforts in reduction
156
Annual Report 2022
H1 2022 brought about steep growth, triggered by the
post-pandemic recovery and roaring exports
•
However, as the impact of the Russia-Ukraine war became
apparent, things took a U-turn as exports dropped due to
cutback in global demand, and imports reduced due to
regulatory action and other global factors that enforced
a negative impact on trading and import-dependent
businesses
•
For the banking industry, the year 2023 will be one of
caution in light of a worsening economic situation creating
a spectre of rising bad loans; further, interest rate caps on
lending will also be a challenge to contend with
•
However, there continues to exist an acute need for
financial inclusion and financial services deepening
amongst the unbanked and under-serviced population
segments to help realise their full potential
Our Foundations
2023 roadmap
Ensure renewed focus on expanding S&MF deposits to ensure more capacity
for lending through own-sourced funds
Accord special emphasis on agriculture financing to assist in food supply sufficiency and
support a more resilient agrarian ecosystem
Enhance efficiency and ensure improved cost management by
streamlining business operations
Drive growth in innovative products, such as Islamic Finance,
Remittance Loan and Distributor Finance
Increase the number of women entrepreneurs
financed under the new City Alo product
Ensure cautious growth with a much stronger
focus on maintaining asset quality
Outlook in a nutshell
Cautionary growth
approach in 2023
Special emphasis
on customised and
unique banking
products
Special emphasis
on agricultural loan
disbursement
Increase deposits to
ensure greater lending
through own source
Further strengthen
monitoring and
collection efforts
Annual Report 2022
157
MEDIUM ENTERPRISE BANKING
Providing a holistic range of essential banking solutions to small and medium-sized businesses, hence
contributing to a critical growth driver of the economy!
Strategic intent
Play a role as a development and
business transformation partner for this
customer segment that is the backbone
of the economy
Emphasise on relationship-based
banking as a key differentiator for
sustainable competitive advantage
Focus on banking for this segment for
meeting the goals of industrialisation,
reducing poverty, propelling economic
growth and ensuring employment
creation
Review
manufacturing sector by 6% to 33% in 2022 as well as increase
City’s Medium Enterprise Banking group has built a vibrant
banking franchise with strong relationships with scores
of businesses operating in diverse industries dotting the
country. The group offers a wide array of banking products
and solutions that meet the essential financial services
needs of this segment for facilitating business growth. These
entities are resilient and adaptable and have showcased the
Bangladeshi spirt of entrepreneurialism, innovation capacity
and hardy spirit.
exposure to the services sector by 15% to 19% during the year.
Financial update
The big picture highlight was that the division was able to do
“more with less”, which remained a key mantra throughout the
year. Thus, even as the business achieved reduction in team
size by 4.5% during the year, all key financial metrics were up,
including total assets (12.5%), total liabilities (28.2%) and total
non-funded business (10.4%). Further, there was also an uptick
in average loan ticket size to Tk. 32.7 mn during the year, up
Operational update
from Tk. 21.3 mn in the prior year. Besides, reduction in NPL
SMEB reported a creditable performance in the year 2022,
focusing on harnessing relationship value built over the
years with a large ecosystem of customers. The division has
enabled transformation of a number of businesses, which
has also aided its own growth. With a strong reputation built
over time, the group has been able to enhance exposure to the
Key metric
by a sharp 300 bps to 14% in 2022 also indicated the group’s
efforts in better screening of loan application and rigorous
follow-up standards. We will continue with this focus with a
view to enhance asset quality to bring NPL to tolerable levels
and lower loan loss provision, thus boosting profitability and
contribution.
2022
2021
Total assets (Tk. mn)
45,280
40,255
Total liabilities (Tk. mn)
9,201
7,175
Total non-funded business (Tk. mn)
32,431
29,384
NPL (%)
14%
17%
Average ticket size (Tk. mm)
32.7
21.3
Team size
125
131
158
Annual Report 2022
12.5%
28.2%
10.4%
3%
Growth in total assets
Growth in total liabilities
Growth in non-funded
business
NPL reduction over
prior year
Key trends
•
developed nation to a developing nation
SME sector regarded as the engine of GDP growth and
•
Weakening micro-financial environment expected to exert
pressure on this segment, as impact is disproportionate
considering their size
•
However, recovery is also faster for this segment due to
their small size and greater business agility
employment creation
•
Growth of small and medium-sized enterprises over the
years triggering economic shift of the country from a least
2023 roadmap and mid-term outlook
To provide buffer against the prevailing economic conditions as well as provide continuous support to SMEs, the
group has adopted pragmatic strategies:
Priority will be accorded to export clients along with non-traditional businesses as a pivotal contributor
of the economy, which will also ensure inflow of foreign currency
Conducive support will be extended to the manufacturing community who rely on locallyproduced raw material rather than imported items. This will reduce pressure on forex reserves as
well as support marginal producers
Continuation of COVID-19 stimulus package and initiation of recently proclaimed
central bank refinance scheme to support manufacturers
Support agricultural sector financing to related ventures under Bangladesh
Bank’s Agricultural & Rural Credit Policy and Program for FY2022-23
Constitute a special monitoring cell for enhanced portfolio
surveillance as well as to reduce NPL to acceptable levels
Implementation of cost saving measures in line
with central bank norms
Annual Report 2022
159
Our Foundations
The division’s strong affinity with customers and diverse range of financial solutions enabled all-round growth in key performance
metrics, as indicated below.
DIGITAL FINANCIAL SERVICES
Promoting digital banking through offering a variety of convenient financial services, such as payments,
savings, remittances, etc., in a simplified and accessible way!
Strategic intent
Adopt transformative initiatives that
contribute to enhancing digital financial
infrastructure within the Bank and the
larger ecosystem
Engage in policy environment advocacy
for facilitating digital finance in the
country
Build digital resilience
Gain a deeper understanding of the
barriers that inhibit digital financial
services
Foster customer-led innovation
Create a digital society by further
encouraging digital financial services
adoption
INTERNET BANKING (CITYTOUCH)
Operational update
inclusive product creation and innovation.
After the COVID-19 outbreak and the rising realisation of
the debilitating effects of a shift in user patterns and social
marginalisation, the necessity for digital technology to create
resilience and maximise potential has never been more
obvious and crucial.
In order to achieve our objective of expanding financial
inclusion through digital throughout Bangladesh, we have also
put tremendous effort in developing our pipeline of initiatives.
In this context, one of the most significant commercial
milestones of DFS is the digital financial app, Citytouch, that
has revolutionised digital banking in Bangladesh. Robust
customer habituation led to Citytouch witnessing virtually ~5x
growth in income and ~3.5x expansion in transactions over
the last three years in 2022.
At CBL’s Digital Financial Services (DFS) Department, together
with our partners, we advanced some major catalytic projects
to meet our strategic intent, including promoting digital
infrastructure, improving policy frameworks, and ensuring
Transaction Count
160
in million
5
8
16
2020
2021
2022
Annual Report 2022
Income
BDT in million
10
2020
20
47
2021
2022
Our Foundations
2023 roadmap
The evident progress that has been accomplished over the past indicates the capacity of digital financial solutions to scale
and intensify the transformative effect of the service. Under the larger backdrop of a Smart Bangladesh, Citytouch as a
digital financial platform will only grow in the future.
Our broad plan for the year 2023 is to:
Reposition the Citytouch brand with an integrated 3600 marketing campaign
Modernize the appearance and streamline the user journeys of the Citytouch app with a
comprehensive re-design to provide the finest digital experience to our customers
Develop an end-to-end digital banking experience for our customers by integrating
the account opening process into Citytouch through digital onboarding (e-KYC)
Introduce NFC-based offline payments using HCE (Host Card
Emulation) technology as the first solution of its type in Bangladesh
Launch virtual cards within the Citytouch app to provide our
customers a truly digital lifestyle experience
Incorporate more features and services to further the
expansion of all digital facets of the Bank
Annual Report 2022
161
DIGITAL PRODUCTS (NANO LOAN AND ISLAMIC DPS)
Operational update
At DFS, we also grew our presence in the asset-liability space by expanding our footprint into relevant digital domains. Towards
this extent, we forged a collaboration with the country’s premier mobile financial services (MFS) provider, bKash, to develop the
country’s first Digital Islamic Deposit product. Further, the Digital Nano Loan service that was introduced earlier also continued to
receive positive response from the market in 2022.
Some of the major landmarks of DFS are given hereunder:
Digital Islamic DPS successfully raised over BDT 25 mn via the
use of digital channels, namely bKash
Digital loan distribution surpassed BDT 1,000 mn
2023 roadmap
DFS’ unique market position and deep connect with current integration programs enable us to find attractive
opportunities for co-creation and co-operation to overcome hurdles and respond to fast changing country-level
and consumer demands.
Our broad plan for the year 2023 is to:
Offer digital financing solution to the MSME sector, thus opening up
significant revenue potential
Introduce more diversified lending products in the retail segment including salary
advance, Buy Now, Pay Later (BNPL), etc.
162
Annual Report 2022
Our Foundations
CITY AGENT BANKING
Bringing financial services right to people’s front doors!
Strategic intent
Financial
deepening and
inclusion
Building efficient
credit markets
Rebooting the
rural small
enterprise sector
Developing a
savings habit
Assessing funding
requirements
for economic
empowerment
Enabling economic
adaptation and
societal resilience
Review
City Agent Banking was conceived for achieving the goal of providing financial services to unbanked individuals and bringing them
into the organised banking umbrella. In this mission, City Agent Banking has already reached all districts and 66% of Upazillas in
Bangladesh that ensures last-mile banking services not only to encourage the rural masses to save, but also provide financial
assistance to small enterprises. We are excited about the prospects of this service and are focusing on expanding our presence to
rural and geographically dispersed segments of the society in order to meet their financial needs and expectations.
Operational Performance Review
690
2,92,319
5,039 mn
Total City Agent Banking Outlets
Total Customer Account
Total Customer Deposits
5,955 mn
6,851 mn
186
Total Remittance Disbursed
Total Loans Disbursed (Retail +SME)
Total Team Strength
65%
37%
37%
Rural Customers
Female Customers
Remittance Disbursment (PIN)
of Bank
Annual Report 2022
163
Operational update
Key trends
•
Disbursed loans of Tk. 6,850 mn, up 107% from the
previous year
•
Greater need of financial inclusion amongst the unbanked
and under-serviced population segments
•
Increased deposit to Tk. 1,240 mn, representing a 33%
growth vs. prior year
•
Basic digital transformation of small businesses
•
Acquired 61,355 new customer accounts comprising a
19% growth vs. prior year
•
Financial support to the rural people and entrepreneurs,
especially in light of the pandemic and other challenges
•
Development of more use cases for expanding service
basket to customers and ensuring improved viability of
channel partners
2023 roadmap
Ensure strategic expansion to cover all the business hubs of the country
Enable wider access to credit amongst small entrepreneurs throughout the country
Ensure channel vibrancy and viability through proper controls and incentives
Financial Update
Particulars
Total Deposit (in BDT mn)
Customers
Loan (in BDT mn)
164
Annual Report 2022
2022
2021
Growth
5,030
3,790
33%
292,319
245,579
19%
6,851
3,309
107%
Our Foundations
CARDS
Enabling a seamless, cashless, convenient, digital society!
Strategic intent
Grow the culture of secured
cards usage through
campaigns, customer and
merchant connect initiatives,
etc.
Enhance customer experience
through aspects such as
convenience, rewards,
payment options, etc.
Provide secure and innovative
digital financial solutions
Rejuvenate the e-comm
landscape by bringing back
consumer confidence through
trusted and certified payment
gateways
Offer self-service options
based on convenience and
simplicity
Promote Bangla QR to
provide additional acquisition
options for the Bank
Design multipurpose card
products and onboard
merchants for catering to all
kinds of consumer segments
Expand cards service
especially for Islamic
customer cardholders
Review
City Bank is a pioneering market leader in the Bangladeshi credit card sector and seeks to continuously implement the most
cutting-edge technical innovations. The fact that we have extensive relationships with all four operational network partners in the
Bangladesh market, namely AMEX, Visa, Mastercard and UnionPay International denotes our biggest asset and unique strength.
In addition, City Bank is the market leader in terms of both issuance and acquisition of cards.
Operational update
29%
50,000+
Country-wide credit card market share
Combined locations where City Bank cards
can be used
16%
17%
Credit card outstanding market share
Market share in acquiring industry
Annual Report 2022
165
The Cards Division of CBL continues to prioritise new technology
and becoming the market leader in terms of digitisation. As a
consequence of this perspective, we have begun to explore
diverse payment methods that will yield fruitful outcomes in
the future. We have also taken progressive steps to convert
the majority of our cards, including debit cards, to NFC or
Near Field Communication that enables secure short-range
connectivity, and plan to complete this transition in the near
future.
By virtue of a devoted and habituated client base, e-commerce
expenditure is on the rise again, and our cardholders have
engaged extensively in several campaigns throughout the year
that has further boosted card-based digital transactions. This
was the consequence of a focused branding and merchant
connect strategy coupled with intelligent offer placement.
Some of the significant events of the year are given below.
•
Visa Debit cardholders will be able to enjoy global usage
facility in the following year
•
In addition to the expansion of NFC feature in credit cards,
it was also launched in debit cards
•
Provided a more convenient payment option for customers
by introducing EMI for card cheques
•
Enhanced customer experience by introducing online
redemption option of membership rewards points
•
Bolstered customer engagement through participation in
international and domestic events, such as British Curry
Fest, FIFA World Cup, Oscar Nominated Movie Screenings,
etc.
•
Became a major participant in Bangladesh Bank-initiated
program “Digital Cow Haat” on Eid-ul-Adha
•
Launched MPGS (Mastercard Payment Gateway Services)
with Biman Bangladesh to provide a secure gateway for
online transactions
•
Introduced new MFS partnership with upay and TAP to
facilitate fund transfer
Key trends
•
Rising propensity of cards ownership amongst qualified
financial services consumers due to recognition of its
convenience
•
Shift in perception of cards from a luxury to a necessity
•
Quicker cards issuance for eligible customers, thus driving
convenience in the application process
•
Greater proclivity amongst merchants to encourage
customer cards usage
•
Rising acceptance of co-branded cards
Financial update
2022
2021
2020
2019
2018
Total card billing (mn)
Metric
167,710
137,270
98,500
101,760
76,650
Acquired amount (mn)
67,472
62,980
46,910
52,420
49,260
Credit card outstanding (mn)
13,010
11,950
11,111
10,010
8,390
Credit cards issued
614,386
554,371
491,937
448,071
390,651
2023 roadmap
•
•
Expand our card portfolio to include new products aimed at
promoting everyday spending, thus enhancing customer
loyalty
the youth, Islamic customers, women, and other relevant/
Mid-term strategy (2-3 years)
underserved target segments
•
Design credit scoring framework based on overall spending
patterns
•
Create single asset-liability product embedded with
modern technology
•
Establish campaign management tool for further driving
operational efficiency
Revamp and re-energise the value proposition of our
existing card portfolio
•
Increase investment in the advanced digitisation of cards
•
Employ MR points as a more alluring instrument for
166
Annual Report 2022
Our Foundations
TRADE SERVICES DIVISION
Accomplishing a record-breaking year through focused contributions to fostering international trade
services and enhancing Bangladesh’s competitiveness in the global arena!
Strategic intent
Harness business dynamics to create
opportunity to serve customers and
deliver beneficial outcomes
Remain the partner-of-choice for all our
internal and external customers through
not only trade business, but also valueadded trade solutions
Focus on new technology and
digitisation as a smart trade banker
Emphasise on premium customer
services to ensure a positive impact on
earnings
Diversify the product basket with new
and more relevant offerings
Advance automation for regulatory
reporting and increased compliance
Review
City Bank Trade Services Division (TSD) plays a vital role
in international trade and commerce. As the country’s
preeminent trade specialists, we understand the dynamics
of the global business environment and leverage our financial
resources, deep technology, and global correspondent banking
network to bolster and build strong local and international
trade businesses. This is not only reflected in the consistent
growth of our international trade business, but also has a
favourable impact on the balance of payments or the current
account situation of the country, which is a key headline
economic indicator.
Operational update
After successfully completing Trade Business Centralisation of
the Dhaka and Chittagong regions in 2008, City Bank obtained
ISO accreditation for its international standard trade practices
and procedures in 2012. The Bank’s trade business (TSD) is
managed by a team of motivated, skilled, knowledgeable
and highly professional individuals who hold international
certifications with years of rich experience.
International certifications held by our professionals
Certification
Nos.
CDCS
30
CTFP
9
CSDG
1
CETS
1
CAMS
2
FIT
1
Total
44
Despite the challenges of year 2022 that marked the
commencement and intensification of the Russia-Ukraine war
that triggered a cascading economic spiral on the rest of the
world including Bangladesh, City Bank’s TSD was able to spot
smart/opportunistic trading windows and continue with its
business momentum, thus achieving a record-breaking year,
as reflected in the divisional performance below.
Annual Report 2022
167
This performance was also made possible through our
concerted and future-focused strategies, longstanding
experience in trade facilitation, tech-driven mindset, and strong
commercial ties with national/international corporations and
multilateral organisations, such as IFC, ADB and FMO.
Key business performance indicators
Total business (US$ mn)
Metric
2022
2021
2020
2019
2018
Import
4,133
3,978
2,148
2,345
2,078
Export
2,817
2,214
1,432
1,600
1,424
270
377
110
238
96
7,220
6,569
3,690
4,183
3,598
Guarantees
Total
Segment-wise breakup, 2022 (US$ mn)
Segment
Import volumes
Export volumes
Guarantee volumes
3,326
2,519
182
Commercial
576
228
35
SME (M)
231
70
53
4,133
2,817
270
Corporate
Total
44
674.23
288.79
Professionals in the team with
international certifications
Highest-ever monthly import
volumes achieved in January
2022 (US$ mn)
Highest-ever monthly export
volumes achieved in June 2022
(US$ mn)
7,220
11%
Highest-ever overall volumes
achieved, 2022 (US$ mn)
YoY growth in overall volumes
achieved, 2022
Key trends
•
Key opportunities in trade despite challenges due to
established integration of Bangladesh with the global
economy
•
China + 1 diversification strategy of global corporations
will continue to shine a spotlight on Bangladesh for its
intrinsic trade, labour and cost advantages
Economic recovery derailed to some extent by global
headwinds, including the war in Europe
•
•
Strong domestic consumption propping economic growth
168
Annual Report 2022
Our Foundations
2023 roadmap
A key mandate of the TSD is to continue with the business momentum and achieve higher income growth. The big picture
in front of us is to assist Bangladesh’s recovery in external trade, which is vital for spurring GDP growth and achieve the
government’s targets in capex, budgetary allocations, public welfare, etc.
One of our major expectations of the year 2023 is to introduce a cutting-edge Trade Business Software, which will fully
digitise our back office and the customer-facing front-end, thus enabling the business to reach out to new customers,
enhance operational efficiency, cut costs and reduce turnaround time, thus further facilitating our customers.
Some of the other key action points comprise:
Focus on export growth of our customers through value-added services and alternative solutions
Introduce customised trade module software to enhance automation, digital trade and straightthrough processing and reduce paper-intensive trade
Product diversification through introduction of export bill securitisation and factoring
Concentrate on Islamic trade in which we perceive a huge opportunity
Provide services in supply chain businesses of the RMG sector
Expansion in the export-oriented medium business sector
Annual Report 2022
169
OPERATIONS
Committed to specialist operations through innovation, efficiency and digitization
Strategic intent
differentiator.
•
Do “more with less” without any operational compromise.
In addition, the division guarantees comprehensive alignment
•
Ensure seamless, uninterrupted, reliable and dependable
for which it has many specific arms that assure the Bank’s core
operational services.
•
objectives are met through the deployment of streamlined
Assure compliance and conformance with all statutory
norms and regulations.
•
and digitised processes.
The Operations teams re-strategised in 2022 to fit with
Pioneer digitisation and ensure constant alignment with
technological upgrades for enhanced cost savings and
enhanced operational efficiency.
•
with regulatory norms for ensuring responsible stewardship,
the ever-growing banking transaction volumes and new
compliance requirements. As a result of the Bank’s adoption
of new digital products and solutions, it became imperative for
the team to realign the onward support teams to be nimble,
Ensure sufficient capacity and wherewithal to handle the Bank’s
agile and efficient in order to meet the increased volumes.
growing transaction volumes, including any volume surge.
As a result, a few departments, including Service Delivery,
Review
Operation Project and Support Division, and Clearing
The ISO 9001:2015-accredited Operations Division of City
Liability Service Center (LSC), Operational Compliance and
Bank is charged for delivering a great customer experience
Bond Management (OCBM), and Payment Service Department
across all of the Bank’s interfaces and touchpoints. This
(including Clearing & Cash Management Operations). This was
is essential to ensure that the Bank can deliver superior
done to ensure a better reflection of divisional name with
customer service as a competitive advantage and hence a key
evolved activities and objectives.
Department were restructured with a new dimension as
Subdivisions of Operations
Liability Service
Centre
Branch Operations
Payment Service
Center (PSC)
Liability Service Centre
Update
Liability Service Centre (LSC), previously known as Service
Delivery, commenced its journey from January 2022. LSC is
one of the key support units for Branch Banking and all other
business wings of City Bank.
170
Annual Report 2022
Treasury Operations
Operations
Compliance & Bond
Management (OCBM)
LSC initiated cross-departmental services by developing two
new wings:
•
Agent Banking Service
•
CSU (Central Support Unit) Services
This was implemented in order to manage rising transaction
volumes, improve customer satisfaction, and ensure improved
Branch Operations
Operational progress, 2022
Branch Operations Managers (BOM) are accountable for
Islamic DPS with bKash
BAMLCO.
Update
maintaining compliance at the Branch-level and serve as
City Bank has always been a digitalization pioneer. In a
manifestation of this, the Bank implemented Islamic DPS for
bKash customers in 2022. Users of bKash can now access
DPS through the bKash app without having to visit any branch
for opening any other account in the Bank.
STP Award
BOMs serve as the Anti-Money-Laundering Compliance
Officer of a Branch and thus as a shadow risk manager. The
rigor of BOM’s screening procedure has enabled it to contribute
to significant enhancement of operational efficiency and
optimisation of expenses, while bringing forth superior credit
risk management capabilities.
Citibank N.A. presented us with the prestigious “Straight
Through Processing Excellence Award” for attaining the
highest level of precision in remittance payments made via our
account with them. City Bank’s 99.3 percent accuracy is the
best among all Bangladeshi banks that transmit remittance
payments through Citibank N.A.
Operational progress, 2022
2023 roadmap
requirements.
Introduce a digital onboarding (DOB) platform which will help
in both self and assisted onboarding of customers digitally.
Through the DOB platform, our sales team or branch employees
can seamlessly assist customers to open an account with NID
without any hard copy document requirement, such as the
account opening form.
Audit rating
Compliance for Islamic Banking
One of the most important process control initiatives of
the year was the establishment of transaction monitoring
for Islamic accounts in accordance with the new AML
In the spirit of accomplishing continuous improvement, in
2022, audit rating was published for 132 branches and all
received “Satisfactory” audit rating for the second consecutive
year, with 5 branches achieving a “Strong” rating.
2023 roadmap
Achieve “Satisfactory” audit rating for 133 Branches, 7 Citygem Centers and
19 Sub-branches, along with 8 “Strong” audit-rated Branches
Introduce and adopt new AML software to uphold AML activities for ensuring
superior risk control
Implement central monitoring unit for Agent Banking
Build a robust sub-branch monitoring wing for new sub-branches
Annual Report 2022
171
Our Foundations
management of business lines, etc. LSC handles the opening,
maintenance and closing of liability accounts, as well as all
international remittance-related operations.
Payment Service Center (PSC)
Cash Management Operations
Update
Payment Service Center is bifurcated into two units:
Cash Management Operations (CMO) group works as a central
processing center for bulk transactions of various wings of the
Bank, especially operations of the cash management business.
•
Central Clearing Unit (CCU)
Operational progress, 2022
•
Cash Management Operations (CMO)
•
Implementation of foreign currency payments via RTGS
system in accordance with regulatory requirements
•
Accomplished automation in the reconciliation procedure
for BEFTN (inward & outward), RTGS (inward & outward)
and A-Challan payments, as part of the Digital Steering
Committee (DSC) Programme
•
Included several new features in City Live as part of the
broader upgradation work on our major Corporate Internet
Banking Solution, including:
Central Clearing Unit
Since October 2010, City Bank’s Central Clearing Unit (CCU) has
performed image-based transactions in BACH (Bangladesh
Automated Clearing House).
In 2022, we altered several process flows by conducting
outward clearance through 128 Branches, thus ensuring
resource-efficient operations. In addition, we upgraded
our comprehensive digital SMS and IVR infrastructure and
established a fully equipped contact center in order to gather
Positive Pay confirmation from our customers.
•
Bulk bKash wallet payment
•
VAT payment service within the application
Treasury Operations
Update
Treasury Operations assumes the back-office responsibilities of the Bank’s Treasury, assuring compliance and smooth settlement
of all transactions. The critical functional areas of Treasury Operations are:
Foreign currency
deal settlement
(FX)
Money market deal
settlement (MM)
Fixed income
securities
Capital market
investment
settlement
OBU fund
management
Customer Treasury
Bond portfolio
management
Operational progress, 2022
of strong capabilities of the Bank amongst foreign lenders.
In 2022, Treasury Operations settled 3,940 MM deals with
The Bank also witnessed a considerable 400% growth in
customers for Treasury Bond Portfolio Management, which
has been well-managed by Treasury Operations.
an average of BDT 13,000 mn and also settled 4,734 FX
deals totalling USD 50 mn on average, daily. The team also
maintained a healthy portfolio of government securities for
BDT 45,000 mn. Besides, booking facilitation of foreign loan in
OBU and execution of timely payments ensured demonstration
172
Annual Report 2022
The Bank also directly participated in the first-ever bond trading
in Bangladesh through the Financial Market Infrastructure
(FMI) system, launched by Bangladesh Bank.
Update
The Operational Compliance & Bond Management team is
responsible for monitoring procedures through investigating
abnormalities.
In addition to guaranteeing service quality and ISO-level
compliance, it is also responsible for executing thorough
client due diligence during the onboarding process for digitally
sourced accounts. Further, the team also provides efficient
service for government Sanchaypatra and bonds, as well
as regulatory account-related inquiries. Additionally, it also
ensures insurance coverage of the Bank’s cash and fixed
assets, as well as insurance-related products.
Operational progress, 2022
Business Continuity Plan (BCP) Drill 2022 for 26 departments,
including Operations, Support, and Business Functions were
successfully completed in an alternate convenient location.
For the first time ever, 100% departments covered by the BCP
took part in the exercise.
2023 roadmap
Although bancassurance is still a novel concept in Bangladesh,
City Bank intends to give its clients the convenience of
insurance products while providing a greater degree of
customer protection and lowering delivery costs relative to
the conventional approach.
cover the lifecycle of a customer. City Bank is a pioneer in
the Cards sector through its longstanding association with
American Express (AMEX), being the sole designated acquirer
and issuer of AMEX cards in Bangladesh.
Further, the Bank is amongst the few financial institutions in
Bangladesh to issue cards via its captive card management
system and processes card transactions through a wide range
of terminals, in collaboration with AMEX, VISA, China Union
Pay and MasterCard.
Operational progress, 2022
Credit card onboarding process reengineering
In order to shorten the processing time of a card application,
we have devised a method to extract all available data from
the Lotus application, which is then dispatched to the card
system for card creation, resulting in a five-minute savings
per credit card file.
Ababil merchant payment automation
A new program was developed to ensure that Ababil’s
merchant account’s client get paid automatically and without
any human intervention.
2023 roadmap
Plastic-less Priority Pass
Card Operations
Priority Pass is a privileged service enjoyed by platinum and
gold credit card members who need to carry a separate plastic
along with the credit card, which is inconvenient. In this regard,
we will incorporate the features of a Priority Pass to the credit
card itself, while discontinuing the issue of Priority Pass.
Update
Archiving vouchers and supporting documents digitally
The Card Operations team strives to offer the best solutions to
customers through the deployment of innovative technology.
The team works as a back office of the Card’s business to
ensure process efficiency and service excellence.
Earlier, the team printed daily vouchers and other documents
to maintain and archive activity records, resulting in significant
paper consumption and expenses. To reduce these costs and
promote a paperless operation, we will implement archiving all
the documents digitally on a single platform.
Cards, by their inherent nature, are a technical product and
Annual Report 2022
173
Our Foundations
Operations Compliance & Bond Management
(OCBM)
MONEY LAUNDERING & TERRORIST
FINANCING PREVENTION
Defending the Bank against unauthorized transactions and intruders
Strategic intent
Remain vigilant to
safeguard the bank
and the wider financial
system from ML/TF
risk activities
Safeguard CBL’s
operations against
any illicit financial
transactions
Review
Money laundering (ML) and terrorist financing (TF) may both
endanger the integrity and stability of a financial system. To
ensure financial system stability and risk protection, CBL’s Money
Laundering & Terrorist Financing Prevention Division has been
working ceaselessly to combat money laundering and terrorist
financing by ensuring sound regulatory compliance in accordance
with BFIU (Bangladesh Financial Intelligence Unit) directives.
As a responsible public-facing financial institution, CBL is
resolved to achieve the highest standards of compliance in
anti-money laundering and combating financing of terrorism
(AML/CFT), especially considering the country’s susceptibility
to these threats. To ensure stability and protect the financial
system from risk, the Bank’s Money Laundering & Terrorist
Financing Prevention Division has made steadfast efforts to
combat ML and TF by ensuring sound monitoring and proper
regulatory reporting and compliance in accordance with BFIU
and other regulatory guidelines.
Our Bank is dedicated to adhering to Money Laundering
Prevention
Act
2012
(Amendment-2015),
Money
Laundering Prevention Rules 2019, Anti-Terrorism Act 2009
(Amendment-2012 & 2013), Anti-Terrorism Rules 2013,
BFIU circulars and instructions, and other relevant local
and international legislation. Our AML/CFT policy outlines
our senior management’s role in anti-money laundering
174
Annual Report 2022
Protect the Bank
against loss of
credibility/reputation
in regards of ML/TF
Ensure full ML/TF
compliance with
all regulations and
regulatory updates
compliance and awareness-building about the necessity of
implementing anti-money laundering strategy at all levels of
the organisation.
Operational update
Increasing the efficacy of our anti-AML/CFT internal
controls is a top priority of CBL and, in this regard, one of our
compliance architecture’s most crucial pillar is the Bank’s
senior management whose involvement and commitment
to preventing ML and TF has ensured the Bank’s operations
remain seamless and uninterrupted, while also ensuring
reputational credibility.
As part of the Bank’s AML/CFT strategy, the Managing
Director & CEO sets the tone from the top by despatching a
special memo to all staff at the start of each year, outlining
the way ahead for the next year and sharing the steps taken
during the prior year to fight ML and TF.
Further, with the importance of AML/CFT cascading down,
we emphasise every employee’s accountability to protect
the Bank against any financial abuse. We explain to them the
consequences of non-compliance with applicable laws and
the Bank’s own policy, including criminal, civil, and disciplinary
action, as well as reputation loss, which could result from any
link with ML and TF activity.
In accordance with regulatory guidelines, the Bank has
•
Implementing central monitoring to boost AML/CFT
compliance
•
Ensured rigorous training for branch officials on internal
AML/CFT compliance requirements
In addition, a Deputy CAMLCO role reinforces this degree of
surveillance with the appointed employee entrusted with
ensuring unbending compliance with AML/CFT. Furthermore,
each branch has a compliance officer (Branch Anti-Money
Laundering Compliance Officer-BAMLCO) who implements all
associated instructions for AML/CFT. Furthermore, the Bank
has key individuals in main divisions who can detect any kind
of risk-prone activity and forewarn corresponding divisions of
important concerns.
•
Providing training to Agent Banking partners
•
Increasing branch/department visits as well as organising
awareness sessions
•
In recent years, organised financial crime has only
compounded as law enforcement remains unsuccessful in
timely prevention or pre-emption
In 2022, given the increasing threat perceptions, we
implemented a variety of efforts to strengthen AML/CFT,
including:
•
A significant negative impact of an attack on the financial
system may spawn a contagion effect, compromising
the whole system’s stability and integrity, thus requiring
advanced software and tech tools for round-the-clock
monitoring
•
Examining current policies on AML/CTF risk
Key trends
2023 roadmap
Reinforce our efforts by implementing a step-change programme of adopting an integrated AML/CFT software
that shall provide us with additional tools to combat AML/CFT. The programme shall also allow us to improve
surveillance and respond to any threats in a more coordinated way, thus establishing an industry gold standard in
combating ML/TF
Successfully implement the regulator’s instructions and continue our ongoing Bank-wide
awareness programme
Improve regulatory audit rating and secure a position amongst the top listed banks in
terms of regulatory audit rating
Annual Report 2022
175
Our Foundations
established an independent Money Laundering and Terrorist
Financing Prevention Division (ML & TFPD) and a Central
Compliance Committee (CCC), led by our Chief Anti-Money
Laundering Compliance Officer (CAMLCO), to enforce ML and TF
prevention strategy and activities across all areas of the Bank.
CREDIT RISK MANAGEMENT
Setting the Bank’s framework and approach to credit risk and ensuring operational continuity against the
evolving challenges!
Strategic intent
Assuring systematic
approach to credit risk
minimisation for ensuring
seamless operations
Meeting regulatory
requirements for credit risk
while ensuring sound credit
risk governance
Consolidating information scattered
across the Bank’s various departments
for enabling more informed decisionmaking
Engaging in credit risk
modelling for future-proofing
the business
Facilitating the Bank to improve its
overall performance and helping secure
a competitive edge
Review
Amidst the current Russia-Ukraine conflict, which has led to a
volatile and unpredictable global and local economic climate,
credit risk is one of the most important concerns of financial
institutions.
Preparing the Bank to absorb
any higher capital costs for
credit risk
Fostering Bank-wide best practices in
credit risk management
In this context, the Credit Risk Management (CRM) Department
of City Bank is assuring sustainable credit growth, maintaining
high-quality surveillance to prevent slippages, and taking
proactive steps in response to early warning signs.
With investment being impeded in the post-COVID scenario
(that had witnessed initial tailwinds) due to an inflationary
and disrupted economic environment, the prospect of
non-performing loans (NPLs) continues to be a significant
component of credit risk. Furthermore, during the peak
COVID pandemic, the payment relaxation or moratorium
policies designed to prevent economic stagnation are evolving
concurrently and default risks persist.
Thus, in the context of customer onboarding, which is the
origination of any future credit risk challenge, CRM accords
due consideration to analysing the customer’s financial health
in order to appraise creditworthiness in the underwriting
process, as well as to scrutinise relevant market and industry
risks and other environmental and social factors associated
with the customer’s loan application. This approach aids in
addressing all probable risks that may arise throughout the
onboarding process and progressively across the lifecycle of
the loan.
Amid an upward trend in credit demand in Bangladesh in the
post-COVID era, the liquidity strain in the banking sector is also
on the rise, and it is now more important than ever to acquire
borrowers with strong credit profile to be able to maintain
asset quality and income stream.
The Board of Directors of City Bank acts as the Bank’s
final authority vested with the decision-making power of
sanctioning/non-sanctioning loans. The Board has further
assigned credit approval authority to the Managing Director &
CEO, who has the discretion to further delegate it to officials
176
Annual Report 2022
and domain expertise.
To support the management in the credit underwriting and
loan sanctioning process, the Board has charted the Bank’s
credit framework in a comprehensive way, upon which the
CRM, in conjunction with other stakeholders of the Bank, has
created a well-documented Credit Risk Management Policy
(CRMP) outlining the fundamental principles for recognising,
assessing, authorising, and managing credit risk.
Credit Risk Management Process at City Bank
Operational update
As a division, CRM is committed to deploying holistic risk-mitigation approaches in all of its operating areas and proliferating the
right risk strategy among stakeholders. We achieve this through the following:
IDENTIFY
VALIDATE
ASSESS
Issues that have the potential to
impact our earnings sustainability
and create, preserve or erode value
for our stakeholders
The material matters to inform our
strategy and targets
Our underwriting norms, practices
and strategy remain synced and
relevant with the times.
Creating a risk-safe organisation
When a business line acquires a new customer, under the
mandate of the CRM, they are required to examine more than
just the prospective income stream. They are also tasked to
evaluate the borrower from a holistic risk perspective. Thus,
in order to encourage these practices, risk detection and
mitigation has been incorporated as a KPI metric for all loan
officers.
Similarly, CRM assures the adoption of credit risk appraisal
methodology with the aid of its dynamic policies, which includes
the CRM Policy to steward the whole credit procedure. CRM
has also constituted a Credit Risk Management Committee
consisting of members from the departments of business,
risk, finance, and recovery in order to examine the Bank’s
portfolio strategy and assure the quality of assets.
This committee handles large loan, rescheduling, and also
major credit decisions. Moreover, our Deteriorating Credit
Monitoring Team (DCMT) anticipates and assists the mitigation
of unanticipated losses by monitoring the movement of a
PRIORITISE
Managing NPL at an
acceptable range and
nurturing stressed portfolio
while onboarding potential
business to ensure
sustainable growth.
portfolio that is likely to be stressed and could be categorised
as a probable “default” loan.
Providing assurance through multilayer risk safeguards
Our credit risk framework encourages explicit accountability
and promotes clearly defined roles for risk management via
the three lines of defense concept.
The business lines engaged in revenue-generating activities are
the first line of defense and are responsible for implementing
risk management via their daily operations. CRM itself serves
a vital role as the second line of defense, providing the rules,
structure, and management strategies necessary to mitigate
risk and assure the first line’s compliance. The Internal Control
and Compliance Division (ICCD) provides the third line of
defense; its duty is to provide independent assurance that
the first two lines are running efficiently and in accordance
with the governing body’s internal policies and statutory laws,
while also advising on improvement plans.
Bolstering our underwriting operations with due diligence
stringency
Annual Report 2022
177
Our Foundations
of CRM based on their credit evaluation abilities, experience,
CRM seeks to grow with customer requirements and the idea
is not to look at a loan request from a point of view of doubt,
but of confidence of full recovery of principal and interest and
even relationship extension into other products. Our sense of
conviction in the loan request is also supported by our cuttingedge technology and processes that provide an additional layer
of assurance. This overall process has led to the adoption of a
user-friendly credit analysis framework that helps to analyse
and accommodate the demands of existing and prospective
borrowers without compromising on our credit judgment.
This is reflected in CBL’s NPL rate of 3.9 percent in 2022, vs.
the industry average of 9.36 percent (till September 2022).
This is the outcome of careful risk assessment, vigilant postdisbursement credit monitoring, and rigorous adherence to
the credit risk management framework.
Furthermore, the Bank’s NPL declined from 4.86 percent in the
prior year, displaying a downward trend even as the industry’s
average NPL rose between the 2021 and 2022 periods.
CBL vs. Industry NPL %
Specialist in CRM
CRM’s Project Inspection & Assessment Department (PIAD) is
comprised of a seasoned group of experts with professional
experience in examining the viability, value, and performance
requirements of projects. In order to provide a more accurate
appraisal and assessment of the borrower’s loan file, PIAD
demonstrates compliance monitoring and technical feasibility
in its overall assessment. In addition, the department’s stock
inspection team provides an additional layer of credit prudence
through evaluating the stock situation of borrowers.
Sustainable finance and green banking
Providing traditional banking products to businesses with
solid credit history has proven to be effective, yet we strive
to go above and beyond to serve customers who are socially
responsible and have a development philosophy that takes
cognisance of the ecology and is environmentally-friendly.
CBL’s CRM endeavours to promote credit growth that is both
sustainable and beneficial to society as a whole and this is
achieved through its focus on sustainable finance and green
banking.
2022 reportables
Industry
8.12
4.86
CBL
9.36
2021
3.90
2022
2023 and short-term roadmap
New policy implementation and updation
CBL’s CRM plays a crucial role in the effort to establish stronger
levels of risk governance, accountability and transparency,
stewarded by the central bank’s consistent approach in
implementing sound policy strategies to support good
borrowers and reduce the default rate.
Thus, CRM has been establishing and implementing
regulatory policies that are acknowledged and adopted by the
entire organisation in order to serve all customer segments
in a streamlined and effective manner. In addition, the Credit
Although the year 2022 continued to remain challenging on
account of the aftershocks of the pandemic and major domestic
challenges, CRM worked cohesively and collaboratively to
achieve the Bank’s short-term and mid-term goals and was
prudent in maintaining asset quality and portfolio integrity, in
line with the strategic intent.
Policy Manual (CPM) was overhauled and renamed Credit Risk
Truly, the capacity of CRM to monitor and manage the Bank’s
NPLs at a low level despite the extraneous challenges and
competitive pressures reflect its core strength. The Bank
has a demonstrated track record of consistently maintaining
asset quality that is much better than that of the majority of
competitor banks.
limits across the credit portfolio. In accordance with regulatory
178
Annual Report 2022
Management Policy (CRMP) with the intent of continuously
updating the Bank’s policy in response to changes in the
regulatory environment and business dynamics.
The policy updation reflected integration of the credit policy
with the risk appetite framework, while setting concentration
updates, CRM also developed and implemented a rescheduled
accounts policy and interest waiver policy of the Bank. We
have held the belief that the right policies can enhance
competitiveness, mitigate economic shocks, and expand
access to capital required to stimulate credit-related growth.
As CRM continually strives for excellence, the team
implemented a covenant tracking system to ensure proper
follow-up on compliance and fulfillment of the approved
covenants and to reduce credit risk. The tracker will aid internal
teams to remain more vigilant and steadfast with respect to
covenant monitoring, which will ultimately help in preserving
asset quality and enhancing credit due diligence.
Cross-functional training and development
CRM has facilitated multiple training sessions and workshops
for cross-functional teams to equip them with the necessary
skills to identify creditworthy borrowers, including training on
conducting quantitative and qualitative analyses of industrial
customers, identifying good borrowers, and utilising credit risk
analysis tools for verification. These provide the knowledge
necessary to evaluate borrowers in order to expand the Bank's
loan book in a sustainable way.
Intellectual capital enrichment
Cross-departmental knowledge sharing and enrichment of
employees' overall knowledge of the Bank has always been
a top priority. Keeping this in mind, CRM provides a monthly
commodity price bulletin to the Bank's internal stakeholders,
facilitating them to analyse market information at regular
periodicity and act strategically by limiting the underlying
risk of volatile commodity markets in order to maximize riskreturn trade-off.
Given that Bangladesh is an import-dependent nation and
that banks offer cross-border trade services to importers,
it is essential for market participants to monitor market
developments, including price changes. CRM intends to take
additional measures to update stakeholders on the economic
outlook on a regular basis.
Stress account management
CRM plays a crucial role in the effective management of the
stressed accounts pool through early detection of classified
loans and via sound credit judgment. The department has
also developed a methodology for identifying and categorising
stress portfolios, as well as maintaining a sound strategy for
each account to improve the monitoring of the credit portfolio.
DCMT’s (Deteriorating Credit Monitoring Team’s) meeting
agendas now include SMA (Special Mention Accounts) loan
monitoring, rescheduled loan monitoring, and documentation
deferral monitoring to augment vigilance on the portfolio.
Personnel capacity development
To adapt to the most updated policies and practices in a
dynamic financial services industry, CBL’s CRM invests
heavily in its human resources. In addition to participating
in various in-house and inter-departmental trainings and
workshops, a number of risk managers have been encouraged
to obtain professional certification annually from prestigious
institutions, such as BIBM, Moody's, etc. This not only
increases the knowledge base of certified professionals,
but also facilitates the dissemination of knowledge to other
resources through knowledge-sharing.
Thus at CRM, we believe that our robust risk management
culture, supported by prudent underwriting standards,
policies, and seasoned professionals, will guarantee a highquality portfolio for the Bank in the present and the future.
Annual Report 2022
179
Our Foundations
Standardisation of credit monitoring process
RISK MANAGEMENT DIVISION
Responsible risk stewardship and governance
At City Bank, a strong risk culture is a vital part of our strategic approach to risk management. The Bank believes that a sound risk
culture, where every employee is fully aware of his or her responsibility regarding risk management, promotes prudent risk-taking
and paves the path for risks to be detected, assessed, reported and addressed in a timely and complete manner. This comprised
the heart of RMD’s risk governance and stewardship efforts in the year 2022.
City Bank’s Risk Management Division (RMD) was instituted more than a decade ago to demonstrate the Bank’s commitment
to prudent risk management and control. Over the years, the Bank has gone above and beyond in establishing a sound risk
management framework and has persisted in fostering a “risk aware” culture at all times throughout the institution.
Resolutions
Board's
Risk Mgt.
Committee
Queries
RMD
Ensuring Smooth Information Flow
RMD
Feedbacks
10
Suggestions
Follow Ups
Executive
Risk Mgt.
Committee
Execution Status
Meetings Coordinated & Presented At
12
Resolutions Communicated & Followed Up Consistently
RMD serves a crucial role in arranging bridge for the Bank’s two
most significant risk platforms at the Board and management
levels: the Board’s Risk Management Committee (BRMC)
and the Executive Risk Management Committee (ERMC). The
undertaking also entails vigilant assessment of the Bank’s
internal and external risk environment, reporting of the Bank’s
prevalent risk stewardship strategies, collaborating with the
relevant responsibility centres to conduct root-cause analysis
on risk issues, and formulation of mitigation actions for
consideration by the committees, as well as monitoring the
implementation of action plans and recommendations of the
BRMC and ERMC.
The BRMC has established a vision for the Bank’s risk
management approach with clear, quantifiable and time-bound
objectives in key areas that eventually exhibit convergence in
the performance of the Bank’s risk management agendas.
These critical categories included thorough asset quality
monitoring, concerted surveillance efforts in degraded
portfolio management, sound management of portfolio under
special facilities, recovery and ongoing legal case settlement,
capital sufficiency, cybersecurity, and dedication to risk
180
Annual Report 2022
sustainability, among others.
RMD works with stakeholders to keep them engaged in ensuring
that the BRMC’s key performance indicators are fulfilled. It also
monitors the Bank’s portfolio and its transitions throughout the
year for detecting any early warning signals and taking prompt
corrective action accordingly.
The ERMC contains the convergence platform for enterprisewide risk operations, and it directs and monitors risk
management actions at a reasonably granular level and with
greater periodicity. The committee meets regularly to review
monthly risk management reporting metrics encompassing
credit, market and liquidity risks, operational risks, profitability,
compliance and other factors. In addition to its own
recommendations, it also monitors the implementation of
BRMC’s recommendations. In addition, the committee further
examines the Bank’s adherence to the Board’s risk appetite. The
division of risk management collects, processes and provides all
information to enable these ERMC functions.
Under the responsible direction of the Board, the Board’s Risk
Management Committee and the Executive Risk Management
to the geopolitical situation and also the fact that Bangladesh is
an export-dependent economy with close value chain integration
to global supply chains and hence any negative events globally
would impact the economic situation of the country.
As part of our bolstered efforts in credit risk strategy that has
transformed credit risk management, City Bank’s RMD takes a
view of the credit risk cycle, the customer and the portfolio, in
order to identify, analyse, control and decide on credit risk on
portfolio basis.
While the war cast uncertainty and slowed economic activity,
our credit portfolio continued to grow sustainably, led by our
retail and corporate banking divisions, together with our ability
to launch exciting and relevant products and financial solutions,
especially in the digital banking space. During this time, credit
quality and delinquency indicators remained stable, attesting to
the Bank’s credit screening and collections strategy.
This approach facilitates active and effective portfolio
management, bolstering our control environment and our
ability to anticipate and handle uncertainty caused by complex,
unforeseen events (like the COVID-19 crisis or the war in
Ukraine), and to build resilience and adapt to new environments.
Review of year 2022
2022 was a year marred by inflation compounded by great
uncertainty caused by the war in Ukraine. Thus, City Bank’s
performance was affected by external factors and, to this
extent, the Bank’s RMD had to make risk control more forwardlooking to be ready for future shifts.
Successive disruptions in the global economy from the
pandemic and now the war in Europe have put unprecedented
emphasis on Bank’s need for developing well-structured
recovery roadmaps to withstand any further crises. In this
regard, City Bank’s RMD spearheaded the development of this
recovery plan which involved trigger events identification, early
warning algorithms development, and aligning action plans to
be implemented in different trigger scenarios.
RMD continues to partner with IFC in transforming the Bank’s
Operational Risk Management infrastructure. In this process,
the Bank’s operational risk framework, explicit roles and
responsibilities of Three Lines of Defence (3LoDs), and key
ORM tools, such as Risk Control Self-Assessment (RCSA), KRI
(Key Risk Indicator) and Incident & Loss Data Management are
being bolstered to ensure that the Bank is able to adopt a more
diverse strategy to tackle operational risk, which was precisely
what was accomplished in the year 2022.
A more granular evaluation of the year is presented below.
The global economy in the first quarter of 2022 saw the beginning
of special operations by Russia in Ukraine. Despite not having a
presence or any direct exposure in Russia or Ukraine, the Bank’s
RMD under close supervision of Chief Risk Officer tightened
monitoring of all risks, with particular attention to credit risk due
In the second quarter of 2022, RMD continued to follow
geopolitics closely, to monitor key indicators and customers
affected by the rising prices of energy, oil and other essential
commodities. Wholesale and corporate banking activity was
moderate, but retail banking activity persisted in the growth
path. Positive performance across divisions, helped by strong
loan recovery efforts, set NPLs back on a downward trend.
In the third quarter of 2022, the war in Ukraine continued to
be more entrenched and make waves in the global economy,
and the higher energy and commodity prices and interest
rates prompted the RMD run different scenarios and engage
in impact analysis to identify the most affected customers and
their possible impact on the Bank. Credit portfolio growth was
boosted evenly by retail, corporates and large corporates. Our
NPL ratio also remained stable.
In the last quarter of the year in review, the economy continued
to present an inflationary scenario, although economic activity
is proving more resilient than expected. The Bank’s RMD
continued to closely monitor economic effects from the war
in Ukraine in order to take preventive action. The NPL ratio
remained stable, driven by good performance of our portfolios
across divisions.
Outlook, 2023 and beyond
In late 2022, Bangladesh was able to successfully garner a US$
4.5 bn loan as a support package from the IMF (International
Monetary Fund) to prop the economy and ensure continued
funds availability to the critical sectors. Thus, coupled with its
own resilience, Bangladesh is on a much better footing than
some of the other neighbouring economies.
In the current year and beyond, RMD will continue sharpening
its risk control and stewardship standards, enabling the Bank
to adapt to any economic conditions and remain on the path of
sustainable value creation for all stakeholders.
Annual Report 2022
181
Our Foundations
Committee, RMD works ceaselessly to improve its effectiveness
in informing decision-makers about risk governance,
stewardship and management in order to diversify the Bank’s
risk exposures and ensure consistent risk-mitigated outcomes.
SPECIAL ASSET MANAGEMENT
Assuring multi-dimensional support in debt recovery and systemic stability!
Strategic intent
Reinforce CBL’s credit
function and credit recovery
practices
Prevent systemic risk that
might endanger the financial
and commercial stability of
the Bank
Enable knowledge sharing across
various departments of the Bank,
sharing insights of best practices in
credit management and recovery
Ensure protection against loss of quality
of collateral
Review
CBL’s Special Asset Management Division (SAMD) shifted
focus to credit quality management after the Bank made
the deliberate decision to scale-back on aggressive lending
activities over the past few years in order to protect the
integrity of the loan portfolio against poor quality assets.
Adopting a 360-degree approach, we examined the precredit and post-credit views on credit quality management
enhancement. While safeguarding the crucial creditworthiness
evaluation aspects of our business, we also emphasised on
credit recovery, hence ensuring a far more comprehensive
focus on the normal loan cycle.
SAMD collaborates and coordinates closely with all
departments, particularly Corporate, Commercial and SME
(non-PPG) to deliver the best outputs and outcomes in credit
recovery amidst the various circumstances of the borrower.
Further, in order to assure proactive follow-up – beginning
with the earliest phase of default/nonpayment – we
increased delinquent monitoring across the Bank via our
recoveries department, or SAMD. Thus, SAMD has ensured
182
Annual Report 2022
Engage in holistic appraisal of
the whole credit lifecycle
Ensure income contribution
through credit reclamation
and also a variety of other
ways
Free up productive assets
that any recovery from classified/written-off accounts not
only contribute significantly to the Bank’s improvement in the
NPL ratio, but also contribute to the net earnings over time.
SAMD’s income contribution is via the following:
•
Interest revenue from rescheduled accounts
•
Revenue from interest suspension on realisation basis
•
Revenue from any recovery from written-off accounts
•
Revenue from reduction in provision requirements through
recovery/rescheduling
•
Revenue from unapplied interest
•
Revenue from recovery of legal expenses
There are two basic causes of financial loans going bad:
Deliberate default and bona fide reasons on the part of the
borrower, such as company failure, death, natural disaster,
pandemic, etc. While CBL’s SAMD is proactive and persistent
in its pursuit of willful default and intentional misconduct, it
is sympathetic and supportive to the needs of borrowers
facing genuine obstacles. In both instances, SAMD prioritises
bringing delinquent accounts to the negotiation table, hence
The Bank handles public funds and therefore has a
responsibility to customers, shareholders and the wider
society and so cannot wait indefinitely in credit recovery.
Therefore, when the Bank’s genuine negotiations fail to
produce the intended result, it has no choice but to liquidate
the collateralised assets.
During the past three years, SAMD has made every effort
to settle long-overdue accounts by selling collateral. Thus,
the division plays a crucial role in contributing to the Bank’s
off funds, as well as the release of interest suspense and
unapplied interest, and ensuring contribution to the P&L.
Furthermore, starting March 2021, SAMD has been charged
with managing the legal actions associated with the Bank’s
portfolio accounts. The team monitors and follows up on
legal measures. CBL’s legal actions have not been restricted
to the standard Artha Rin or NI (Negotiable Instruments) Act
litigation, but have also endeavoured to develop novel ways to
assure the Bank’s recovery of outstanding credit.
Operational update
4,752.9 mn
1,363
Recovery by SAMD over the past 5 years
Recovery by SAMD in 2022
The key highlights of the SAMD in 2022 are given below:
•
Contributed BDT 1,363 mn, surpassing the yearly target
by 114%
•
Recovered funds from as many as 108 accounts
transferred from the businesses to SAMD
•
Recruited skilled manpower to ensure smooth functioning
and attainment of targets
•
Adjusted 26 accounts in full
•
Seven assets were successfully released under auction
through different sections of ARA-2003 and subsequently
adjusted with the related accounts by the bid amount/
approved amount
•
Successfully sold 10 properties through auction under
different sections of Artha-Rin-Ain-2003 and partially
adjusted with the outstanding amount
Currently, a team of 42 young and creative officials work at
SAMD to carry out the responsibility not only to the Bank but
also for the protection of public funds.
Key trends
Inflation-induced
slowdown may have
a negative impact on
industrial credit quality
Wilful default is on the
rise, warranting stronger
vigilance
Courts and the judiciary
are showing increased
penchant to settle and
dispose of cases
Credit checks at origination
and underwriting are
becoming more and more
important for maintaining
asset quality of a bank
Annual Report 2022
183
Our Foundations
profitability through the recapture of classified/written-
enhancing the likelihood of ultimate settlement.
2023 roadmap
Enabling more stringent account monitoring to assure recovery by
ensuring 360-degree effort via both negotiating and legal excellence
Engaging external (third-party) debt collection agencies to expedite
the recovery process
Ensuring continual follow-up on regularised accounts to prevent
them from backsliding to the NPL category
Ensuring accurate and timely MIS to support management
decisions and compliances
Ensuring excellence in reporting to Bangladesh Bank
Adding specialised manpower to address particular needs while
reducing attention on smaller and time-consuming accounts
Working closely with all concerned Bank divisions to expedite
the recovery process
Emphasising on legal efforts to vacate the order of stay and discharge of
the rule as soon as possible from the Hon’ble High Court
Resolving the classified loan outside the Court and pressuring the
defendant/accused for dues recovery as and when required
184
Annual Report 2022
Our Foundations
CREDIT ADMINISTRATION DIVISION
A commitment to provide exceptional credit-related services to all internal and external customers
of the Bank!
Strategic intent
Remain instrumental in
fostering a culture of credit
discipline and risk ownership
and accountability
Ensure execution of a
sound strategy that
prioritises compliance with
all applicable rules and
regulations
Detect, analyse and
control credit risk covering
the entire credit cycle of
documentation, transaction
and portfolio
Monitor and evaluate credit
risk models, the Bank’s
analytical capabilities,
compliance with regulations
and guidelines, and other
relevant aspects
Review ratings with the
most recent financial and
other pertinent data
Classify and categorise
external and internal risks in
order for corrective action to
be taken
Review
A bank’s credit discipline and credit risk monitoring are
•
Ensure transaction integrity related to all loan facilities
•
Enable stock inspection and validation and MIS/monitoring
of loans and advances
contingent on its credit administration.
In March 2008, CBL established its centralised Credit
Administration Division (CAD), an ISO-certified entity, with the
primary responsibility of completing all post-approval activities
•
Engage in CL reporting alongside provision calculations
and CIB report generation
•
Circulate
potential
SMA
classification
to
stakeholders for preemptive action
of Corporate, Commercial, SME, and OBU credit facilities,
including documentation, transactions, monitoring, reporting,
•
Ensure regulatory reporting and audit compliance
and archiving. This was done to achieve the following:
•
Become custodian of customer property
•
Operational update
Ensure full compliance in documentation and covenant
management
relevant
In 2022, CAD continued to fulfill its multipronged
•
Reduce credit and operational risk
•
Protect the Bank’s loan book and ensure stability of asset
loan documents. The division also took some steps within its
quality
mandate, including the following:
responsibilities, including review and updation of standard
Annual Report 2022
185
•
e-Doc data entry simplification
•
Data entry on mortgaged property published on the web
portal of the Ministry of Land under “E-mutation”, as per
instruction of Bangladesh Bank (BB)
•
Proactively enabled paper-less banking for reducing
operational expenses
During the year, CAD maintained account of various stimulus
packages, in compliance with regulatory directives. In 2022,
•
Digital survey for land properties at the time of mortgage
•
Upgraded CSMS data and reduced errors by 80%, as per
BB guidelines
•
Successfully closed the Bank’s CIB data remediation
project
Package
Refinance received (BDT mn)
•
Ensured guarantor’s information tagging with customer
loan account and CIB
WCSP
3,630
CMSME
2,662
•
Facilitated for claiming/receiving refinance and interest
subsidy against working capital, workers’ salary and
CMSME stimulus packages
According to regulatory instruction, BDT 787 mn provisions are
Customised product development in line with the stated
policy and processes
of strong monitoring by CAD, a sum total of BDT 116 mn has
•
the Bank claimed and received refinance against WCSP and
CMSME amounting to BDT 6,293 mn at bank rate, while the
Bank earned interest @5%.
held against different accounts under BRPD Circular-56/2020
& 53/2021 and other COVID-related financing. As an outcome
been transferred to net income, thus boosting profitability.
2023 roadmap
Automation of regulatory returns in accordance with the regulatory template, which will enhance
TAT, decrease manual work, and boost productivity
Launching of CIB Reporting Software to close the CL-CIB reporting gap with dashboard
information viewability in preparation for future compliance and upgrades
Robotic Process Automation (RPA) in collection of borrower liabilities (funded
and non-funded) from core banking software (Finacle and Ababil NG) at a
single place, thus providing a 3600 view
Loan account opening by copying existing loan account against
LAA type product of Bullet type loan to reduce turn around time
(TAT)
Separation of security and collateral value in order to
calculate the system-generated value of provision
calculation
186
Annual Report 2022
Our Foundations
INTERNAL CONTROL
AND COMPLIANCE
Implement an adroit and agile internal control procedure to superintend the Bank’s key risk areas and
achieve operational efficiency and business objectives.
Strategic intent
Prevent adverse risk
formation through
continuous vigilance and
systematic mitigation
Strengthen the risk control
environment through audit,
inspection, compliance and
monitoring
Ensure timely, accurate and
comprehensive financial and nonfinancial disclosure in accordance
with internal and external stakeholder
expectations
Conduct activities within the scope
of specified rules and undertaking
compliance-specific measures in line
with applicable laws and regulations
Review
Managing public funds and ensuring systemic liquidity are vital
cogs of a bank’s operations. Further, structural sustainability
of a financial enterprise is also crucial to prevent a contagion
effect and ensure integrity of the whole financial system. In
this regard, a bank has to ensure thorough risk management
that balances the expectations of the organisation achieving
its financial and shareholder goals, while also ensuring
responsible
superintendence
of
Anticipate potential areas
of risk pools and protecting
the Bank’s operations and
reputation
unintended
risks
or
consequences.
Keeping the overall importance of City Bank in the context of
Bangladesh’s financial services industry, the Board of Directors
of the Bank have developed robust frameworks and defense
strategies to mitigate risk. This originates from a continuous
process of identifying, analysing and governing risk via sound
Achieve performance
consistent with the Bank’s
values and code of conduct
and in accordance with its
vision and mission
Expand scope of audit, such as audit of
non-banking assets and accountability
exercises, etc.
internal controls and compliance standards, which is helmed
at CBL by its Internal Controls and Compliance Division (ICCD).
The process of risk governance is regularly reviewed by the
Board and such assessments have affirmed the Board’s
opinion that the Bank’s systems governing internal control
and compliance are sound and sufficient to provide reasonable
assurance regarding the dependability of risk management
and control. The Board’s assertions on internal control and
compliance also extend to financial reporting and the process
guiding the preparation of financial statements, which are
aligned to applicable accounting norms and regulatory
requirements.
ICCD also periodically revises the Bank’s internal control
policies to reflect the dynamism of the external environment.
With the advent of global economic shifts triggered by
COVID-19 and the Russia-Ukraine crisis, this has grown more
Annual Report 2022
187
acute. In addition, a Risk-Based Internal Audit (RBIA) approach
has been used as an additional security safeguard.
strategy. Some of the other key facets of ICCD’s responsibility
and impact has been given hereunder.
Risk assessment by ICCD takes cognisance of compliance
with the Bank’s policies as well as regulatory requirements
of Bangladesh Bank, while also taking social, ethical, and
environmental risks into consideration and recommending
appropriate measures to further bolster the Bank’s internal
control framework.
Branch:
The Corporate Governance Report on page 286 of this Annual
Report describes the Bank’s progress in implementing internal
controls in accordance to regulatory norms.
Operational update
The Board released its risk assessment and CBL’s banking
strategy in 2022. The report focused on the risks posed by the
Russia-Ukraine conflict and the outbreak of a new variant of the
coronavirus in China. Since February 2022, the world has been
facing unprecedented food, natural gas, and currency crises
as a result of economic sanctions imposed between Russia
and the US-EU coalition. Consequently, inflation spawned as
a result of this has triggered disruption in international trade.
In addition, the precarious financial position of Bangladesh’s
neighbouring countries such as Sri Lanka and Pakistan further
disrupted the region’s economic stability.
The Board, cognisant of the emerging challenges, cautioned
vigilance to ensure that the government and other regulatory
guidelines regarding foreign exchange management, loan
disbursement, trade financing, etc., were adhered to, while
also keeping a close eye on key risk formations, especially
NPLs.
ICCD advanced the culture of compliance Bank-wide through
the following initiatives undertaken in 2022:
•
All branches, Citygem priority centers and sub-branches
were audited by the branch audit team
•
Performed surprise cash audits and AML/CFT inspections
at branch premises
•
HO audit team audited all key Head Office departments
and all subsidiaries
•
Conducted many investigations into various concerns
Updating audit procedures across the Bank’s various divisions
is a crucial component of ICCD’s preemptive risk governance
188
Annual Report 2022
A dynamic risk and control matrix has been formulated for each
branch of the Bank. As a consequence, the branch network can
now be audited remotely via a secure IT platform and under
a homogenous methodology. With a view to make this an
inclusive process, the ICCD engages branch leadership, the
operational team and, where required, the Audit Committee
of the Board.
Head Office departments:
A comprehensive risk and control matrix has been developed
for several Head Office departments, which is being utilised
for audit purposes. For the rest of the departments risk and
control matrices will be introduced in the current year, thus
covering all departments of the Bank.
Central bank coordination of inspection
ICCD serves as a liaison for the Bank and coordinates with the
relevant departments of Bangladesh Bank about regulatory
appraisals. The regulatory rules are applied in accordance with
the Bank’s regulatory governance charter, which helps resolve
regulatory concerns.
Impact analysis of new regulations:
ICCD plays a crucial role in bolstering the risk and control
environment of the Bank through independent assessment
and compliance assurance to new regulations and approval
conditions on various issues. ICCD also escalates any identified
gaps to the management with a recommended action plan for
expeditious implementation.
Employee awareness:
ICCD conducts training and workshops to enhance ICC audit
awareness, including AML/CFT issues, especially amongst
front-line employees who are the first line of defense in the
Bank’s operations.
Promoting incentives and recognition:
ICCD acknowledges the work of its own employees as well as
other stakeholders who contribute to reinforcing the Bank’s
risk and control environment. Such incentives play a part in
assuring the Bank’s defenses.
At City Bank, risk identification and thorough mitigation reflect
the Bank’s resolute commitment to developing a risk-aware
landscape in which everyone ensures that risk is managed to
the point where it becomes a benefit for the Bank rather than
a threat. With robust risk governance practices, our internal
risk assessment standards are ingrained in the day-to-day
operations and management processes of the Bank, and
their outputs/results form an integral part of the framework
for monitoring and controlling risk, allowing us to sustain a
favourable risk profile.
City Bank’s ICCD offers reasonable assurance that the Bank’s
risk management systems are effective and fully functioning
at all times. The strategic imperative of internal control
systems is to enable the Bank to achieve sustainable growth
by assuming acceptable risk, evaluating the efficiency and
effectiveness of our internal controls and policies to assure
complete alignment, and ensuring transparent reporting to
underscore compliance with all applicable regulatory laws
and guidelines. Thus, ICCD plays a crucial role in ensuring that
the institution is able to satisfy its operational performance
criteria, which is a prerequisite of meeting shareholder
expectations.
City Bank’s ICCD meets the requisite organisational
architecture required by Bangladesh Bank’s Core Risk
Management Guideline on ICC. Although the Bank’s audit
function is housed under ICCD, it reports directly to the Board
Audit Committee. Further, the Bank’s three-tiered risk defence
strategy, of which this framework is a part, helps to keep the
institution safe from potential threats. Thus, ICCD acts as a
vital link between the Board and the Bank’s administration.
The following diagram denotes the key functions of ICCD.
Audit & Inspection Unit
ICCD
Information Systems Audit Unit
Shari'ah Audit Unit
Compliance & Monitoring Unit
Audit & Inspection Unit
Mandate:
Ensure effective and efficient audit of internal control systems.
Composition:
The unit is constituted by an operationally-independent team with direct reporting to the management, thus reflecting the
importance of the unit within the overall organisational construct. The unit is further sub-divided into three wings:
Branch Audit Wing
Head Office Audit Wing
Foreign Exchange Audit Wing
Such a structure ensures:
Scope of audit:
•
Comprehensive audit across the Bank
The Audit & Inspection Unit applies a risk-based internal
•
Independent identification and assessment of key
operational risk formations across the major business
divisions through regular audits conducted under the
approved annual audit plan
audit methodology to its audit function. Under this, the focus
shifts from full-scale transaction testing to risk identification,
prioritisation of audit areas, and allocation of audit resources,
in accordance with risk assessment.
Annual Report 2022
189
Our Foundations
Internal compliance controls and framework
This apart, risk-based special investigations and surprise
inspections are also undertaken, including:
•
Alert the Bank’s divisions of any regulatory updates,
procedural changes, or regulatory amendments
•
Selective transaction testing
•
Liaison with regulators
•
Evaluation of risk management systems and control
procedures implanted in various functions of the Bank’s
operations
Monitoring Unit:
•
•
Oversee the effectiveness of the Bank’s internal controls
systems by identifying key/high risk incidences or buildups
•
Although monitoring controls are an essential part of the
overall compliance and monitoring function, the Monitoring
Unit also independently fulfills its responsibilities in this
regard
Offering advisories for mitigating risk
Information Systems Audit Unit
Mandate:
Examine processes, IT assets and internal controls at multiple
levels in a systematic and objective manner through regular
audit processes under the approved annual audit plan.
Scope of audit:
Information Systems Audit Unit helps the Bank evaluate and
improve its use of controls to safeguard technology, measure
and improve performance, and achieve stated objectives.
The audit scope comprises:
Some of the key activities under monitoring procedures
include:
•
Monitoring operational performance standards of different
branches and divisions, and highlighting any perceived or
real deviation/s
•
Gathering pertinent information for systematic risk
assessment of individual units
•
Formal audit to examine IT-specific processes, capabilities
and assets and their role in facilitating business processes
•
•
Audit extension to other domains, such as financial
management and accounting, digital banking, cyber
threats, operational performance, quality assurance,
governance, risk management, and compliance
Periodic evaluation of business lines, including
departmental control function checklist (DCFCL) and
quarterly operations report (QOR)
•
Audit of loan documentation checklist (LDC)
•
Self-assessment of anti-fraud internal controls and antimoney laundering
•
Tracking of regulatory requirements
•
Special information systems investigation as per the
Bank’s requirements
Shari’ah Audit Unit
2023 roadmap
Mandate:
Some of the major focus areas for the current year will be:
Evaluate whether City Bank’s Islamic Banking business is
operating in line with the principles of Islamic Shari’ah, as
pronounced by the supreme authority, the Shari’ah Supervisory
Committee (SSC). Further, it also ensures that general banking
guidelines and principles are adhered to.
•
Widening audit coverage by focusing on risk-based audit
•
Talent management and the development of a traditional
reporting structure to assure high-quality audit practice
•
Development of a new audit wing/methodology for
process efficiency; a draft concurrent audit manual has
already been produced and is nearing completion
•
Emphasis on a technology-based audit strategy that
aligns with global best practices and certifies the data
validation process
•
Maintaining relationships with authorities to understand
their expectations and address them within the specified
timeframe
•
Creating work plans to bolster the leadership pipeline for
the future
Compliance & Monitoring Unit
Mandate:
Compliance Unit:
•
Identify and track compliance activities of various divisions
and branches of the Bank
•
Engage in follow-ups to ensure that all regulatory
requirements and issues identified by internal/external
auditors are rectified and complied with within specific
timelines
190
Annual Report 2022
Our Foundations
PROCUREMENT
Assuring the cost-effective and timely availability of materials and services essential
to the Bank’s operations.
Strategic intent
Keep the Bank’s
requirements of goods and
services at the centre of our
operations
Ensure on-time availability
Ensure ethics in procurement
and take a stern view on any
malpractice
Engage in negotiations for
ensuring the right price
Focus on procurement process
digitisation for more efficient
deal closure
Develop an ecosystem
of suppliers and service
providers through a
partnership-based model
Seek the best value proposition
in the interest of the Bank and
its vendor-partners
Review
The Procurement Division of City Bank plays a vital part in maintaining the Bank's operations. The division is responsible for
procuring high-quality goods and services at the lowest possible cost, while respecting the Bank's procurement standards and
ethical ideals at all times.
Operational update
2,376
1,364 mn
1,437
176 mn
Total requisitions
Total PO value (BDT)
Total POs issued
Savings achieved against
PO value (BDT)
259
45
29
RFQs and tenders issued
Contracts executed
Procurement Committee
meetings held
Operational update
The procurement team of CBL plays a facilitative role in
the Bank’s day-to-day operations by ensuring the timely
availability of products and services at the best value and most
favourable terms. The division employs ethical and honest
methods in all its interactions, and although it seeks value for
the Bank, it also protects the rights of service providers and
ensures they are not disadvantaged. The division operates
according to a predetermined set of processes and guidelines,
and maintains accurate documentation of its records for any
future reference.
Annual Report 2022
191
In the past five years, CBL’s procurement volumes have increased
from BDT 706 mn in 2018 to BDT 1,364 mn in 2022. This growth
was attributable to the Bank’s accelerated expenditure in IT and
digital infrastructure, including tech security, as digital banking
volumes skyrocketed with growing client acceptance of digital
banking. In addition, BDT 600 mn worth of goods and services
were acquired via frame contracts in 2022.
Significant reportables of the year
•
Signed 45 vendor contracts (50 in 2021) to assure
uninterrupted support throughout the warranty and postwarranty periods
•
Organised 29 Procurement Committee meetings during
which 93 agendas were discussed and closed
Key IT and business projects implemented
•
Security Information & Event Management (SEIM)
In 2022, the Procurement Division increased its emphasis
on achieving cost savings and the best value for purchased
products and services, thereby benefiting the Bank in more
than one way. Some of the significant events include:
•
L4-7 firewall
•
Back-up storage
•
Client backup
•
Obtained savings of BDT 176 mn against a PO of BDT 1,364
mn, representing 13% of the PO value. This was achieved
via effective vendor negotiations, bulk purchases, and a
multi-vendor approach. Notably, savings were realised as
a result of negotiations regarding:
•
Apps dynamics
•
DELL EMC Recovery Point Appliance
•
HSM Payshield V.10K
•
Trade Service and Correspondent Banking (TSCB) solution
•
New pricing against first stated price
•
Legal Information Management System (LIMS)
•
Previous year’s acquisition cost (for repeat procurement)
•
Learning Management System (LMS)
•
Collection & Recovery Management Solution (C&RMS)
•
Call center outsourcing (outbound call)
•
IBM message queuing system
•
A total of 259 RFQs/RFPs/RFTs (2021: 208) were issued,
and tender notifications for 46 items were published in
daily publications
2023 roadmap
Offer expedited procurement assistance, particularly for
mission-critical IT security/infrastructure and digital bankingrelated products and services
Automate all procurement cycle processes in accordance with the
Bank’s digital strategy
Continue to establish a department-wise yearly procurement
strategy to deliver effective services to internal stakeholders
and ensure meeting the Bank’s overall goals
Bolster operational efficiency and sharpen the
strategic intent via process updation in line with the
evolving needs of the Bank
192
Annual Report 2022
Our Foundations
BRAND & COMMUNICATIONS
AND CORPORATE AFFAIRS
The Brand & Communications and Corporate Affairs Division
works to establish, protect and enhance institutional
reputation as a reliable partner in the publicity of the
Bank’s financial products and services. Deploying a focused
marketing and profile-raising approach, the division
collaborates closely with other departments of the Bank to
identify commercial possibilities and goals for materialising
organisational strategy.
The Division’s Corporate Affairs wing plans, strategises,
executes and superintends the Bank’s stakeholder
relations. To strengthen ties, the team works with the
government, other businesses, the media and civil society.
The team is also active in local and global corporate brand
reinforcement.
Both of these wings collaborate to meet the Bank’s goals in
a seamless and harmonious manner.
Brand & Communications
Key achievements, 2022
The Brand & Communications team played a vital role in
the launch of Bangladesh’s first Shariah-compliant digital
deposit product that was co-developed with bKash, one
of the country’s largest mobile financial services (MFS)
company. The project was initiated with the vision to enable
customers, especially the unbanked and rural populations,
to access financial savings through their mobile wallet.
Extensive marketing and promotion helped expand product
recall, with extensive awareness sessions also conducted
to build customer familiarity with the straightforward
process of availing the Bank’s Digital Islamic DPS product.
The launch of Alo Women Entrepreneur Loan was one
of the other key achievements of the team. Alo Women
Entrepreneur Loan is a women-only loan product that
supports customers with business expansion and in
meeting working capital needs, for asset acquisition, etc.
The underlying idea behind the concept is to enable small
and cottage entrepreneurs in rural areas to build their
operations with short-term fund support. A launch event
was held where three women were issued the loan. Other
publicity events comprised awareness during Uthan Boithak
sessions and fairs organised outside urban areas and also
via extensive digital communication. Thus, the division
actively contributed to the launch and branding of the loan
facility for women entrepreneurs.
Another major achievement successfully accomplished
by Brand & Communications comprised the launch of a
Second Hand Car Loan. By developing engaging content and
publishing it in connecting media, the division demonstrated
to potential customers the path to make their dream of
vehicle ownership come true. The team strived to enhance
responsiveness among car enthusiasts, collected leads
online, and followed up for enhanced customer conversion.
Moreover, the Brand team also coordinated the programs
arranged to promote the product through the Bank’s
branches and also at the popular Dhaka Motor Show.
Brand & Communications facilitated the redesign of City
Bank’s two flagship websites, City Alo and CBL Money
Transfer, in 2022. By harnessing Search Engine Marketing
(SEM) and developing campaign-based banner placement
marketing in various third-party portals, the team continued
to promote both websites as well as other products of the
Bank.
Together with meeting the Bank’s digitisation goals, the
Brand team prioritised digital media in terms of promotion.
The division achieved a paradigm shift towards social media
platforms, as the majority of the Bank’s communication was
conveyed through this platform. The Bank’s social media
channels were used as an active medium to promote new
products and services and also for the launch of digital-first
brand campaigns.
In 2022, a 24x7 Query Management System was introduced
by the team, which ensured 24x7 response to customer
queries via human interaction. During the year, the query
management response rate stood at a high 97%.
Annual Report 2022
193
City Bank’s imprint on the digital highway in 2022!
Facebook page new likes
increases by 302%
Facebook page visits
increased by 84%
Launch of the 24x7 Query
Management System
Response rate of 97%
accomplished at the Query
Management System
The Brand wing of the division is responsible for organising
outdoor events and branding of branches, sub-branches,
ATMs and RATMs. To enhance customer convenience, the
Bank opened a branch in Basundhara, a major locality in
Dhaka, making it the 133rd branch of the Bank. The team
also supported the establishment of 12 sub-branches
during the year. The team played an instrumental role in the
extensive branding of the new branch, sub-branches and
service points, thus actively promoting the Bank’s products
through these critical touch-points.
in upholding the brand image of the Bank throughout
In order to enhance the travel experience of City Bank’s
American Express cardmembers, the Bank launched its
third airport lounge at the domestic terminal of Hazrat
Shahjalal International Airport (HSIA) in Dhaka. The Brand
& Communications team contributed significantly to
the interior design development of the lounge and also
organized the inauguration event of the lounge. In addition,
the team created awareness among its cardmembers
through multiple mediums regarding this lounge.
and it was highly appreciated by all.
City Bank was the title sponsor of the highly-acclaimed
British Curry Fest. The Brand team played a critical role
Throughout the year, the Bank was bestowed with
Best Bank in Bangladesh
– by FinanceAsia Country
Awards 2022
194
Annual Report 2022
Best Bank in Bangladesh
– by Global Finance Best
Bank Awards 2022
the grand festival. Moreover, the team endeavoured to
make the event more enjoyable, ensuring a unique and
memorable experience for our valued cardmembers.
This effort was admired by our esteemed cardmembers.
The Brand team also organized exclusive screening of the
immensely popular film, ‘Hawa’. Through this initiative of
the team, American Express cardmembers and merchants
got the unique opportunity to watch this captivating film
Corporate Affairs
During the year, the Corporate Affairs team enhanced
interactions with reputed foreign institutions, putting the
Bank in the global awards spotlight. The team played a key
role in enlightening them about City Bank and its sphere
of influence in financial inclusion and furthering socioeconomic development in Bangladesh.
numerous awards and accolades, which are listed below:
Best Sustainable Finance
Bank in Bangladesh
– by Global Finance’s
Sustainable Finance
Country Awards 2022
Best Retail Bank Bangladesh – by Retail
Banker Asia Trailblazer
Awards 2022
Our Foundations
Best New Islamic Banking Window
- Bangladesh – by Global Brands
Banking & Finance Awards 2022
Best Islamic SME Bank in Bangladesh
– by The Asset Triple A Islamic
Finance Awards 2022
Leading Partner Bank in Bangladesh
– by Trade and Supply Chain Finance
Program (TSCFP) Awards 2022 by
Asian Development Bank (ADB)
Honorable Mention of category
‘Product Innovation of the Year’ by
Global SME finance awards 2022
The Corporate Affairs wing is in charge of sourcing, acquiring
and distributing gifts for clients and other stakeholders.
In 2022, the team produced and distributed gifts for New
Year’s Day, Pohela Boishakh, Ramadan, Eid, Durga Puja,
and other major occasions. The team is also involved in the
development of the annual report and annual calendar.
City Bank, as a socially responsible Bank, has always lent
a helping hand in several sectors of social development,
ranging from cultural events to disaster management,
sports, education, and aiding underprivileged women and
children.
In this regard, the division facilitated the Bank in donating
BDT. 173.8 mn to 29 CSR projects in 2022. It also enabled the
Bank’s contribution of 75,000+ blankets for winter-affected
people, costing upward of BDT. 25 mn. Furthermore, the
Bank also contributed BDT. 100 mn to the Prime Minister’s
Relief & Welfare Fund to assist those affected by the floods.
In addition, as part of the Bank’s CSR drive, the Corporate
Affairs team organised an MoU signing event with BAURES
to donate a fund of over BDT. 240 mn for Bangladesh’s
agricultural development. Additionally, in 2022, the wing
took the initiative to sponsor several large sporting, cultural
Best CSR Bank in Bangladesh – by
Asiamoney Best Bank Awards 2022
Honorable Mention of category ‘SME
Financier of the Year - Asia’ – by
Global SME Finance Awards 2022
and educational events for branding and enhancing City
Bank’s brand visibility.
The team also successfully completed 41 events and
projects under City Bank sponsorship during the year.
Among these, some noteworthy events were the
Calligraphy Competition 2022, Tarupallab Nisarg Award
2022, JK1971 by Gorai Films, DU 100 Years Celebration,
National Snooker Championship 2022, Made in Bangladesh
Week (BGMEA) 2022, NRB Professionals Summit 2022,
BIJOY UTSAV 2022, etc.
Plans for 2023
City Bank will further expand its brand presence by
developing distinct and distinguished communication to
highlight the Bank’s differentiation. The Bank is also keen
to capitalise on the country’s burgeoning digital landscape,
and will expand on its digital marketing and branding
momentum in its upcoming campaigns. Meanwhile, the
team will also continue promoting the country’s potential
globally through various platforms and projects, as well
as communicating the Bank’s success in its impact on the
social, economic and environmental spheres in Bangladesh.
Annual Report 2022
195
PR & MEDIA
Overview
City Bank’s PR and Media Division is entrusted with the
responsibility of fostering positive relations between the Bank
and its customers and other stakeholders. Utilising numerous
modern public relations techniques, the Bank has been able to
develop a robust brand image as a trusted financial partner,
nurturing a strong connect with the public.
City Bank is renowned as one of the top banks of Bangladesh,
and PR & Media Division’s utilitarian communications
have contributed to the sustenance of the Bank’s status
and reputation for many years now. Through any crisis
circumstance, the Division serves as a single point of contact,
with the team, keeping the management up-to-date on media
projections in real time.
In 2022, two new events of the Bank comprising the City
Bank–bKash Nano Loan product and City Islamic DPS product
were hugely publicized by the PR & Media Division’s `Meet
the Press’ program. Most of the country’s major newspapers
as well as electronic media gave excellent coverage of these
two new products of City Bank. Furthermore, the division also
gave a huge fillip to the Bank’s BDT. 4000 mn subscription
of perpetual bond. This helped the Bank create brand value
among the public through top-of-mind product recall in a
competitive financial market.
PR & Media Division kept the Bank in all media platforms
throughout the year 2022 by highlighting the various
achievements of the Bank. Especially, events around City Bank
winning ADB`s Leading Partner Bank Award in Bangladesh
for the 2nd time, the Bank emerging as the first bank from
Bangladesh to participate in Global Trade Finance Program
as a confirming Bank, the Bank being named as Best Bank
in Bangladesh by international publication Finance Asia, and
the Bank winning the prestigious Asia Money’s Best Digital
Bank in Bangladesh Award-2021. These and the other
accomplishments of 2022 were widely circulated by the
division with timely press releases in electronic, social and print
media, enabling the Bank to avail positive outreach. Further, the
Platinum sponsorship of `Economic Conference’ by the daily,
Bonik Barta, brought enormous mileage for the Bank.
With the aim of strengthening relationships with the media
and also ensuring the highest recall of the City Bank brand,
interviews of the Bank’s MD & CEO and DMDs were covered
in top circulated newspapers, such as The Daily Star, Prothom
Alo and Business Standard.
The division has been given the responsibility of managing
requests for various advertisements in souvenirs. As
one of the top banks of the country, the Bank receives
requests from numerous publishers for souvenir adverts or
sponsorships. The Bank continued to engage selectively, for
instance in sponsoring the country’s only science magazine,
‘Bigganchinta’, while also placing hundreds of advertisements
in various platforms.
Public image makes up to 75% of value of most companies,
a statistic has revealed. Hence, the Bank’s PR & Media
Division aims to invest in good public relations strategies
to maintain a beneficial relationship with the public and a
positive brand image.
PR & Media Division’s key mandates for the year 2022
196
Launch of new
product
Financial result in the
media
Promotional campaign
Awards /Accolades for
Bank
Involvement in local/
communities
Communication
campaign
Prepare and circulate
press releases
Arranging interviews
Preparing clients for
press conference
Crisis management
Annual Report 2022
Our Foundations
FINANCE DIVISION
The Finance Division of City Bank works strategically to build a
tactical financial foundation for attaining the Bank’s targeted
financial goals and value creation objectives, with an emphasis
on innovative ideas anchored on logicality and pragmatism,
while cultivating a culture of ethics and compliance.
Operating context, 2022
As the year 2021 folded into the year under review, i.e. 2022,
there was a sense of challenges being accentuated, with
the tail effects of the COVID pandemic meeting the strong
headwinds originating from the unprecedented launch of
special military operations by Russia in Ukraine in February
2022. As the months rolled by, the war intensified, which
triggered significant global challenges such as record CPI and
core inflation that skyrocketed prices of basic commodities
and essentials. Furthermore, sanctions imposed on Russia by
western allies had a retaliatory global effect as Russia cut-off
fuel supplies to Europe and other regions, thus plunging the
continent and the world into turmoil.
With high inflation sparking a cost-of-living crisis in many
parts of the world, central banks, which were behind the
inflation curve, adopted policy tightening with substantial
and frequent adjustment in policy rates. Thus, there was
a sharp reversal from a benign interest rate environment
to one with rising interest rates, and though these have
somewhat been successful in yanking inflation off from its
sticky highs, it has led to a counterproductive environment
with drumbeats of recession sounding stronger from many
regions of the world.
Thus, City Bank’s operating environment was characterised by
a volatile, uncertain and undefined environment in 2022, which
heightened the role played by the Bank’s Finance Division in
providing stability while preparing the Bank to counter the
challenges, ensure low-cost liquidity sufficiency to capitalise
on spots of opportunity, and in enabling improved repricing
of risk, which bolstered the Bank’s credit risk management
architecture.
The convergence of these initiatives yielded the desired
outcomes, with the Bank continuing to report satisfactory
financial metrics during the year 2022, while also
accomplishing a stronger financial position. This has prepared
the Bank well to tide over any future crises and remain on the
path of sustainable financial value creation.
Key initiatives, 2022
Liquidity remained a central pillar of the Bank’s financial
management strategy, with the Finance Division ensuring a
secure and solid capital base with sound regulatory ratios. This
contributed to the Bank accomplishing its loan disbursement
targets for the year 2022 while ensuring satisfactory Net
Interest Margin (NIM) that was also driven by the division’s
support in the Bank garnering a higher base of low-cost
liquidity. The Bank’s NIM stood at 4.3% in 2022, vs. 4.5% in
2021, which attests to the Finance Division’s and ALCO’s
strong focus on faster repricing of loans and advances on the
one hand and ensuring healthy CASA (Current Account Savings
Account) on the other, which stood at 51.1% at the end of the
year. CASA is a major source of low-cost funds.
Furthermore, in a major achievement in the sphere of
capital management, the Finance Division spearheaded the
facilitation of City Bank’s 4th Tier-II bond offering, which
helped garner BDT 7,000 million and contributed to the Bank’s
2022 CRAR, or the Capital Adequacy Ratio, of 14.46%, which
indicates high solvency. The Finance team was instrumental in
handling the entire fund raise process, which took months of
planning, strategising and coordination.
The Bank also successfully completed the listing of a BDT
4,000 mn perpetual bond on the Dhaka Stock Exchange (DSE)
and the Chittagong Stock Exchange (CSE) in 2022 with the
assistance of the division. The Finance team has enabled
the Bank to contribute to the BSEC’s objective of bond/
capital market buoyancy through supporting the listing of
this bond.
To enhance the Bank’s visibility amongst both local and global
investment community, the Finance Division successfully
organised four earnings disclosures in 2022 (for the fourth
quarter of 2021, and the first, second and third quarters of
2022), during which it engaged in providing detailed updates
and facilitated an open dialogue with representatives from the
global investment community. After repeated surveillances
throughout the year, the Finance Division also assured
continual assistance to obtain the Bank’s global rating of ‘B1’
by Moody’s in 2022, indicating high stability and efficiency of
capital ratios and overall operations.
Furthermore, the Finance Division also led several automation
drives within the organisation, such as report automation,
Annual Report 2022
197
development of a revaluation module in ABABILNG,
modification of accounting treatment in Finacle and
ABABILNG for FX transactions, alignment of physical long/
(short) position in foreign currencies, and development
and timely submission of new reports (Daily Liquidity
Position and Movement Report) to regulators to improve
monitorability across the Bank’s various functions. The
division also assisted the Bank in achieving savings of BDT
510 mn by monitoring the cost budget and another BDT 2
Driving the CASA Growth
taking it over 50%
Issued the Bank’s 4th &
largest Tier-2 bond of BDT
7,000 mn
Number of automation, including
ABABILNG modifications
The pandemic has been a useful reminder for organisations to
know that it is critical to acquire capacity to tackle unexpected
obstacles, while also being able to swiftly respond to
unexpected trends and developments. The Finance Division
is preparing the Bank for this future as it believes that
convergent solutions from divergent patterns will be vital for
the organisation to revive and thrive in the future.
Annual Report 2022
City Bank has always prioritised nation-building and the
Finance Division has always supported this endeavour.
Continuing with the track record of the past, the Bank was
able to deposit BDT 10,633 million to the national exchequer
in 2022 through taxes and VAT. The contribution for 2021 was
BDT 6,503 million, thus demonstrating a 64% YoY increase in
contribution to the state treasury.
Listed the Bank’s BDT 4,000
mn Perpetual Bond in DSE
& CSE
Cost budget monitoring helped save
BDT 510 mn
2023 strategy
198
mn by introducing payment terms and invoice discount.
Retained Moody’s Rating of
B1 in 2022
Deposited BDT 10,633 mn to national
exchequer through Taxes & VAT
With this perspective, the Finance Division will continue to
ensure that the Bank remains adequately capitalised, provide
cohesive information for improved decision-making, engage
in strategic examination of risk-return profiles, and adhere to
all regulatory norms and guidelines, thereby reinforcing the
Bank’s brand reputation and credibility among investors and
the broader stakeholder community.
These actions will ensure that the Bank is not just futureready but is also future-proof!
Our Foundations
LEGAL
Creating a solid legal shield around the Bank
Strategic intent
Safeguarding the Bank
against legal risks
Formulating the Bank’s
defense in the courts
of law
Assuring compliance
in order to defend
the Bank's interests
and reputation by
upholding all legallybinding judgments
Review
CBL’s Legal Division is founded on jurisprudence and is led
by legal experts. It assures compliance with all regulatory
statutes and legally-binding judgments in order to uphold the
Bank's interests and reputation.
The division is composed of three arms with distinct tasks.
These units include:
•
Legal Documentation Unit
•
Estate Management Unit
•
Court Operations Unit
The Legal Documentation Unit and Estate Management Unit
provide assistance in resolving potential legal issues arising
from operations, documentation, legal opinions, due diligence,
etc., while the Court Operation Unit is responsible for the High
Court, Appellate Division, and sensitive non-recovery related
cases.
While serving as a business partner within the legal and
regulatory framework, the Legal Division is devoted to the
highest levels of service and professionalism, therefore
assisting the Bank in a vital business arena.
Remaining diligent in
resolving cases and
pending matters
Vetting of contracts
from a legal point of
view
After thoughtful reorganisation, the Legal Division is now more
committed than ever to protect the Bank's interests. All units
are working diligently and effectively to offer comprehensive
assistance to all relevant parties.
Further, Legal Information Management System (LIMS) deployment
is in its final phase and, post-implementation, all case-related data
can be viewed from a single dashboard. In addition, support and
services offered by different divisional departments can also be
posted, viewed, and monitored in real-time.
Thus, upon complete deployment of LIMS, the Legal Division's
contribution will be boosted, and once the system is fully
operational, it will further increase coordinated efficiency
among all key stakeholders, thus enabling the department to
meet its imperatives with greater vigour and efficiency.
2023 roadmap
The Legal Division is committed to upholding the purpose and
values of the Bank, and, during this year (2023), its primary
emphasis will be on the following core initiatives:
•
Ensure effective administration of pending litigation in
both the Supreme Court and subordinate courts, and
implement aggressive disposal objectives
2022 reportables
•
Despite several hurdles in 2022, the division was able to
dispose of 76 cases in the High Court and Appellate Division
during the year, including high-priority cases with a total suit
value of BDT 101,114.5 mn.
Investigating the possibility of automating processes
and reducing response times in the process of providing
assistance to stakeholders
•
Ensuring the entire installation of LIMS and, as a result,
harnessing the software to its fullest potential in order to
move forward with the Bank’s goals
Annual Report 2022
199
INFORMATION TECHNOLOGY
Provide secure, modern and revolutionised banking experience to our customers!
Strategic intent
•
Embrace bold and timely initiatives toward digitisation in
order to align with the Banks’s strategic vision and fulfill
its digital strategy
•
Facilitate the Bank’s customers and meet their
varied needs and expectations, such as swift service,
transactional security, etc.
•
Ensure operational continuity with robust safeguards
•
Protect the Bank against any cyberthreats
•
Support the various business units in their goals and
objectives, thus indirectly contributing to the Bank’s
earnings and profitability
•
Ensure optimal app performance
•
Adopt advanced technologies, such as Robotic Process
Automation (RPA), Artificial Intelligence (AI), Machine
Learning (ML), Micro Services, Data Warehouse and
Analytics, DevSecOps, Open Banking, etc., in a secure
manner
•
Enhance the Bank’s efficiency, capacity and productivity
•
Revamp customer experience while ensuring digitallyempowered customers
•
Ensure robust, flexible and secured infrastructure,
embracing agility in the digital ecosystem
Review
The role of Information Technology (IT) in the banking and
financial services industry cannot be undermined as it has
assisted the sector in meeting the challenges posed by
the new economy. Financial institutions rely on collecting,
processing, analysing, and disseminating information to
satisfy the demands of a varied set of customers, more
than most other businesses. So, it is hardly surprising
that banks were among the first users of automated
200
Annual Report 2022
information processing technologies, given the significance
of information in banking.
For the banking sector, technology has created new markets,
new products, new services, and more efficient delivery routes
or channels. Internet banking, mobile banking, and online
electronic banking are a few examples. IT has also empowered
the banking industry with the means to meet the challenges
presented by the new economy.
Recent financial sector reforms aimed at boosting the speed,
reliability and dependability of financial operations have relied
heavily on IT. The IT revolution has truly paved the way for an
unparalleled surge in financial activity, thus enabling financial
inclusion. The advancement of technology and the growth of
global networks have drastically cut the cost of international
money transfers. Thus, IT has helped banks to fulfill the high
expectations of customers who are both more tech-savvy and
more demanding.
This apart, since all organisations and activities are now being
prioritised and pivoted for digital transformation, digitalisation
has become a crucial leg of City Bank’s strategy. The Bank
has gained considerable benefits of digitisation in terms of
customer experience, revenue management, and cost control.
Indeed, we are beginning to witness digital changes improve
the Bank’s efficiency and business quality. It is similar to
a new paradigm shift for us that has enabled us to achieve
our desired transformation agenda via the deployment
of new technologies, accompanying tools, and process
methodologies.
City Bank's IT Division is led by a Deputy Managing Director
(DMD) and Chief Information Officer (CIO) and is supported by
several departments, such as Infrastructure, Data Management,
Enterprise Architecture, Business Enterprise Application,
Security & Governance and Project Management Office.
In line with its digital and tech framework, the Bank’s IT
Division adopted a number of projects in 2022 that not only
yielded useful benefits for the year, but will continue to deliver
positive outcomes in the years to come.
Our Foundations
Operational update
19
200
26
134
Enterprise projects
delivered
Small projects
delivered
Digitisation of manual
processes achieved
through RPA
Team size
At City Bank’s IT Division, our endeavour is to build the
Bank’s agility through digitality and ensure that the
Bank continues to thrive in its digital journey to address
a challenging post-pandemic reality, volatile economy
and other complexities. In this regard, the IT Division has
provided considerable support to business and functions
amid the challenges. Few of the major developments of the
year comprised achieving the PCI DSS re-certification and
obtaining ISO 27001:2013 (ISMS) for Information Security
Management System.
Some of the other key reportable highlights of 2022 are given below.
RPA (Robotic Process Automation)
Custodial Services automation
RPA was deployed to automate 26 manual operations
as part of the digital transformation focus. This
boosted productivity while also enabling time savings
through automating manual tasks that previously
took a long time to accomplish.
This was done to improve service standards to NRBs
(Non-Resident Bangladeshis), foreign individuals,
and institutional clients’ capital and bond market
investments.
City Bank Money Transfer - remittance app
Citytouch upgradation
This initiative helped simplify the remittance transfer
procedure and allowed customers to send money
using their own smart devices, which provided greater
convenience.
This initiative made Citytouch more uninterrupted and
offered a seamless user experience to the customers.
The key focus was to make the city touch backend
more robust.
IVR - Call Center
Islamic Banking
This program enabled the delivery of a variety of
automated banking services via voice and visual
(smart) IVR, thus allowing customers to obtain a
convenient banking experience.
The core banking system (Ababil) was upgraded to Ababil
NG, which has the most updated technology and features
to enable better and more seamless client service, as
well as enabling the building of the system’s flexibility
to accommodate various additional service integrations.
Annual Report 2022
201
Islamic DPS with bKash
Agent Banking
In addition to disbursement of end-to-end digital loans
to bKash app customers, City Bank and other FIs also
commenced offering Islamic DPS on digital platform to
bKash users. The product has been developed and owned
by the Bank and distributed via the bKash channel.
To satisfy the Bank’s goal of reaching the
unbanked through Agent Banking and enable true
financial inclusion, the Agent Banking system was
enhanced with increased flexibility and provision
for integrated solutions.
Trade Services and Corresponding Banking
Lotus (Loan Origination System)
Despite the difficulties, under this initiative, the IT
Division was able to successfully meet the BBK
deadline through manual preparation of schedules
and statements.
Under this program, the Loan Application Tracking
& Update System (LOTUS) was made faster,
more effective and more user-friendly through
updations and incorporation of new features.
Asset Operations Workflow
Learning Management System (LMS)
Under this initiative, progress was achieved in installing, integrating
and operationalising a workflow solution for the Bank’s branches,
Agent Banking outlets, Central Loan Processing Unit (asset
operations), contact centers and sales and administrative offices
to improve customer experience, satisfaction and loyalty.
The LMS software application was incorporated to
ensure that most of the mandatory/regulatory training
programs are conducted through a sound platform,
thus enhancing participation and learning outcomes.
Human Resource Management System (HRMS)
Security Information & Event Management (SIEM)
A new HRMS system was implemented to elevate service levels
of the HR division, which triggered improvement in organisational
efficiency and productivity.
SIEM solution of IBM Q Radar was implemented
to bolster the Bank’s security ecosystem through
continuous logging and monitoring.
SMS Gateway (MBM)
Call Center outsourcing
A new MBM platform was implemented to ensure a better
monitoring and reporting system with greater control over SMS
management, thus ensuring availability of new services on the
customer’s finger tips. Further, the SMS alert platform was also
restructured to augment server capacity.
Steps have been taken for call center operations to
be outsourced to ensure cost optimization without
compromising service quality and customer satisfaction.
202
Annual Report 2022
Our Foundations
Rental Management System (RMS)
Currently, the Bank has 550+ rental premises, which makes it difficult to disburse rent payments every month and provide
reports to the Management and Bangladesh Bank (BB). Thus, an automated system was implemented as a solution
to ensure more efficiency in archiving rental documents, preserving agreements, securing financial transaction-related
information, generating reports for BB, etc.
Key trends
Need for strong
digital/e-banking
channels
Increasing customer
need for convenience
and anytime,
anywhere banking
Customer desire of
safety of transactions
and personal data
2023 roadmap and mid-term initiatives
We will continue to evolve through our digital journey, ensuring
robust cybersecurity safeguards along the way.
Some of the key pillars of our tech and digital journey comprise
the accomplishment of multi-dimensional digital payment
Rising cybersecurity
incidents
Increased
regulations and
reporting
including virtual cards, QR code, wearables, Loan Origination
System enhancement, digital platform for merchants, SOC
(Security Operations Center), dark web monitoring system,
international remittance hub, merchant financing, anti-money
laundering, EDMS (Enterprise Document Management System),
L4-7 firewall implementation for network security, etc.
Annual Report 2022
203
GENERAL ADMINISTRATIVE DIVISION
As the nerve centre of the Bank, GAD serves myriad requirements for ensuring uninterrupted banking
operations within the ambit of external and internal regulations.
Strategic intent
Ensure uninterrupted banking
operations by providing key
support in major areas
Major interventional fields
include infrastructure,
security, logistics and
maintenance of assets and
premises
Ensure effective management of
available resources and accomplish
results within the predefined cost limits
Implement diverse initiatives to control
costs
Review
Amid the major economic challenges, City Bank’s General
Administrative Division (GAD) also had to contend with a
number of complexities in order to manage smooth and
efficient supply of services/materials at stable rates. Another
crucial obstacle was maintaining rentals that was overcome
through effective planning, negotiation and management.
Thus, GAD was able to successfully provide services to 500+
bank locations across Bangladesh, catering to the diverse
requirements of internal and external stakeholders for
sustaining efficient banking operations.
One of GAD’s major source of competitive advantage is its
seasoned team capabilities reflected in the proactive and
efficient management of administrative tasks with accrual of
cost saving benefits and meeting of desired expectations.
Operational update
GAD was able to make progress across a number of dimensions
in 2022. The key developments are given below.
204
Annual Report 2022
Engage in extensive
coordination and
superintendence to provide
the required levels of support
and in achieving desired
outcomes
Develop and review
processes, policies and SOPs
for ensuring greater efficiency
in all aspects of banking ops
Ensure smart transportation
management through automation
•
Undertook one of the biggest infrastructure projects in the
Bank’s history comprising demolishing the existing Head
Office building and constructing a modern high-rise tower
•
Commenced the process of renovation at Nassa Diamond
Building in Dhaka (Gulshan 1) to relocate employees from
the existing Head Office building
•
Successfully relocated the entire Trade Services Division
and Credit & Collection Division from Rashid Tower and
ABM Tower to Palmal Tower in Dhaka (Gulshan-1) as
part of our proactive initiative to shift to a fire-compliant
premises
•
Catered to 10,000+ service requests from internal users
•
Generated savings of over BDT 10 mn through implementation
of various initiatives
•
Implemented diverse small projects to comply with the
directives of Bangladesh Bank pertaining to fuel and
energy consumption
Launched a luxurious lounge at the domestic terminal of
Hazrat Shahjalal International Airport, Dhaka
•
Established a new branch at Bashundara Residential Area,
Dhaka
•
Provided emergency assistance to flood rescue operation
for branches located in the Sylhet region
•
Completed and handed-over several new projects, such as
26 ATMs, 2 sub-branches and 2 SME-S unit offices
•
Conducted security threat assessment and survey at 12
branches/sub-branches
•
Relocated and renovated 13 existing branches and 1
SME-S unit office
•
Conducted fire safety training at all branches and back
offices
•
Completed the necessary renovation work at ATM booths
to accommodate 234 RATM machines
•
Enhanced capacity to preserve CCTV footage for up to 365
days at 24 branches, taking the total tally to 90 branches
•
Successfully closed renewal of 58 lease agreements, out
of which 14 were renewed without any increment
•
Developed and reviewed 2 SOPs and 1 policy
•
•
Completed document outsourcing project at all branches,
Created a new panel of vendors and consultants for
infrastructure projects
2023 roadmap
Obtain commercial and other permissions from RAJUK/government/regulatory authorities to
commence construction of the new Head Office building
Complete demolition of the existing Head Office building and close appointment of
vendor and consultant for the new building
Complete renovation of the newly-rented Nassa Diamond Building where all
employees from the existing Head Office will be relocated
Continue implementing the guidelines of Bangladesh Bank
related to safety and security of the Bank’s premises
Establish 25 sub-branches and 30 ATMs and complete
renovation/relocation of 15 existing branches
Ensure auction of old, damaged and unused items
Ensure continuous process development in the form of introducing
automation, developing & reviewing policy and standard operating
procedure (SOP) etc.
Annual Report 2022
205
Our Foundations
2 back offices and 3 stores, thus enabling the release of
10,000 sft and achieving annual savings of BDT 8 mn
•
OUR OFFSHOOTS
206
Annual Report 2022
Our Offshoots
CITY BROKERAGE LIMITED
Democratising access to Bangladesh’s capital market for everyone to help achieve their financial goals!
Business identity
•
City Brokerage Limited (CBL), a wholly-owned subsidiary of
The City Bank Limited, was established to assist the Bank in
meeting its mission of putting customers in charge of their
own financial futures. Over time, City Bank determined a need
for a trustworthy financial intermediary to improve public
access to the capital market. CBL was thus founded to fill this
void and to serve as a synergistic complement to the existing
banking infrastructure in Bangladesh.
CBL offers its clients fast and low-cost trade execution services
and research support to enable them to achieve their investing
goals for gaining economic independence. It provides a secure,
trustworthy, and technologically-savvy gateway to the capital
market, where clients can take advantage of opportunities for
wealth creation.
banks of the country
•
•
market
•
Skilled professionals assuring the highest quality of
brokerage services to clients
•
Accomplished research team with 25+ years of cumulative
experience
•
Building investment thesis via analysis-driven research
reports which are published on Bloomberg, Refinitiv,
CBL is member and TREC-Holder of Dhaka Stock Exchange
Limited (DSE) and Chittagong Stock Exchange PLC (CSE).
•
FactSet and S&P Global Market Intelligence Inc.
Offers Discretionary Portfolio Management Account (CDA)
which gives access to specialized portfolio management
services to customers
One-stop solutions and support offered to non-resident
Bangladeshis (NRBs)
•
Proprietary online trading platform,
that
enables clients to trade on both stock exchanges (DSE and
CSE) via their smartphone or PC from anywhere in the world
Experienced senior management team with specialist
domain knowledge and plenty of expertise in financial
•
•
Exclusive partnership with a large North American broker
for executing foreign transactions
CBL has become amongst the country’s top brokerages by
gaining customers’ confidence and expanding its excellent
service-driven network. It now offers a full suite of brokerage
services to both local and international clients, all of which are
held to the highest international standards.
Competitive differentiation
Largest panel broking network with reputed merchant
Expansive network comprising of Head Office (Gulshan),
three branches (Motijheel, Dhanmondi and Nikunja) and
two extension offices (Bangla Motor and Motijheel) located
in Dhaka and one branch each in Chattogram and Sylhet
A year to remember!
CBL launched Bangladesh’s first dual-exchange online trading application,
, for
facilitating efficient and real-time trade execution through mobile, laptop, desktop PC, etc., from
anywhere in the world!
In a major recognition, CBL was awarded in two categories, ‘Best Retail Brokerage’ and ‘Best Analyst/
Commentators’ of the year 2022 by ASIAMONEY, a premium financial publication.
Annual Report 2022
207
Financial update
prevalent global trade conditions, such as post-pandemic
CBL established a cautious approach in capital conservation
amidst the challenging and volatile period of 2022, focusing on
cost optimisation, client retention, and pursuing new account
acquisition by utilizing its technical ascendency despite the
hurdles
supply chain disruptions, intensification of conflict
in Europe, local currency pressures, and inflationary
commodity prices
•
Bangladesh’s underlying value drivers are in place,
exhibiting sound prospects
Key trends
•
Despite obstacles that are mostly transitory in nature,
The year 2022 was a difficult one for the stock market.
DSEX reported a -8.14% return YoY in 2022 after two
straight years of outstanding positive returns. The
domestic capital market also mirrored the difficulties of
•
Therefore, Bangladesh Capital Market may witness
greater participation from value investors including frontier
and emerging market investors to capitalize on existing
investment opportunities at attractive valuation level
2023 roadmap
Release of Next Generation Trading Platform (NTP) version of
that will enhance user experience
Utilize our vast panel brokering network to augment business
volume on digital platforms
Improve client experience via the consolidation of and accessibility to all brokerage
services online
Re-orient efforts towards larger block trades for both international and
domestic customers, especially in the wake of successful closure of the
GSK Bangladesh-Unilever deal and other complex secondary market
transactions
Expand the retail customer base and portfolio value,
especially through enhancing discretionary portfolio
management services
Establish an extension office at a new location in
Dhaka
208
Annual Report 2022
Our Offshoots
CITY BANK CAPITAL
RESOURCES LIMITED
Providing top-notch investment banking services for the most prestigious institutions!
Business identity
•
Time-tested approach to risk-reward offering for
customers via products such as hybrid/balanced growth
products and systematic investment solutions
•
Large, high-quality portfolio of institutional/high-networth
investments offering increased business stability
City Bank Capital Resources Limited (CBCRL), a subsidiary
of City Bank and a public company limited by shares, was
established under the Companies Act, 1994 on 17 August
2009, with registration number C 79186/09. On December
6, 2010, the business received its Merchant Banking
License (Registration Certificate No. MB 54/2010) from the
Bangladesh Securities and Exchange Commission (BSEC).
CBCRL was founded to complement City Bank’s overall offering
by providing institutional clients with specialised merchant
banking services for capital mobilisation and organisational
growth. The company provides an extensive array of seasoned
investment banking services, such as issue management,
underwriting, portfolio management, and corporate advisory
services.
Seasoned management team
•
Strong investment banking staff with expertise in both
primary and secondary markets
•
Eminent Board that provides strategic guidance and
stewardship
3600 offering
•
Wide services bouquet that fulfil varied consumer
requirements:
Green Sukuk bonds
CBCRL has completed many ground-breaking transactions
and agreements in Bangladesh. The company has also
Perpetual bonds for Tier-I capital (for scheduled
banks)
successfully concluded a perpetual bonds transaction for a
Tier-II subordinated bonds (for scheduled banks)
listed bank and an NBFI in Bangladesh.
Competitive differentiation
•
Commercial paper
Preferred stock
Stability of performance
•
Zero coupon bonds
Debt restructuring
Profitability sustenance over the previous five years
Term loans/working capital loans
despite volatile capital markets
Zero negative equity of client assets in PMS (Portfolio
Issue management services (underwriting, agency,
and trusteeship)
Management Services)
Corporate consultative advisory
Financial update
CBCRL inked a number of high-profile investment banking agreements, which helped in revenue sustainment. Our financial
performance must be appraised in the context of the challenges faced by companies and the capital markets during the year.
Particulars (BDT mn)
2022
2021
Change in %
Revenue
425
726
-41%
Operational income
297
604
-51%
Annual Report 2022
209
Particulars (BDT mn)
2022
2021
Change in %
198
345
-43%
4,934
5,658
-13%
163
86
89%
Margin loan
1,100
1,377
-20%
AUM – at market value
82,544
82,844
0%
Turnover PMD
37,180
107,885
-66%
Net profit
Total assets
Proprietary investments in the capital markets - at cost
Key trends
An early revival of the economic cycle is anticipated in the
second half of the year 2023, led by progressive improvement
in terms of trade as a result of correction in depreciation of
the BDT and softening of inflation and commodity prices.
We anticipate the capital market to be very volatile in 2023,
although returns will be in single-digits. Companies that are
able to pass on expenses without diminishing demand may
generate double-digit returns. Political developments also
need to be closely watched, as the DSEX has traditionally
underperformed before to the national elections. Few broad
economic trends are given below.
•
DSEX, the benchmark index of DSE, closed the year at
6,206.8 points and saw an 8.1% (550-point) slump in
2022, vs. a remarkable 25.1% return in 2021. Throughout
the course of the year, BSEC and the central bank took a
number of initiatives to support the capital market, yet the
macroeconomic environment was not sufficiently favourable
to create any marked returns for investors
•
The government condensed its GDP growth forecast for FY23
from 7.5% to 6.5%. Multilateral organisations also reduced
their global growth projections considering the global and
local headwinds
•
Foreign currency reserves fell precipitously from $41.8 billion
to $33.8 billion owing to trade imbalance, significant outflow
on imported oil and gas, downward trend in remittances, and
the central bank’s sales of foreign reserves
•
Despite boosting monetary incentives to 2.5%, remittance
inflow shrank by 15.2% YoY to $21.03 billion in FY22, from
a record high of $24.8 billion in FY21. This reduction is
attributable to global slowdown, money being channeled
through informal/illegitimate sources, and volatility in the
forex market
•
In FY22, Bangladesh’s exports increased by 34.38% to $52.08
billion, mostly due to a record-breaking shipment of RMG. In
210
Annual Report 2022
July-November period of FY23, export revenues climbed by
10.88% to $21.9 billion from $19.8 billion during the same
period of FY22. As a result of the Russia-Ukraine conflict,
exports grew at a slower pace compared to the prior year
•
In FY22, Bangladesh’s total import payments increased
to $89.34 billion from $61.94 billion in FY21. After the
normalisation of the economy from COVID and the beginning
of the economic growth cycle, imports increased by 44.24%
to surpass $89 billion. In July-October period of FY23, imports
(C&F) grew 6.69% to $27.56 billion from $25.83 billion in the
same period of FY22
•
Bangladesh concluded FY22 with a record-breaking $18.7
billion CAD (Current Account Deficit), as export profits failed
to overcome the gap with soaring imports and a decline in
remittances. Bangladesh’s current account balance with the
rest of the world recorded a deficit for the sixth consecutive
fiscal year in FY22
•
Inflation soared to 9.52% in August 2022, the highest in a
decade, primarily due to consequences of the Russia-Ukraine
war that sent energy and food prices soaring. Bangladesh
Bank increased the repo rate five times in recent years, most
recently to 6% in an effort to manage the continued inflation
trajectory by restricting money flow
•
The yield on five-year and two-year BGTBs (Bangladesh
Government Treasury Bonds) reached 7.85% and 7.55% in
November, up from 6.5% and 4.88% in September, 2021,
respectively. The yield curve for Bangladesh’s treasuries
has now flattened as a result of increase in policy rates and
other regulatory actions that have tightened the monetary
environment to combat persistently high inflation
•
In October 2022, excess liquidity in the banking system
diminished by 22.2% annually to $1,695.56 billion. The
country’s banking system experienced a worsening liquidity
situation due to the central bank’s plan to sell $5.5 billion in
forex reserves in the open market from July-November 2022
Our Offshoots
2023 roadmap
The team is working on various forms of Sukuk bonds which can see fructification in the future
It is also directing efforts to engage in sourcing foreign funds, dual listing, identifying and arranging
strategic investors, M&A advising, business restructuring, loan syndication, project financing
arrangement, and acquisition financing structure, etc.
Even if just a few current transactions are successfully closed, CBCRL will continue to contribute
considerably to the total group profitability in the future.
City Bank Capital is going to introduce wealth management for HNIs for the first time in the
history of Bangladesh. This will help high net worth individual allocate their investable fund in
different asset class to maximize return.
City Bank Capital is also working in collaboration with City Alo to facilitate City Bank’s women
customers to make investment in secondary market with a preferential rate to attract more
woman investors to the market.
City Bank Capital is very much focus on Risk Based margin lending, as a result CBC has
no Negative Equity unlike other institutions operating in the market. CBC has plans to
onboard more margin clients to boost its revenue.
Corporate Advisory Team of CBC is seasoned with product knowledge and regulations.
With this core strength, CBC has done several new products in the market and
successfully closed those deals. Now CBC is working on some new products which can
open new revenue verticals. CBC corporate advisory team is expanding in business
focus from conventional products to new and innovative products and new markets
which will boots CBC revenues as well.
Annual Report 2022
211
CBL MONEY TRANSFER SDN. BHD.
Providing safe, secure and convenient remittance services, thereby bringing Bangladesh closer to
Malaysia!
Business identity
CBLMT, thus making it a wholly-owned subsidiary.
CBL Money Transfer Sdn. Bhd. (CBLMT) is engaged in money
Operational update
service (remittance) business. It is a private company limited
by shares incorporated under Malaysian regulations and
registered with the Companies Commission of Malaysia,
with Registration No. 769212-M. The company conducts
operations under the Money Service Business Act, 2011
through a Class-B License Serial No. 00362, issued by Bank
Negara.
CBLMT is a 100% subsidiary of City Bank.
The establishment of the company on 4th April 2013, City
Bank entered into an agreement to purchase 75% ordinary
shares of CBLMT, with an agreement to ultimately acquire
100% shareholding of the company. Hence, initially starting
out as a subsidiary of City Bank on 10th September 2013; on
8th June 2016, City Bank became the holder of 100% shares of
2022 was another successful year for CBLMT. The company
fast-tracked its presence in the digital remittance arena by
launching its mobile remittance application, “City Remit”. Using
City Remit, customers can remit funds to their destination
countries right from their dwelling places instead of having to
visit company branches. The service is available for all, except
for the first transaction for face to face verification.
CBLMT’s net profit increased by 70% YoY to MYR 2.56 million
in 2022, up from MYR 1.51 million in 2021. The company has
a network is 15 branches, including the Head Office branch.
Currently, CBLMT contributes 6% to the total inward remittance
volume (July 2021 to June 2022) to Bangladesh from Malaysia.
Our objective is to grow this share to double digits (10%+) in
the current year.
2023 roadmap
Facilitate remittance payment at select retail shops that are walking distance
for our customers from their dwelling places
Introduce Intermediary Remittance Institution (IRI) services, thus enabling other remittance
agencies across the world to use CBLMT’s secure network to remit money to a larger
complement of countries, including Bangladesh, Indonesia, the Philippines, Nepal, India,
Pakistan and Vietnam
Launch e-wallet for customers in Malaysia, thus facilitating them to remit
money to their destination countries from their e-wallet in the event they do
not have a bank account
212
Annual Report 2022
Our Offshoots
CITY HONG KONG LIMITED
With the dynamism of a start-up and the maturity of an institution, we ensure strong ties between
Bangladesh and Hong Kong through business and trade facilitation!
Strategic intent
Deepen trade ties between
Bangladesh and mainland
China
Contribute meaningfully to
Bangladeshi exports, one
of the mainstays of the
economy
Operational update
City Bank established its first Offshore Banking Trading Unit,
City Hong Kong Ltd (City HK), in Hong Kong in 2019. Starting
with a small financial base, the company gradually increased
its capital through new account acquisition and, in a notable
milestone, achieved its first-ever net profit in the fiscal year
2021 within a short period since inception. This has contributed
to establishing City HK as an independent, profitable entity of
City Bank, demonstrating the maturity of its product offering
and business strategy.
City HK was founded with the goal of establishing City Bank’s
worldwide footprint in one of the world’s major economic
hubs, Hong Kong. Hong Kong is an important economic partner
for Bangladesh since it is a large importer of products and
services. Furthermore, some multinational retail chains with
regional headquarters in Hong Kong are key customers of the
RMG sector of Bangladesh. Additionally, trade and business
between China and Bangladesh is large and growing, with
enormous future potential. In this context, City HK sees itself
as a link between Bangladesh and new economic prospects in
Hong Kong and mainland China. These considerations make
Hong Kong an appropriate location for City Bank to establish
a presence.
City HK is collaborating with the local business community to
develop a niche trade opening to facilitate international trade
by advising on Letter of Credit (LC), handling documentary
collection, and bill financing (discounting, UPAS) against
Develop and reinforce
presence of City Bank in a
major international financial
hub
Explore new products and
solutions to accelerate crossborder trade and commerce
LCs issued by City Bank and the other commercial banks in
Bangladesh.
Financial highlights, 2022
• Total assets expanded by 62% to HK$ 76.61 mn
• Interest income witnessed significant increase by 134% to
HK$ 3.83 mn
• Total revenues rose by 128% to HK$ 6.31 mn
• Net interest income (NII) increased by 72% to HK$ 1.38 mn
• Operating cost increased only marginally by 0.6% to HK$
3.3 mn, ensuring strong cost discipline that contributed to
profitability sustenance
• Net profit declined by 31% to HK$ 0.56 mn. The decline
is attributed to the hike in LIBOR and global inflation that
triggered a 193% increase in interest expenses, which dented
profitability
Key ratios
Metric
2022
2021
Return on assets (ROA)
0.7%
2%
Return on equity (ROE)
9%
30%
Cost-to-income
86%
80%
Operating profit margin
14%
20%
Net profit margin
15%
20%
Annual Report 2022
213
Significant increase in borrowing cost and sharp decline in exchange gain triggered net profit moderation in 2022, while also
impacting other key financial metrics.
2023 roadmap
City HK aims to foster a more client-centric business model, enhancing revenue-accretion potential and
thus strongly establishing itself as a sustainable subsidiary of City Bank and an essential financial services
platform facilitating trade and commerce between Bangladesh and Hong Kong/China. The company also
aims to continue on its cost optimisation journey, hence utilising it as a strategic lever of profit enhancement.
As part of the future roadmap, City HK will also extend its client base and explore new
financial products and solutions in order to service the needs of a large swathe of
enterprises, hence expanding its income-generating potential, with the overarching
objective of developing a worldwide network for City Bank.
214
Annual Report 2022
Our Risk Governance
OUR RISK GOVERNANCE
Annual Report 2022
215
I have always believed that value creation is contingent upon risk supervision
and the correlation is only getting stronger and stronger with each passing year.
Thus, organisations that have a sound, adaptable and adjustable risk strategy will
be the ones that will be able to navigate an increasingly uncertain and complex
environment in the path of sustainable value creation.
Mesbaul Asif Siddiqui
Chief Risk Officer
216
Annual Report 2022
Our Risk Governance
CHIEF RISK OFFICER’S
REVIEW ON RISK MANAGEMENT
BUILDING RESILIENCE FOR SUSTAINABLE AND
RISK-MITIGATED GROWTH
Dear Shareholders,
The year 2022 ushered in a step-change in risk assessment
with the occurrence of unprecedented events thought
impossible in the recent past, such as the COVID-19 pandemic
and the war between Russia and Ukraine. The Bank had
to cultivate an “anything-is-possible” mindset to ensure
organisational adaptability and future-readiness, especially
with the manifestation of new risks and intensification of
prevalent risks.
I am proud that City Bank is one such organisation as, despite
continued uncertainty in our operating environment, we have
demonstrated sheer resilience in our ability to consistently
manage emerging risks, in line with our risk appetite.
Before I share my perspective on Bank-specific risk
assessment, I have provided a macro-overview of the broader
developments in the external environment and the key actions
taken by the Bank with a view to protect business viability and
ensure better superintendence of risks internal to the Bank.
Thus, the following tables are supplementary information to
the overall context of risk management and are in line with our
need to provide a balanced overview of the macro and micro
risks facing the organisation and our accompanying mitigation
strategies.
Annual Report 2022
217
ECONOMIC UNCERTAINTY 2022
Key drivers
Implications to City Bank
•
Uncertain economic growth amid
rising inflationary pressure
•
Significant weakening of global
financial markets
•
•
GEOPOLITICAL ESCALATION
2022
Key drivers
•
•
2022
Key drivers
•
Accelerating digital adoption and •
technology innovation
•
Heightened regulatory expectations
on financial system stability and
•
security against cyberattacks
218
Annual Report 2022
Key actions taken, 2022
Slower economic activities due to •
cautious business and consumer
sentiment that could lead to below- •
potential profitability
Potentially weaker asset quality
Facilitated
making
data-driven
decision-
Continuously delivered actionable
risk insights
•
Proactively monitored economic
developments to fine-tune the
business strategy
•
Identified emerging risks through
stress tests and scenario analysis
2021
Implications to City Bank
Geopolitical tensions, primarily due
to the Russia-Ukraine war has led
to supply chain disruptions, inflation
and market volatility
DIGITAL DISRUPTION 2021
Slower credit growth due to weaker
business and consumer confidence
Key actions taken, 2022
•
Enhanced communication to provide
timely and insightful information
on risks/opportunities for better
decision-making
•
Kept a constant surveillance on
global developments
2021
Implications to City Bank
Key actions taken, 2022
Heightened need for resilience in •
IT systems in light of increasing
dependence on digital platforms and
new technologies
Took steps for the Bank to stay
competitive, improve
customer
experience and remain operationally
resilient
•
Monitored
adequacy
and
effectiveness of internal controls
Potential damage to reputation and
resilience
2022
Key drivers
•
Increasing operational challenges
triggered by:
Potential loss in revenue and
reputation from potential failure to
maintain operational resilience
•
Strengthened the Bank’s operational
resilience
through
business
continuity planning
•
Possible operational impact due to •
data breaches leading to increased
costs in recovery
Focused
on
employee
risk
awareness through meetings and
information sessions
Tech talent shortage amid digital
•
transformation, requiring deep tech
skills
2022
Key drivers
•
•
Key actions taken, 2022
•
- New ways of agile working
SUSTAINABILITY EXPECTATIONS
2021
Implications to City Bank
- Shifting client preference towards
digital channels and products
•
Our Risk Governance
OPERATIONAL CHALLENGES
Inability to hire and retain the right
talent
2021
Implications to City Bank
Key actions taken, 2022
Heightened regulatory expectations •
and
reporting
requirements
related to sustainability from a risk
governance standpoint
Heightened credit risk among clients •
who do not adopt ESG practices
or are exposed to climate change •
impacts
Promoted green and sustainable
finance
•
Increased market risk due to shift •
in investor preference away from
carbon-intensive sectors or those
with poor ESG record
•
Impact of climate change
operational continuity
Developed for launch the Bank’s
inaugural ESG report, emerging
as amongst the few banks in the
country to develop such a voluntary
publication
Greater interest and expectations
on sustainability practices, including
ESG
Core risk management areas in 2022
Asset quality management
Throughout 2022, increased operational cost was a major
concern for businesses. Both commodity price and exchange
rate movement contributed to the elevated cost of goods and
services. This in turn stressed margin and repayment ability of
businesses and accentuated credit risk challenges.
We closely monitored the performance of our clients to
understand their business requirements and risk exposures.
We continually assessed client-wise performance and
readjusted our credit facilities to ensure their business
continuity and sustenance of our portfolio quality.
on
Incorporated ESG risk considerations
in credit assessment
Notably, the Bank has always been at the forefront in offering
stimulus packages of the government and central bank, which
really supported our clients to sustain in the COVID and postCOVID challenging scenario. The upfront and robust stimulus
packages and policy support provided by the government and
Bangladesh Bank are the key factors behind Bangladesh’s
exemplary resilience in withstanding the economic challenges
inflicted by the pandemic.
We continue to cautiously grow our portfolio, calibrating our
sector-wise exposure to address the changing risk scenario.
We emphasised on growth diversification across our various
business segments to balance the overall concentration in
our portfolio. As part of our current business strategy, we
Annual Report 2022
219
continued to rationalize our corporate exposure, and grew
sustainably in SME, micro and retail portfolios.
Overall, the Bank has been successful in reducing
concentration in the corporate segment as a percentage of
the total loan portfolio by 11 percentage point from 2018
to 2022. However, corporate remains a dominant business
segment and a vital strength for the Bank as our clientele
comprise large organizations with deep shock absorption
capacity. This portfolio includes reputed companies engaged
in national priority sectors, such as power, where revenue is
backed by government PPAs (power purchase agreements).
As for the national economy, RMG is also the leading exportoriented sector for us where we maintain relationship with
highly compliant firms with established business history.
SME and microcredit clients faced more difficulty in absorbing
economic shocks. Thus, we kept them under constant
surveillance and assisted enterprises putting sincere efforts
in business recovery with extended facilities, in line with
the central bank’s policy support and stimulus packages.
While we continued to grow in retail and cards segments,
we meticulously considered the impact of inflation on target
customers and adjusted our underwriting criteria to ensure
proper client selection.
We prioritised portfolio monitoring in 2022 and strengthened
early alert processes through joint collaboration with relationship
teams, risk teams and the senior management to develop
account-wise plans to enhance recovery. Despite heightened
challenges and default risk, the Bank’s gross NPL ratio has
significantly improved to 3.9% in 2022, from 4.9% in 2021.
To expedite recovery through legal settlement, we reorganised
the legal team to allocate dedicated personnel for addressing
cases from different business segments. The Bank also
established a cross-department committee for reviewing
rationality of account-wise recovery plans to ensure optimum
outcomes. To further fortify the Bank’s future health against
unforeseen events, we earmarked additional provision after
meeting regulatory requirements, which raised our provision
coverage ratio to 104.7% in 2022, up from 90.1% in the prior year.
Market and liquidity risk management
Exchange rate movement and tightening US$ liquidity were
major risk concerns in 2022 for banks and businesses. Making
import payments was challenging due to US$ supply crunch,
which we managed by deferring payment obligations through
our robust affinity with international counterparties. This
apart, borrowing rates in the international interbank markets
220
Annual Report 2022
rose and further elevated the cost of dollar funding. With our
main source of foreign currency comprising export proceeds
and wage earner’s remittance collection, our liaison with
prominent exchange houses and our wholly-owned subsidiary,
CBL Money Transfer Sdn. Bhd., in Malaysia have been
instrumental in mobilizing foreign currency to help manage the
deficit. Additionally, we were able to access the necessary fund
from foreign correspondent banks, capitalizing on our strong
relationship with renowned multilateral institutions, such as
IFC, ADB and IDB. We will continue to focus on expanding our
export-oriented clientele and remittance inflow in 2023.
We put utmost emphasis in maintaining healthy liquidity
under this stressed environment. Liquidity profile of the
Bank is minutely monitored with prospective analysis of fund
inflow-outflow in local and foreign currency. We were thus
able to ensure continuous liquidity coverage, well above the
regulatory threshold.
Capital resilience
City Bank understands the critical role that capital plays as
a shock absorption cushion for rainy days and in supporting
growth and we will continue to build capital strength through
profit retention, stock dividend and additional provisioning. We
rigorously conduct stress tests on our capital resilience under
different scenarios, including severe economic downturns.
The Bank has consistently maintained Basel requirement
for capital adequacy, with CRAR growing to 14.5% in 2022
(solo-basis) against the regulatory requirement of 12.5%. In
2022, City Bank achieved 14.1% ROE, which is one of the best
performances in the industry.
Environmental and social risk
We recognize the critical importance of addressing
environmental and social risks for sustainable growth. In this
regard, we have developed a comprehensive Environmental
and Social Risk Management (ESRM) framework composed of
guidelines, policies and processes that define the boundaries
of the Bank's lending principles. Further, our Environment
and Social Governance (ESG) policies and strategies integrate
the performance criteria of Bangladesh Bank, IFC and global
best practices. We further integrated ESRM into our existing
credit risk management frameworks, such as in the Credit
Risk Management Policy (CRMP) to make it more effective
and cohesive.
Our ESRM framework is overseen by the Board’s Risk
Management Committee (BRMC), which directs the
Sustainable Finance Committee (SFC) to strategize and
as 24/7 transaction monitoring, merchant and e-commerce
transaction monitoring, agent banking surveillance, and
reviewing product features to identify potential vulnerabilities.
We are also building fraud risk awareness through regular
training programs and mass communication over email, SMS
and social, print and electronic media.
To propel industry-wide progress on sustainable finance,
Bangladesh Bank has set green sustainable finance
disbursement targets for banks. We acknowledge the unique
contribution of the central bank in promoting the cause of
sustainable finance. City Bank’s green finance disbursement
and sustainable finance disbursement grew to BDT 4,910 mn
and BDT 66,230 mn, respectively, in 2022, up from BDT 2,680
mn and BDT 49,180 mn in 2021. Along with prioritizing digital
financing and financial inclusion, we are also focusing on
empowering women entrepreneurs to achieve the Sustainable
Development Goals.
City Bank leads the domestic market in digital banking. As
we leveraged innovative technologies and digitalization to
improve client experience, we ensured that our technological
infrastructure remains fully capable to safeguard our digital
operations, transactions and information. We are constantly
reassessing our capabilities and making necessary investment
to upgrade our protective suite of amenities to address new
cyberattack threats. Our robust cybersecurity infrastructure
continues to successfully protect our business and reputation
from any untoward incident.
On the front of climate action, we are aligned with the Paris
Climate Agreement and aim to achieve net-zero emissions by
2050, and joined United Nations Net Zero Banking Alliance
(NZBA) in 2022 to facilitate this transformation. City Bank
has been recognized by the central bank as one of the top10 sustainable banks in the country for last two consecutive
years. Additionally, the Bank was jointly awarded by German
Agency for International Cooperation (GIZ) and BIBM, for our
commitment towards sustainable practices. Furthermore, City
Bank was also recognized as the Best Sustainable Finance Bank
in Bangladesh by Global Finance, a US-based leading financial
publication, in 2022. These recognitions are a testament to
the Bank's unwavering dedication to incorporating sustainable
practices in all aspects of its operations and its commitment
to creating a positive impact on the environment and society.
Other risks
In 2022, we revitalized our emphasis on enhancing the
robustness of operational risk management activities.
City Bank’s Operational Risk Management team has been
undergoing a transformation as part of the Quantum Leap
Project II with IFC. We are in the process of reinforcing explicit
roles and responsibilities of Three Lines of Defence and key
ORM tools, e.g., Risk Control Self-Assessment, Key Risk
Indicators and Incident & Loss Data Management to ensure
that the Bank is able to cope with and adopt a more diverse
and effective strategy to tackle operational risks.
We have a dedicated team to proactively identify, prevent
and minimize any kind of fraud. The Bank has established
a number of measures to detect fraud at early stages, such
Risk governance
City Bank possesses a strong risk governance framework
steered by the Board of Directors. In 2022, BRMC closely
supervised the Bank’s risk management activities and
ensured rapid response to emerging risk issues. To ensure
comprehensive risk assessment, BRMC sets quarter-byquarter KPIs for progress in management of NPL, portfolio
concentration, recovery through legal settlement, capital,
liquidity, sustainable finance, etc.
At management level, the Executive Risk Management
Committee (ERMC) hosts the converging platform for
enterprise-wide risk functions and guides and monitors risk
management activities at a granular level and with higher
frequency. The Enterprise Risk Management team, under
the Risk Management Division, diligently supports the risk
governance and management platforms through collaboration
with all stakeholders in implementing the risk agendas.
Internal Control and Compliance (ICC) is an essential partner
in our risk infrastructure. The ICC team actively monitors
compliance across key risk areas, such as credit, asset-liability,
foreign exchange, money laundering, IT and environment &
social risks.
We rigorously monitored our actual risk exposures against
set appetite, and we reassessed and rebalanced our risk
appetite in relevant cases as market dynamics changed.
We are constantly reviewing and updating our risk policies
and frameworks to address new developments in the risk
environment. We set our policies with stricter risk criteria
than suggested by regulatory guidelines to ensure stringent
regulatory compliance.
Annual Report 2022
221
Our Risk Governance
supervise all activities related to the environment, green
finance and sustainability through the Sustainable Finance
Unit. In addition, City Bank has an additional ESG committee
known as the Emission Reduction Steering Committee (ERSC),
which oversees the carbon emission reduction strategies for
both our lending portfolio and our own operations.
In 2022, we developed the Bank’s Recovery Plan through a
risk-based assessment of the organisation’s ability to recover
from a stressed situation. The objective was to ensure the
Bank’s viability even in severe stress events, without any
supervisory or government support. It includes methodology
of identifying risks and action plans to bring back the Bank’s
financial and operational strength amid risk events.
City Bank is one of the very few banks in Bangladesh which is
rated by a renowned global rating agency, Moody’s Investors
Service, which reflects the Bank’s excellent governance
and surveillance capacity to accommodate their rigorous
assessment process.
Risk roadmap
The ongoing economic challenges are expected to continue in
2023. Conscious growth with strong vigilance on clients and
proactive assessment of our risk environment will continue
to be our core attitude. We aim to further enhance our
responsiveness to shifts in the market through re-adjusting
our underwriting considerations and balancing our exposures.
We will continue our emphasis on risk-weighted efficient
exposures to facilitate capital optimization.
Our commitment to advance in environment and social
risk governance will remain in our central focus. City Bank’s
commitment to ESG was lauded by the central bank which
honoured the Bank as one of the top banks for sustainable
finance in 2022. We are the first Bank in the country to
introduce digital nano loan, which is an end-to-end automated
222
Annual Report 2022
lending process, in partnership with a leading mobile financial
service provider in the country. We will keep stepping up in
our actions to go paperless and reduce our carbon footprint
through product and process innovation. We will continue
building core resilience in mitigating operational, fraud and
technological risks.
While the global economic outlook remains challenging
for the current year, as a part of one of the fastest growing
emerging markets of the world, we remain confident about
our sustainable growth prospects. Our vibrant nation has
remained ahead of its main Asian peers, such as Vietnam,
India, the Philippines, Thailand and Indonesia, with an average
GDP growth of 6.4% between 2016 and 2021.
Our robust business community exudes an energy and
optimism that puts our nation at the forefront of global growth.
As a first-generation bank of Bangladesh, we will continue to
be a committed partner in this growth trajectory – just as we
have been for last 40 years.
Thank you for your support and cooperation in facilitating City
Bank to build resilience for sustainable and risk-mitigated
growth.
Sincerely,
Mesbaul Asif Siddiqui
DMD and Chief Risk Officer
Primer
The risk landscape for the financial services sector continues
to shift radically and rapidly. However, the one thing that has
remained unchanged is that banking remains fundamentally
about the management of risk.
Despite the challenging risk landscape, City Bank’s approach
to risk management has demonstrated significant agility in
managing risk. Risks are becoming increasingly interconnected
and emerging risks are cutting across and impacting multiple
risk categories, including the traditional banking risks, such
as capital, credit and liquidity risks, thus calling for increased
integration of risks and risk management.
We are committed to creating sustainable value through
managing material risks to which the Bank is exposed, as well
as maximising value-adding opportunities that can be pursued
while managing any downside risks.
Positioning the Bank for long-term success
At City Bank, prudent and well-judged risk management is
an important foundational aspect that underpins the dayto-day management of the Bank’s operations and supports
the achievement of the organisation’s long-term strategic
objectives. Staying firmly anchored to its core risk principles,
the Bank has adopted a precautionary approach to ensure that
its risk management activities continue to evolve at a steady
pace, in response to regulatory requirements, macroeconomic
developments, best practices and industry trends that emerge
both in the domestic and global environment.
Strengthened by the decades of trust and faith our customers
and other stakeholders have reposed in us, our operating
values and risk governance mechanisms continue to push us
to the forefront of excellence, thus positioning City Bank to
take the lead in the fast-transforming financial services sector
of Bangladesh.
Operating in one of the most dynamic industries, City Bank’s
risk perimeter as well as the institutional risk management
policies, procedures, controls and reporting principles are
regularly reviewed and updated to confirm their applicability
and compliance to broader economic trends as well as
regulatory requirements and industry best practices.
In this context, the Bank seeks to manage its risk profile
prudently, in line with the Board-approved risk appetite
that sets out the limit framework for managing the most
material risks. This limit framework or risk perimeter plays a
vital role in cascading the Bank’s risk strategy down across
all levels of the business and, together with the Bank’s
enterprise risk management framework, serves as the
foundation for ensuring that all material risks are identified,
well-comprehended, accurately measured and proactively
managed in order to safeguard the Bank’s financial strength
and reputation as well as retain the public trust in the brand.
A strong risk culture is also a vital part of City Bank’s strategic
approach to risk management. The Bank has truly fostered a
robust risk culture where every employee is fully aware of his
or her responsibility regarding risk management, promotes
prudent risk-taking, and paves the way for risks to be detected,
assessed, reported and addressed in a timely manner.
Improving organisational
sound risk governance
navigability
through
At City Bank, risk governance involves defining the roles of
all employees, segregating responsibilities, and assigning
authority to individuals, committees and the Board for
approval of core risks, risk limits, exceptions to limits, risk
reports, and also for general oversight. It enables decisions
relating to risks to be taken and implemented for the
management and oversight of risk within the risk appetite and
the risk tolerance levels and for institutionalizing a strong risk
culture. It enables our Management Committee or ManCom
to undertake risk-taking activities more prudently and with a
sense of awareness and caution.
The Bank’s risk management framework comprises
strong governance, sound policies & methodologies, and
professionals, supported by fit-for-purpose technology,
infrastructure and data management. This framework is
underpinned by a strong corporate culture that emphasizes on
accountability, ownership, integrity and high ethical standards.
The Bank aligns its operating standards that are consistent
with its corporate strategy and risk appetite, and ensures that
these remain well-communicated across the organization.
The Board of Directors of the Bank has apex responsibility
for the effective management of risk. The Board establishes
corporate strategy and approves the risk appetite within
which the ManCom and others execute the strategy.
The Board Risk Management Committee (BRMC) is the
designated Board committee overseeing risk management
Annual Report 2022
223
Our Risk Governance
RISK MANAGEMENT REPORT
matters. It ensures that the Bank’s overall risk management
philosophy and principles are aligned with the corporate
strategy and within the approved risk appetite. BRMC
has oversight of credit, market, liquidity, information and
cybersecurity, operational, conduct, legal, regulatory, strategic,
ESG and fraud risks, as well as any other category of risk that
may be delegated by the Board or deemed necessary by the
committee. It also ensures that the overall necessary risk
management framework is in place and remains effective.
risk types, and BRMC regularly review the Bank’s risk drivers,
BRMC provides quantitative and qualitative guidance to
major business units and risk functions for developing risk
appetite through external and internal analysis. The senior
management, functional risk committees covering principal
approved policies and processes. The Bank’s risk management
risk profiles across major lines of business and risk types, risk
management frameworks and major risk policies, as well as
compliance matters.
Management-level
risk
committees
superintend
risk
management activities across the Bank. At the operational
level, business teams, risk teams, operation teams and audit
and inspection ensure that the Bank is operating in line with the
structure is pivoted around the Chief Risk Officer (CRO). The
CRO directly reports to the BRMC with a dotted reporting line
to the MD & CEO.
Risk governance at City Bank
Board Level
Board of Directors
Board’s Risk Management Committee
Board Audit Committee
Management Level Committee
Management
Committee
Extended MANCOM
Executive Risk
Management
Credit Risk
Management
Asset Liability
Management
Sustainable Finance
Committee
Operational Risk
Management
Investment
Committee
Special Situation
Management
Deteriorating Credit
Management
Three lines of Defense
Business Teams
Supporting Teams
Risk Teams
Internal Control &
Compliance
Role of the Board of Directors
For this purpose, they serve the following major roles:
The Board of Directors of City Bank supervises the entire risk
management system by setting the target risk profile of the
Bank, appetite for core risk areas, and the tone and strategy
for risk management through different policies and guidelines.
As the strategies go into delivery, the Board oversees the
actions and changes set in motion by the risk management
implementation.
•
Establishing organizational structure for enterprise risk
management
•
Assigning sufficient authority and responsibility
•
Continuously monitoring the Bank's performance and
overall risk profile
•
Ensuring the formulation, review and implementation of
appropriate policies
224
Annual Report 2022
Defining and reviewing the risk appetite, tolerance, limit, etc.
For this purpose, they serve the following major roles:
•
Ensuring sustenance of adequate capital and provisions
•
•
Monitoring the function of the Board Risk Management
Evaluation of appropriateness of compliance culture and
standards
•
Communicating the importance of internal control and the
administration of risk
foreign exchange operations, and securities portfolio
•
Review the implementation of internal control strategies
management functions
•
Roles of the Board’s Risk Management Committee
(BRMC)
Review reports relating to fraud, forgery and deficiencies
in internal control, and necessary corrective action
•
Review financial statements whether they are prepared
in accordance with the existing regulations and standards
BRMC is the Board’s primary front to review, guide, manage
•
Examine the efficiency and effectiveness of the internal
audit function
•
Submit a compliance report to the Board on a quarterly
basis on corrective actions taken and irregularities
detected by internal and external auditors and inspectors
of regulatory authorities
•
Solicit assessment reports from external and internal
auditors
Committee
•
Ensuring that internal audit reviews credit operations,
and reduce various risks resulting from the implementation
of strategies and action plans approved by the Board. BRMC
also ensures that the management takes proper steps to
identify, measure and reduce risks, and maintain sufficient
capital and provisions to comply with all internal and
regulatory standards.
For this purpose, they serve the following major roles:
•
Risk identification and development of a comprehensive
control strategy
•
Adoption of organizational structure, embedding risk
governance across the organization
•
Review and adoption of the risk management policy
•
Risk reporting for archival and future referencing
•
Implementation
supervision
of
the
overall
risk
management policy
•
Miscellaneous
responsibilities,
including
quarterly
reporting of resolution and recommendations to the
Board, ensuring compliance with regulatory directives, and
Role of the Executive Risk Management Committee
(ERMC)
Executive Risk Management Committee is a senior
management platform that steers the implementation of
policies, strategies and tactics recommended by BRMC and
approved by the Board. In addition to regular risk parameters,
the committee also closely monitors any emerging risk
pattern/s, communicates the same to the concerned
departments, and ensures effective steps are being taken to
control the risk factors.
Major roles of ERMC are given below:
•
Identifying, measuring and managing existing and
potential risks
•
Ensure compliance with the decisions taken by the Board/
BRMC
Role of the Audit Committee of the Board (ACB)
•
Submitting proposals, suggestions and summary of ERMC
meetings
The Audit Committee of the Board provides independent
•
Implementing the decisions of BRMC
•
Assessing adequate capital requirement in line with risk
exposures
•
Determining risk appetite in line with strategic planning
•
Contributing to formulation of risk policies
•
Reviewing risks involved in new products
evaluation of reports by internal/external auditors
•
Any other responsibility as assigned by the Board and
Bangladesh Bank
oversight of the Bank’s financial reporting, non-financial
corporate
disclosures,
internal
control
systems,
and
compliance with governing rules and regulations, in accordance
with Bangladesh Bank’s guidelines and Bangladesh Securities
and Exchange Commission’s
Governance.
notifications on Corporate
Annual Report 2022
225
Our Risk Governance
•
Major risk committees
The Bank has dedicated platforms for specific risk areas to ensure proper alignment of risk management functions with the Bank’s
overall risk strategy. The following table depicts the major risk committees that help ensure effective risk governance and their
key objectives:
Board’s Risk Management Committee
To ensure that Bank-wide risks are managed within the risk strategy and
appetite established by the Board of Directors.
Executive Risk Management Committee
To monitor activities of the Risk Management Division responsible for
integrated risk management across the Bank.
Asset Liability Management Committee
To maintain a balance between liquidity and profitability of the Bank and
containing liquidity risk and interest rate risk at the desired level.
Contingency Liquidity Management Team
To manage the stressed or contingency liquidity situation.
Credit Risk Management Committee
To identify the possible risks for different credit transactions, and ensure
lending proposals are approved in line with the Bank’s business strategy and
keeping asset quality at expected levels.
Deteriorated Credit Management Team
To direct overdue and non-performing exposures management.
Operational Risk Management Committee
To oversee the operational risk management activities.
Supervisory Review Process (SRP) Team
To review the Bank’s internal capital adequacy assessment.
Sustainable Finance Committee
To review sustainable financing activities of the Bank.
Special Situation Management Committee
To review and decide the recovery action plans of the Bank.
Investment Committee
To decide and monitor investment management activities of the Bank.
Three lines of Defence
All employees are responsible for identifying and managing risk; their accountability is embedded in our corporate culture and
robust internal control environment. This is operationalized through a three-line or three-tier defense structure, which clearly
delineates the roles, responsibilities and accountability of risk ownership.
First Line
Second Line
Third Line
Day-to-day Risk Management
Risk and Control Oversight
Independent Assurance
Business and Support Units:
Risk and Control Function:
Audit:
•
Own and manage risks arising from •
their business activities on a day-today basis.
Independently
and
objectively •
assess the risk-taking activities of
the first line.
•
Carry out business activities that are •
consistent with the Bank’s strategy
and risk appetite.
Establish relevant risk management
frameworks, policies, processes and •
systems.
Operate within the approved •
boundaries of our policies and limits,
and comply with applicable laws and
regulations.
Provide independent identification,
assessment,
monitoring
and
reporting of the Bank’s risk profiles,
portfolio
concentrations
and
material risk issues.
•
226
Annual Report 2022
Independently assure the adequacy
and effectiveness of the Bank’s risk
management and internal control
systems.
Evaluate the overall risk awareness
and control consciousness of
the management in discharging
its supervisory and oversight
responsibilities.
Our Risk Governance
Risk management policies and guidelines
Core Risk Policies
Guidelines / Manuals
Other Major Policies
•
Credit Risk Management Policy
•
Risk Management Policy
•
Risk Appetite Statement
•
Asset Liability Management Policy
•
Recovery Policy
•
Credit Instruction Manual
•
Internal Control and Compliance Policy
•
Settlement Policy
•
CAD Operation Manual
•
Foreign Exchange Risk Management Policy
•
•
Insurance Coverage Guidelines
•
Money Laundering & Terrorist Financing Risk
Management Policy
Operational Risk
Management Framework
•
Valuation Policy
•
Rescheduling Policy
•
Product Programme Guidelines
•
Information Security Risk Management Policy
•
Interest Waiver Policy
•
Environmental & Social Risk Management Policy
Risk appetite statement
major risk areas in RAS include funded and non-funded loan
The Bank’s objective is to manage its risks prudently and
sustainably for the long-term viability of the organisation. To
that end, the Board has established the Bank’s risk appetite,
which defines the level and nature of risks that it is willing to
take in the conduct of its business on behalf of shareholders,
while maintaining commitments to customers, debt holders,
employees, regulators and other stakeholders. Business
plans are developed taking into account the forward-looking
operating environment and potential downside risks assessed
against the risk appetite.
Risk Appetite Statement (RAS) is approved by the Board. The
growth, sectoral exposure, concentration limit, asset quality,
market risk, liquidity risk and operational risk parameters. The
RAS for 2022 was approved by the Board in its 608th meeting
(memo BD-22182/2022).
Before placing the risk appetite for Board approval, RAS is
reviewed by BRMC, ERMC and all relevant stakeholders.
Status against the set limit is monitored on a regular
basis, and the status of parameters in the statement is
communicated monthly to all relevant business and risk
stakeholders. Potential issues are escalated to the Executive
Risk Management Committee (ERMC) on a monthly basis.
Risk areas
Risk limit
Dec'22
Non-Performing Loans
Not more than 4.50%
3.9%
Off-balance sheet exposure to total assets
Not more than 56.30%
43.1%
Amount of loan outstanding with acceptable rated Not less than 100%
customers (risk weight up to 100%) to the amount
that lies with total rated customers
100%
Value at Risk (VAR) for equity exposure
Not more than BDT 130 mn
26.85
Value at Risk (VAR) for NOP position
Not more than BDT 52.50 mn
43.32
Commitment limit
Lowest amount of 49.5% of total assets, 499.5% of
eligible capital, and 249.5% of high quality assets
194.3% of HQLA
Wholesale borrowing guideline (WBG) limit
80% on fortnightly average basis with maximum two
deviations (not more than 90%) in a particular fortnight
13.5%
Loss due to internal and external fraud
Not more than BDT 5 mn
CRAR (solo)
Not less than 14.5%
14.5%
AD ratio
Not more than 85.00%
83.2%
Liquidity Coverage Ratio (LCR)
Not less than 110%
220.1%
Net Stable Funding Ratio (NSFR)
Not less than 105%
103.1%
0
Annual Report 2022
227
Risk management process of the Bank
Risk Managemnt Process
Assessment
Identification
Monitoring and Reporting
Treatment
Step 1: Identify the risk
Step 4: Risk monitoring & reporting
The first step in the risk management process is to identify
all the events that can negatively impact the objectives of the
organisation. Once these events are identified, they are listed
in the risk matrix and later captured in the risk register. A risk
is characterized by its description, causes and consequences,
qualitative assessment, quantitative assessment and
mitigation plan. It can also be characterised by who is
responsible for its action. Each of these characteristics
are necessary for a risk to be valid. In order to be managed
effectively, the risks identified must be as precise and
specific as possible. The title of the risk must be concise, selfexplanatory and clearly defined.
Risks and their treatment plans need to be monitored and
reported upon. The frequency of this depends on the criticality
of risk. By developing a monitoring and reporting structure it
ensures that there are appropriate forums for escalation and
that appropriate risk responses are being implemented.
Step 2: Risk assessment
There are two types of risk assessments: qualitative and
quantitative. A qualitative assessment analyzes the level
of criticality based on the event’s probability and impact. A
quantitative assessment analyzes the financial impact or
benefit of the event. Both are necessary for a comprehensive
evaluation of risks.
Step 3: Risk treatment
In order to treat risks, the Bank must first identify its strategies
for doing so by developing a treatment plan. The objective of the
risk treatment plan is to reduce the probability of occurrence of
the risk (preventive action) and/or to reduce the impact of the
risk (mitigation action). Depending on the nature of the risk, a
response strategy is defined. Normally, risk treatment includes
accepting, mitigating, transferring and avoiding risk.
228
Annual Report 2022
Risk management at CBL
Credit risk management
The BRMC intensively monitored asset portfolio of the
Bank throughout the year 2022. The management updated
the committee regularly on stressed areas, and effectively
executed the Board’s vision and strategic guidance under joint
collaboration with business and risk managers.
With in-depth cause and effect analysis on concerned parts
of the portfolio, extensive account management strategies,
recovery plans and exit plans were developed and executed
with utmost priority. As a result, non-performing asset ratio
has improved throughout the year. Moreover, the Bank
worked relentlessly on diversifying its portfolio to reduce
concentration risk. It also maintained its large loan portfolio
well below the regulatory limit.
Market risk
The Bank regularly monitors its capital market exposures,
interest rate sensitive exposures, and foreign exchange
exposures throughout the year. The BRMC, ALCO and ERMC
proactively observed the changing market scenarios and
The Board and Board’s Risk Management Committee have
the apex authority to set market risk management strategy.
The Board has delegated its technical functions to the
Assets & Liabilities Management Committee, Executive Risk
Management Committee and Investment Committee. To
administer technical policies concerning financial models
and risk management techniques and to implement the
Bank’s market risk management policies, procedures and
systems, the Asset-Liability Management Desk, Market Risk
Management Desk and Treasury Middle Office are functioning
in collaboration with each other.
The Bank has a Foreign Exchange Risk Management Policy,
Asset Liability Management Policy and Investment Policy, duly
approved by the Board. These policies work in unison with
the Board-approved Market and Liquidity Risk Management
Framework, Risk Management Guidelines of CBL, and other
internal risk management policies. These policies outline the
management process of market risk factors.
Liquidity risk
The Treasury, Risk Management Division, and other relevant
teams remained seamlessly vigilant to maintain balanced
liquidity for the Bank throughout the year. BRMC regularly
reviewed liquidity management plans, and advised to maintain
buffer for major liquidity health indicating ratios to safeguard
the Bank against any sudden shock. The Bank successfully
complied with liquidity regulations and instructions of the
central bank.
Capital management
City Bank has a robust capital management framework that
ensures the Bank maintains sufficient capital to support its
risk profile, meet regulatory requirements, and generate
sustainable returns for shareholders. With a focus on prudence,
efficiency and optimization, the Bank's capital management
practices are aligned with its strategic objectives and aim to
achieve long-term growth and sustainability.
As a financial institution of repute, City Bank understands
the critical role that capital management plays in achieving
sustainable profitability. With a comprehensive capital
management framework in place, the Bank aims to maintain
a strong capital base that can absorb unexpected losses,
support growth, and meet regulatory requirements.
CBL has a detailed capital planning framework that considers
projected business growth along with subsequent profitability
and capital needs. The Bank's capital plan is reviewed and
updated regularly to ensure that it aligns with its strategic
objectives. Moreover, as a part of Internal Capital Adequacy
Assessment Process (ICAAP), the Board-approved 5-year
capital growth plan was implemented.
Operational risks
The Board of City Bank consistently promotes an organizational
culture that prioritises effective risk management and
adherence to sound operating controls. The Board has
approved a structured Operational Risk Management
(ORM) framework that is working to ensure operational risk
exposures are managed within acceptable tolerance limits
using dynamic tools and techniques following international
best practices.
Additionally, the Board has engaged International Finance
Corporation (IFC), one of the best international advisory
consultants, to alleviate the Bank’s operational risk exposures
by reinforcing operational and risk governance structures and
practices, etc.
The Bank has focused on enhancing the robustness of its
operational risk management activities throughout the year
2022. City Bank’s Operational Risk Management team has
been going through a transformation as a part of the Quantum
Leap Project II with IFC since the Board desired to enhance
the Bank’s Operational Risk Management framework to be
best-in-class by comparing it to international banks and Basel
needs with support from IFC.
Explicit roles and responsibilities of three lines of defence,
and key ORM tools, e.g. Risk Control Self-Assessment
(RCSA), KRI (Key Risk Indicator), and Incident & Loss Data
Management will be reinforced to ensure that the Bank is able
to adopt a more diverse strategy to tackle operational risk.
Additionally, Operational Risk Management Divisions (ORMD)
accommodated several awareness programs in collaboration
with the IFC team to uphold the strong risk-aware culture
across the Bank.
Internal Capital Adequacy Assessment Process
CBL has a Board-approved Internal Capital Adequacy
Assessment Process (ICAAP) through which additional capital
requirement under Pillar II of Basel III is estimated. We have
Annual Report 2022
229
Our Risk Governance
guided the Bank with the necessary recommendations to
sustain risk resilience against adverse market developments.
established an experienced SRP team composed of senior
management who are proactively overseeing the capital
management status of the Bank.
considers those impact in future capital planning.
ICAAP policy of CBL serves the following purposes:
Borrower rating plays a pivotal role in maintaining adequate
capital. Capital is a costly line item on the balance sheet and
it is always difficult to inject fresh capital. In this context,
borrower rating is crucial for risk management.
•
Ensure adequate capital in relation to its risk profile and
establish a more robust risk management technique in
monitoring and managing risk.
•
Recognize the responsibilities of the Bank’s management
in developing capital assessment process and setting
capital targets.
•
Assure Bangladesh Bank regarding compliance with
regulatory standards and disclosure requirements.
Borrower rating by ECAIs
The Bank’s management puts utmost importance on credit
rating of wholesale and SME customers. During review of
credit proposal of existing customers, valid credit rating
by ECAI is always checked by the CRM division and new
customers with valid credit rating are prioritized. Moreover, the
Risk Management Division monitors the status of customer
credit rating regularly. As a result, a significant portion of loan
exposure is already rated in CBL.
CBL prepared ICAAP report for 2021 and submitted the same
to Bangladesh Bank within the stipulated timeframe and
maintained surplus capital even after considering additional
capital charge under Pillar II of Basel III. Results of ICCAP report
were also shared with the senior management and the Board.
Comprehensive risk management report and monthly risk
management report
As per DOS Circular No. 04 dated 8th October, 2018 and
subsequent DOS Circular No. 03 dated 24th January, 2023,
CBL prepares a Comprehensive Risk Management Report
on half-yearly basis and submits the same to Bangladesh
Bank. This report covers major risk areas like credit, market,
operational, liquidity and capital management. The Bank also
submits Monthly Risk Management Report to Bangladesh
Bank. Both these reports and risk issues are presented to
the ERMC during their meeting. The recommendation and
observation of the risk issues are also shared with the Board
Risk Management Committee (BRMC).
Stress-testing
Stress-testing assesses the shock absorption capacity of the
Bank in response to an unexpected event or a combination
of unforeseeable events. CBL prepares stress-testing
reports based on Bangladesh Bank’s guideline as well as its
own processes. The purpose of stress-testing is to identify
vulnerability of the Bank in response to an unanticipated event
such as sudden change in interest rates, changes in the exchange
rate, deterioration in asset quality, weakening liquidity, etc., and
Low
230
Annual Report 2022
R4
R1
R5
R2
R7
Imapct
City Bank’s risk heat map has
been created referencing the
key risk factors enumerated
in the table detailing the key
risks factors of the Bank and
their respective mitigation
measures.
High
Risk heat map
R3
R9
R12
R10
R13
R6
R8
R11
Likelihood
High
Our Risk Governance
KEY RISKS AND STRATEGIC PATH FORWARD
The categorization of major risk factors is given below:
Industry-related risks
•
Risk associated with prevailing economic conditions
•
Risk associated with a highly competitive industry
•
Risk related to disruption due to any adverse or unexpected regulation/market
activity
•
Risk related to employee attrition
•
Risk associated with client portfolios
•
Risk of IT system failure and cybercrime
•
Risk associated with credit management
Regulatory and legal risks
•
Risk of litigation and legal proceedings
Financial risks
•
Liquidity risk
•
Risk associated with the Bank’s credit rating
Operational risks
A description of key risk factors, their potential impact, severity of impact, and how we mine for opportunity is given hereunder:
Risk factor
R1
Sensitivity to the
economic climate
Potential impact
The banking and financial services sector is
particularly sensitive to changes in the economic
climate. Economic downturns can have a severe
impact on the industry, more than on other sectors
in particular because many companies respond to
a slowdown in economic activity by reducing their
investment and borrowing capacity, which could
have an adverse effect on the Bank.
However, Bangladesh’s economic resilience and
developmental profile have ensured sustainable
credit demand. Further, the government focus
on sustained infra development has also helped
foster public credit demand.
Impact
severity
High
Mitigation/opportunity capture
•
Large and diversified borrower
base
•
Large and varied product offering
•
Extensive on-ground footprint
•
Banking partner of government
in distribution of key welfare
schemes, such as COVID relief
Annual Report 2022
231
Risk factor
Potential impact
Highly competitive
industry
The banking industry is highly competitive and is
expected to remain so. The Bank’s competitors
are of all sizes and types, including large MNCs,
etc. These have access to technical solutions that
respond to clients’ specific needs.
R2
Impact
severity
High
Such players, with more significant financial
means and resources, have the potential to
disrupt the competitive landscape. Increased
competition may have a negative impact on the
Bank’s revenue and earnings.
R3
Regulatory/
market disruption
R4
Employee related
risks
R5
Client portfolio
risks
Sudden, severe or abrupt changes to regulations
and market practices may disrupt the industry.
Particularly, the expansion of digital banking,
FinTech companies and e-commerce businesses
into financial services could lead to the
disintermediation of a part of the Bank’s activities.
The health and wellbeing of employees is at the
heart of the Bank’s concerns.
High
The banking industry is known for high mobility
of talent. This was amplified by the “Great
Resignation” phenomenon, which has spread to
all sectors around the world. The Bank’s success
is contingent upon the talent and expertise
of its teams as well as on the strength of its
relationships with clients.
Contracts may be terminated on notice. Moreover,
the Bank’s lending contracts with its clients are
under constant threat from rivals. In addition,
there is a trend towards operating on a projectby-project basis, diluting the relationship value.
Finally, with the intensification of corporate
consolidation process globally, the risk of losing
a client following a merger and/or acquisition is
a risk.
232
Stable
Annual Report 2022
Stable
Mitigation/opportunity capture
•
Longstanding sectoral presence
with experience of various market
cycles
•
Demonstrated ability to maintain
existing client relationships
•
High focus on winning new clients
and accounts
•
Solid market
goodwill
•
Provide clients with the best-inclass services and solutions in a
timely and scalable manner
•
Build agility
response
•
Execute on the strong and
validated digitalisation roadmap
•
Focus on employee health and
wellbeing through coaching,
proper work allocation, etc.
•
Actively attract, retain and
motivate valuable managers or
employees
•
Focus on DEI as a means to
source people from across a
wider talent pool
•
Promote
relationship-based
banking to develop stronger
bonds with clients
•
Sustain leading market position
with a competitive offering
•
Large and diverse clientele with
no single customer concentration
reputation
in
and
competitor
R6
IT system failure
risks
R7
Credit
management risks
R8
Legal proceedings
R9
Liquidity risks
Potential impact
Impact
severity
The digital marketplace is expanding at a fast
clip, and reliance on information technology has
never been greater. This dependence entails risks
for the Bank, such as technical failure, malicious
attack, as well as possible internal threats that
could lead to an interruption of services and/or
loss of personal data.
High
For a Bank, credit management risk is a high
priority as disruption in obligatory payments can
have an impact on asset value and the financial
health of the Bank.
High
As per regulatory provisions, the Bank can file
a case in the court of law if borrower payments
are delayed or if there is wilful default. The case
disposal may be stretched or delayed or put in
abeyance, incurring loss of asset value and loss
of opportunity cost for the Bank, with additional
liability in legal costs.
Stable
Liquidity is the most critical requirement for
a Bank. Lack of liquidity may impede credit
operations and result in loss of opportunity and
reputation.
High
While the loose monetary policy during the
pandemic period had triggered unprecedented
liquidity, the situation is reversing with tightening
policy to curb inflation sucking out liquidity.
The Bank is also exposed to liquidity risk when
its incoming revenue is not sufficient to cover its
outgoing payments.
Our Risk Governance
Risk factor
Mitigation/opportunity capture
•
Robust IT systems with firewalls and
safeguards that are also subject to
regular testing and audits
•
Strong redundancies
•
Specialist team with significant
collective experience
•
Strong credit screening standards
•
High surveillance with proactive
stance on credit management
•
Regulatory-aligned
provisions
support any future Balance Sheet
impact
•
The Bank has a specialist
Legal team with strong judicial
background in handling legal and
court matters
•
The Legal team has been able to
successfully recover a significant
amount over past 5 years,
reflecting a sound record in case
filing and closure
•
Strong deposit mobilisation
capabilities driven by attractive
interest rates
•
Diversified
base
•
Healthy CASA of 51%, indicating
sufficient base of low-cost capital
•
Credit-deposit ratio of 83.2%
•
Opportunity to borrow from
refinance windows, which also
helps lower credit cost
•
Above-regulation
liquidity ratios
credit
mobilisation
statutory
Annual Report 2022
233
Risk factor
R10
Credit rating risks
R11
Environmental,
social and
governance (ESG)
risks
R12
Enterprise/
reputational risk
234
Potential impact
A strong credit rating is a prerequisite for
operational
sustainability.
Any
adverse
downgrade in rating may have a cascading
impact on the Bank’s ability to garner funds, a key
business activity.
Failure to address ESG concerns could impact our
business sustainability, the value of our assets
and liabilities and our reputation.
Risk arising from institutional matters relating
to business strategy, reputation, governance or
sustainability.
Annual Report 2022
Impact
severity
Stable
High
Stable
Mitigation/opportunity capture
•
Credit ratings of the Bank were
upgraded in mid-2022 as a result
of improvement in key metrics
•
Upgrades also reflect strong
capacity to meet financial
commitments with low credit risk
•
Long-term ratings were upgraded
to “AA1” from “AA2” by CRAB
•
Short-term
ratings
were
upgraded to “ST-1” from “ST-2”
by CRAB
•
Rolled out ESG
embed
ESG
into the process
corporate clients
assessment
•
Embarked
on
strategic
affiliations, such as with the Net
Zero Banking Alliance (NZBA) that
lays out a roadmap for enhancing
sustainability practices
•
Engaged in more active industry
ESG research to capture potential
risks and opportunities within the
entire value chain of each industry
•
Fortified data accessibility and
security through enforcing data
controls
•
Continued to support the various
business segments to develop
dynamic tools to manage the
Bank’s overall portfolio risk
•
Mitigated
reputational
risk
through Internal Capital Adequacy
Assessment Process (ICAAP)
evaluation and fortification
screening to
considerations
of evaluating
and in credit
R13
Interest rate risk
Potential impact
Managing interest rate risk is critical as it directly
affects the viability and solvency of a Bank.
Impact
severity
High
Our Risk Governance
Risk factor
Mitigation/opportunity capture
•
Swift credit repricing amid rising
policy rates to protect margins
and yet ensure customer
affordability through non-impact
on EMIs
•
Intelligence shared from RMD on
key actionable points for ALCO
•
Robust ALCO composition with
longstanding experience
Annual Report 2022
235
SUSTAINABILITY AT CITY BANK
Advancing our ESG agenda through our robust
sustainability framework
City Bank took concomitant steps to address environmental,
social, and governance (ESG) challenges in 2022, and this report
details the Bank’s efforts to uphold these responsibilities.
Although both short- and long-term targets have been
progressed toward, the Bank acknowledges that there is
more work to be done. During the year, the ESG framework
that advances the Bank’s improvement objectives and targets
and identifies potential risks was upgraded upon to reflect the
evolving realities. ESG actions were routinely reported to the
management and the Board, and it has since been prioritized as
a topic of discussion at every Board meeting. The Bank includes
ESG factors into its daily operations and business decisions.
We are devoted to making sure that our operations have
a positive influence on all our stakeholders. Principles that
place a high value on ethical and responsible behaviour
serve as the foundation of the Bank. We work hard to uphold
human rights, conduct business with ethics and integrity,
build strong working relationships with our partners, find and
retain employees who share our values, be responsible for
our environmental impact, and give back to our communities
through charitable endeavors.
We are devoted to coordinating our activities with the
Sustainable Development Goals (SDGs) that have the greatest
bearing on how we conduct our business. Our attention is
directed toward those objectives where we stand to benefit
the society and the environment the most. Our firm sense
of purpose, which is to build long-term value by conducting
business in a balanced and responsible manner, directs our
approach to sustainability. These are the three sustainability
pillars that help us achieve this.
Pillar 1
Responsible banking
Pillar 2
Responsible business practices
Pillar 3
Creating social impact
At our company, responsible financing
is integrated into our lending
practices. We support our customers
in transitioning towards more
sustainable, low-carbon business
models, and we work to enhance
their ESG investments. We conduct
our business operations in a fair and
responsible manner, including our
ongoing efforts to promote financial
inclusion, safeguard our customers'
information, and prevent financial
crime.
Our employees prioritize ethical
decision-making and consider the
impact of our business operations on
both the environment and the society.
We strive to provide an inclusive
and supportive work environment,
minimize our direct environmental
impact, and encourage our customers
to adopt sustainable practices.
Additionally, we fulfill our tax
obligations and make socio-economic
contributions to the communities
where we operate.
We aim to make a positive impact
by supporting social enterprises that
effectively address social needs in
innovative ways. We also contribute
to the communities in regions where
we operate by supporting initiatives
in areas such as education and the
environment.
236
Annual Report 2022
City Bank, as one of the leading banks in Bangladesh, has
been recognized for its sustainable practices and initiatives,
garnering accolades from various reputable organizations. The
Bank has been rated as one of the top-10 sustainable banks
in the country for two consecutive years (2020 and 2021) by
the central bank, based on its performance in sustainable
finance, green financing, CSR, core banking sustainability, and
banking service coverage. Additionally, the Bank was honored
with an award from BIBM, in partnership with GIZ, at the 9th
Annual Banking Conference 2022 for its commitment towards
sustainable practices. Furthermore, City Bank was also
recognized as the Best Sustainable Finance Bank in Bangladesh
by Global Finance, a US-based leading financial publication,
in 2022. These recognitions are a testament to the Bank's
unwavering dedication to incorporating sustainable practices in
all aspects of its operations, and its commitment to creating a
positive impact on the environment and the society.
Promoting responsible banking through SDG
alignment
City Bank is committed to aligning its business operations and
citizenship initiatives with the United Nations' Sustainable
Development Goals (SDGs). The Bank’s progress towards each
of the selected goals, where it believes it can have the biggest
impact, is reflected in the following table. This progress is
categorized into organizational impact and social impact.
Pillar 1: Responsible banking
Sustainable
Development
Goals (SDGs)
Selected initiatives
Outcomes achieved
Renewable and clean energy-related
loans
Disbursed credit to the tune of BDT 18.80 mn for
renewable and clean energy-related projects in 2022
Financial relief extended to CMSMEs
during the pandemic
Provided support by way of disbursing BDT 40 bn
stimulus packages to COVID-affected businesses (till
2022)
Offered a variety of financial solutions
to CMSMEs
Foster sustainable, resilient
inclusive infrastructure
and
Made available funding of BDT 856.20 mn to the
development of the green industry in 2022
Support provided to institutional
customers
through
sustainable
finance
Disbursed BDT 61,323.80 mn sustainability-linked
loans in 2022
Engagement with customers on
sustainable investing
Organised various seminars and conferences for
customers with regards to the benefits of sustainable
finance
Annual Report 2022
237
Our Esg Approach
Achievements and recognitions for contribution to
Green and Sustainable Finance, 2022
Sustainable
Development
Goals (SDGs)
Selected initiatives
Outcomes achieved
Facilitate green bonds for climate action
Support environment-friendly
climate action-related initiatives
and
Emerged as the lead arranger of the first-ever green
bonds in Bangladesh
Disbursed BDT 4,905.50 mn of green loans in 2022
Increase financing to sustainability- Enabled total sustainable finance disbursement
linked loans, green loans and renewable/ amounting to BDT 66,229.30 mn in 2022
clean energy development projects
Responsible business practices
Promulgated a Resource Management
Policy to promote diversity amongst
Board members and employees (across
all organisational tiers)
Board composition comprising four women members
Installed solar
branches
select
Achieved sustainable electrification in 13 branches
that are powered by solar energy
Enable continuous learning, upskilling
and reskilling
A total of 475 training sessions were organised in
2022
panels
in
Maintained stable gender balance, with over 16%
women representation in our workforce
As many as 5,203 employees were trained via
exposure to various learning sessions
Reduction in paper use, food waste
and utilities
Installed smart printers in a few office premises that
helped achieve 30% reduction in paper consumption
and contributed to reducing the Bank’s carbon
footprint
Discontinued ATM slip dispensation that helped
accomplish savings to the extent of BDT 2.50 mn,
with customers being alerted of any ATM transaction
via SMS
Facilitated customers to download their half-yearly
e- statements via a link sent on their phone, thus
enabling the Bank to minimise statement printing
costs and hence paper use
We encourage our staff to ensure optimised energy
use and food waste reduction
238
Annual Report 2022
Selected initiatives
Transformation to more sustainable
workspaces
Our Esg Approach
Sustainable
Development
Goals (SDGs)
Outcomes achieved
Devised the slogan: ‘Go Green, Think Green, Act Green’
as a means to generate green and environmental
awareness across the Bank to encourage our staff to
use precious resources responsibly and sustainably
Further supplemented this effort by endorsing our
own green office guidelines to foster behavioural
change among employees
Facilitation of External Communication
Mechanism (ECM) as an engagement
with the external society
Pioneered ECM, the first-of-its-kind initiative among
banks in Bangladesh
The platform enables external stakeholders and local
community members to register their grievances/
complaints regarding projects being financed by City
Bank
Such an approach helps foster an open and
transparent engagement platform with members of
the external society
Creating social impact
Extending financial support to the
underprivileged communities
Offered financial support to 13 poor patients
comprising critical lifesaving medical expenses
Distributed 85,850 blankets during the winter
months to poor people dwelling on the streets
Distributed rickshaws and sewing machines among
jobless poor people
End hunger and achieve food security
Offered health and food (dry provisions) support
during the peak of the pandemic
Annual Report 2022
239
Sustainable
Development
Goals (SDGs)
Selected initiatives
Promoting safety, good health and
well-being for all
Outcomes achieved
Extended healthcare support among COVID-affected
people
Made donations to Heart Failure Research Foundation
for the establishment of a biochemical lab facility at
Naogaon
Donated to Protigga Foundation for facilitating
training on women health, hygiene and safety
against COVID and also on birth control to 150 female
cleaning workers of Dhaka South City Corporation
Made donations to Head and Neck Cancer
Foundation’s Specialized Cancer Hospital
Extending support to ensure quality
education
Provided educational support through
scholarships extended to meritorious students
full
Contributed to Chayatal Bangladesh for conducting
an education program for underprivileged children of
Dhaka
Donated to PROYASH Institute of Special Education
to support education for specialized children
Donated to Bangladesh & Muktijuddho Odhayon &
Gobeshona Kendro
Made financial donations to other educational
facilities
Facilitating women entrepreneurship
and empowerment
Facilitated women entrepreneurship through City Alo
Focused on workplace diversification
Donated to Ujjawala Limited for training women
entrepreneurs on beautification and grooming
Empowering disenfranchised women through 'Selai
Kori' training program and distribution of sewing
machines to them through Poriborton
Ensuring access to drinking water and
proper sanitisation for all
240
Annual Report 2022
Installed 18 water purification systems in various
schools and hospitals
Selected initiatives
Our Esg Approach
Sustainable
Development
Goals (SDGs)
Outcomes achieved
Diminishing inequality in Bangladesh
Provided educational support/ scholarship to
meritorious students, thus giving them a chance for
a better life
Supporting Bangladesh
Disabled Development
Trust to publish Braille magazine for the physicallychallenged
Ensure sustainable management of
forests to combat deforestation
Sustainability journey of City Bank: Putting policy
into practice
that comprises a set of guidelines, including policies and
principles. Resource training is given due importance as it
City Bank is committed to promoting ecological sustainability
and environmental preservation through responsible lending
and sustainable green finance. We have a longstanding
history of implementing green practices, which has been
further reinforced by regulatory policies. As part of our
efforts to become a sustainable Bank, we have developed an
Environmental and Social Risk Management (ESRM) policy,
which is guided by the ESRM policy of Bangladesh Bank and
IFC Performance Standards. Our ESRM policy sets specific
goals and lines of accountability that enable us to manage
our environmental performance and promote sustainable
economic growth. Through our ESRM framework, we are able
to strike a balance between responsible lending and ecological
preservation, ultimately leading to enduring change.
helps build capacity among employees on matters related to
E&S risk management and even business opportunities in the
modernisation of environmental practices. Thus, we advance
a dedicated training roadmap and allocate a commensurate
budget at the commencement of each year. In 2022, a total of
1,061 employees (including new recruits) received training on
sustainable banking across 39 different programs.
City Bank’s green finance practice
Offering holistic green finance solutions
The criticality of green finance is unquestionable, as it supports
sustainable development of various sectors of the economy.
With the amendment made to the central bank’s refinance
scheme for environment-friendly products/projects, City Bank
Capacity building in sustainable finance
expanded its offering to 68 products. Today, the Bank’s green
City Bank’s journey in green/sustainable finance commenced
Energy and resource
efficiency
way back in 2012 via the creation of its ESRM framework
procedures that define the perimeter of the Bank’s lending
Policy formulation and governance
Renewable energy
Donated to Sir John Wilson School for tree plantation
by students on World Environment Day 2022
financing offering comprises:
Alternative energy
Liquid and solid
waste management
Recycling and
recyclable products
Annual Report 2022
241
Green brick
manufacturing
Green agriculture
Green establishment
(also ensuring safety/
security of factory
workers)
In addition to offering green finance on its own, City Bank
also channelises funds from other sources, including Global
Climate Partnership Fund (GCPF), Bangladesh Bank’s various
low rate refinance schemes for green and sustainable finance,
such as Green Transformation Fund (GTF), Technological
Development/Upgradation Fund (TDF), etc. Going forward,
these funds will create new avenues for green financing in the
areas of energy-efficiency and renewable energy machinery,
Segments
Green CMSME
Greening socially
responsible finance
business process re-engineering/automation, among others.
In 2022, City Bank disbursed a sum total of BDT 4,905.50 mn
across various green financing projects, up from BDT 2,680.90
mn in 2020, thus representing a growth of 83%. Further, at the
end of the year, the Bank’s total green finance portfolio stood
at a significant BDT 7,028.42 mn, amongst the largest such
portfolios in private sector banking in the country.
2022
2021
2020
2019
2018
2017
3,569
1,246
1,053
1,964
1,359
520
Renewable energy
19
22
-
80
-
5
Waste management
347
37
-
11
-
30
Green industry establishment
856
1,176
67.5
-
-
-
Work environment and workers’ safety
114
199
0.9
96
-
167
4,905
2,681
1,121
2,152
1,359
722
Energy and resource-efficiency
Total
Establishment of green finance helpdesk
Digital Banking
To disseminate the importance of green finance and extend the
reach of sustainable lending, the Bank has also established 32
Sustainable Finance helpdesks covering all geographical areas
of its business network, especially facilitating entrepreneurs in
the hinterlands to have better access to the Bank’s green and
sustainable financial products.
City Bank offers a range of digital banking services that allow
customers to manage their accounts from anywhere and at
any time. With digital services, customers can perform various
tasks, such as checking their account balance, transferring
funds, paying bills, and more, using their personal devices.
City Bank is committed to ensuring the safety and security
of customer data and has implemented robust security
procedures in this regard.
City Bank’s other green banking initiatives
Initiatives
2022
Number of ATMs
351
Number of branches with online banking
133
Number of sub-branches with online banking
12
Number of internet banking users
Number of branches powered by solar energy
242
Annual Report 2022
446,894
13
The Bank has also made sustainability a priority by developing
a sustainability strategy and action plan. It aims to become
a responsible digital Bank that not only provides added
convenience to customers, but also promotes environmental
sustainability. City Bank is also building a competitive edge
in the green finance market by developing products and
processes that support green initiatives.
their families and society, and contributed to the growth of
businesses, exports and employment. Women entrepreneurs
have also helped in the development of skills and increased
productivity. City Bank is known for its exceptional products
and easy financing options for women entrepreneurs.
SME financing for women entrepreneurs
Women entrepreneur financing
In Bangladesh, female entrepreneurs in small and medium
businesses face various challenges in a male-dominated and
competitive business environment. However, despite the fact
that women entrepreneurs constitute significantly fewer
of all entrepreneurs in Bangladesh, their businesses have
helped improve their livelihoods, earned them respect within
Climate ambition of City Bank
First bank in Bangladesh to be a member of net zero banking
alliance
City Bank has been demonstrating its firm commitment
towards green and ethical banking and thereby contributing
to sustainable finance in line with Sustainable Development
Goals (SDGs). City Bank has been reducing carbon emissions
from the bank’s operation and supply chain through
the establishment of 13 solar-powered branches, the
transformation from conventional to LED lights, phasing
out old desktops to laptops, installation of network printers,
using online platforms for cross-location meetings, etc. CBL
developed green office guidelines and a sustainable finance
policy monitored by Sustainable Finance Unit. City Bank has
been taking awareness sessions and celebrating different
environmental awareness days to inspire reducing personal
carbon footprint.
City Bank has also been reducing carbon emissions through
digitalization and responsible lending practices. Its digital
banking services namely Citytouch, City Ekhoni Account, and
Smart IVR service bring together all the conveniences of
Topic
2022
Number of women entrepreneur
customers in SMESB
4,095
Disbursement of funds to women
entrepreneurs in SMESB (BDT mn)
3,860
retail banking to the screen of internet-enabled devices. City
Bank has introduced Digital Nano Loan, a first of its kind in
Bangladesh. Customers can avail this loan through bKash app
with an automated and digital credit assessment platform and
thus reducing the wastage of paper. E&S risk is the integral
part of the credit risk assessment of any wholesale and
medium segment lending of the bank. City Bank Capital was
the issue manager of Bangladesh’s first-ever corporate green
bond for the largest solar projects in Bangladesh.
City Bank took a step forward as the first Bangladeshi Bank by
joining the Net-Zero Banking Alliance (NZBA) on March 2022,
in line with its commitment to a greener planet. The NZBA is
a United Nations Environment Programme Finance Initiative
(UNEP FI), the banking element of the Glasgow Financial
Alliance for Net Zero (GFANZ), and is accredited by Race to
Zero. Representing almost 41% of global banking assets, with
over 120 members from 41 countries, the NZBA inspires,
informs, and enables financial institutions to mobilize for
climate-positive change. It recognizes the vital role of banks in
supporting the global transition of the real economy to a lowcarbon, sustainable, and inclusive economy.
To attain the global targets set through the Paris Climate
Agreement and SDGs, in light of the government’s Nationally
Determined Contributions (NDC) and Sustainable Finance
Policy of the central bank of Bangladesh, City Bank incorporates
Green Banking and Sustainable Finance in its lending practices
and steers customers’ Environmental, Social, and Governance
(ESG) investments for the betterment of people and the planet.
Annual Report 2022
243
Our Esg Approach
In terms of digital banking statistics, City Bank had 446,894
Citytouch (internet banking) users in 2022, and 45,203 City
Ekhoni accounts. It also had a digital nano loan portfolio of BDT
174.36 mn and is actively working on the Digital Islamic DPS
portfolio, which currently stands at BDT 25.62 mn.
Sustainability highlights
At City Bank, we embrace the 3P philosophy of People and Planet in pursuit of Profit and this
is at the heart of our efforts in sustainability. We present here the key sustainability highlights
for the year 2022 that encompass our focus on People and the Planet in ensuring a more
sustainable Bank and a better future for all.
PEOPLE:
ADVANCING PROSPERITY
42
999
100,000++
14%
173.8 mn
18,433
72%
66,321
CSR projects
CSR beneficiaries
CSR investment (Tk.)
YoY increase in CSR investment
1,064.3 mn
Exchequer deposit (Tk.)
244
Annual Report 2022
Total female employees
Female employees as %
of total employees
No. of employee
participation in training
Total training hours
Our Esg Approach
P L A N E T:
NURTURING SUSTAINABILITY
4,910 mn
10,234
83%
395,092
1,061
592,102
Green and climate finance (Tk.)
YoY growth in green and
climate finance
No. of employees receiving
training on E&S, IFC PS and green
and sustainable finance
Customers onboarded
through e-KYC
Customers who opted
for e-statements
Customers who opted for
statements via SMS URL
446,894
Citytouch users (internet banking)
Annual Report 2022
245
CORPORATE SOCIAL
RESPONSIBILITY AT CITY BANK
Social & Relationship Capital
Banking on sustainability
At City Bank, we have always believed that businesses of
tomorrow never stop with business-as-usual solutions!
As governments and industry speed the transition to a netzero economy, it is more critical than ever for businesses
like us to embrace innovation and sustainability, create new
development opportunities, and maintain relevance in the
new low-carbon economy.
We know that real business outcomes are driven by
sustainability, both today and especially in the future of
reduced carbon emissions. We believe we need to effectively
transform and capture long-term development prospects,
as Bangladesh embarks upon meeting the climate goals
and shifts towards a smart country with unfettered growth
potential. At City Bank, we are committed to this transition
through our specialist ESG knowledge and solutions.
246
One of the other major direct impacts of the Bank that is
in complement to its indirect impacts (through customer
solutions) is fostering positive change measured against the
SDG goals. The ability to relate our impacts to the SDGs is
something that we truly believe will improve the economic and
social conditions and circumstances of the society of which
we are an intrinsic part. Hence, any good that we do to the
society will directly flow as good to us, which is the core of our
sustainability strategy that we place at the front and centre of
our operations.
Over the years, we have invested hundreds of crores in
sustainability and citizenship initiatives and this has come
back to us in the form of the tremendous goodwill that the
Bank enjoys with the society living outside its gates. This
credibility has been a huge spur for growth that is reflected in
the Bank’s financial performance over the years.
We are indeed a Bank that ensures that our societies can bank
upon us!
965.8 mn
173.8 mn
City Bank’s social investment over the last eight
years (in BDT mn)
CSR expensed in 2022
32.5
43.3
146.1
75.3
144.2
249.3
101.3
173.8
2015
2016
2017
2018
2019
2020
2021
2022
Annual Report 2022
City Bank has always believed that CSR is an essential component of the business and a top priority. Our quest for profit must
also consider the positive influence we have on the society. In accordance with this ideal, the Bank is committed to conducting its
commercial operations in a manner that is responsible and sustainable, therefore pushing in social responsibility as something
that we do today and every day.
Our community support programs serve as the foundation for all of our CSR projects and go beyond the typical charity or
philanthropic measures, transcending one-time initiatives and nurturing lasting value.
In 2022, the Bank cultivated the following CSR initiatives:
Nurturing learning
programs for the
needy
Working on developing
health support
programs
Conceiving projects for
disaster management
Providing financial aid
for art, culture and
sports
Ensuring that clean
water is available along
with proper sanitation
The Bank’s activities help transform the SDG goals. Thus, we have provided a more in-depth description of some of our most
significant social investment and community development programs and the SDGs to which they are tied.
Contribution
SDGs impacted
DECARBONIZATION
EDUCATION
HEALTHCARE
WOMEN EMPOWERMENT
CIVIC BEAUTIFICATION
IMPACT PARTNERSHIPS
Annual Report 2022
247
Our Esg Approach
Overview
Healthcare and wellbeing
programs vital for sustainable enterprise.
City Bank has focused its efforts on many social and societal
advances, such as catastrophe management, climate control,
and environmental improvement, as well as revenuegeneration assistance.
In this regard, the Bank partnered with the prestigious North
South University (NSU) and Chittagong Independent University
to offer a women entrepreneurship course comprising the
popular City Alo Certification Program. The platform aims
to impart technical skills as well as other relevant soft-skills
for enabling women entrepreneurs to launch, manage and
promote their business, thus positioning them for future
success.
In this regard, due to the greater severity of the winters, the
Bank provided 75,000 blankets valued approximately BDT 25
mn to those affected the most by the harsh winter months,
especially pavement dwellers.
The Bank also made contribution to the Prime Minister’s Relief
& Welfare Fund comprising a sum of BDT 100 mn as financial
assistance to those affected by the floods.
Beautification and civic improvement
As a means to foster income generation, the Bank donated
rickshaws and sewing machines to jobless poor individuals in
association with major welfare organisations such as Satkania
Lohagara Samity and Poriborton.
The Bank continued its longstanding involvement with the
Baridhara Society for the upkeep and plantation of Baridhara
Lakeside Rajuk Park Zone-1. Baridhara Lakeside Park is one
of the most picturesque parks of Dhaka and, considering
its prime location, the Bank’s significant contribution has
facilitated its proper maintenance, while ensuring sustenance
of an abundant green cover for city dwellers.
The Bank also makes donation to tree plantation activities on
World Environment Day and the same was the case on the
occasion of World Environment Day 2022 as well.
The Bank also signed an agreement to sponsor the
maintenance and development of Baridhara Lake Side Park,
an upscale park in Dhaka, for a five-year period (2022-2027).
Educational support
Advancing sports and culture
City Bank strives to create a larger and broader impact on
society through education. The Bank believes that proper
education is the bedrock of a progressive society.
City Bank extends support to various arts, sporting and cultural
endeavours, signifying the importance the Bank lays on the
development of these important foundations of society.
Thus, the Bank expensed a sizeable amount on educational
activities in 2022, including provision for educational
support, scholarship to underprivileged and meritorious
students, conducting certification and research-based
events, contributing to library infrastructure and resource
development, making provision for proper transportation
facility for university students, engaging in magazine and book
publications, etc.
The Bank contributed to art and culture through History &
Culture Circle Bangladesh Limited for publishing the final
phase of the first complete encyclopedia on Bangabandhu
Sheikh Mujibur Rahman, “Mujibpedia”. The Bank also supports
publishing of one of the top children science magazines of the
country, “BigganChinta”.
The Bank has also donated to the PROYASH Institute of Special
Education and Research and the Prime Minister’s Education
Assistance Trust, among others, thus playing a vital role in
contributing to the education of underprivileged children and
those with special needs.
Women empowerment
City Bank’s City Alo program has become a movement for
women in business, contributing to their economic mobility
and empowerment. The Bank has transcended beyond just
financial services to offer a slew of capacity development
248
Annual Report 2022
The organisation also contributed to such sporting events
as the Bangladesh Sheikh Mujib Dhaka Marathon 2022 and
offered financial support to a national golfer throughout the
year.
Forging strategic partnerships
City Bank continued its collaboration with Footsteps
Foundation, a social enterprise, for Project Trishna that
provides city dwellers with free access to safe drinking water,
thus contributing to public health and wellbeing.
Currently, the Bank has supported the installation of 20 water
purification systems under project Trishna.
Statutory Report
STATUTORY REPORT
Annual Report 2022
249
DIRECTOR’S REPORT
Dear shareholders and stakeholders of City Bank,
On behalf of the City Bank Board of Directors, it is my pleasure
and honour to present the Directors’ Report and Auditor’s
Report, together with the Bank’s Audited Financial Statements
for the fiscal year ended 31 December 2022.
The Bank accomplished a successful operational and
financial performance during the year 2022, continuing on
its transformation journey in the post-pandemic era. The
emphasis across the organisation continued to remain
on innovation, digital banking, customer service, and cost
discipline. These key growth levers have been instrumental in
continued value generation for the Bank’s shareholders and
other stakeholders.
Global Economy
The global economy is experiencing a number of weaknesses,
according to the IMF’s World Economic Outlook (WEO) for
October 2022. Rising inflation, tighter financial conditions
in most parts of the world, Russia’s invasion of Ukraine, and
the ongoing COVID-19 pandemic all loom large and portend a
rough path ahead.
Normalisation of monetary and fiscal policies that provided
unprecedented liquidity during the pandemic is dampening
demand, as policymakers attempt to bring inflation to
goal while staying steady in their efforts. Despite this, a
growing number of economies are suffering slower or even
contractionary growth. The global economy’s future health is
critical on the right calibration of monetary policy, the outcome
of the Ukrainian war, and the possibility of further pandemicrelated supply-side disruptions, such as in China.
The WEO report estimates that global growth will fall from
6 percent in 2021 to 3.2 percent in 2022 and 2.7 percent
in 2023. Except for the global financial crisis and the acute
phase of the COVID-19 pandemic, this is the weakest growth
profile since 2001, and reflects significant slowdown for the
largest economies: a US GDP contraction in the first half of
2022, a Eurozone contraction in the second half of 2022,
and prolonged COVID-19 outbreaks and lockdowns in China
with a growing property sector crisis. One-third of the global
economy has witnessed two consecutive quarters of negative
growth, with the drumbeats of recession looming large.
250
Annual Report 2022
As per the WEO Update October 2022, global inflation is
expected to climb from 4.7 percent in 2021 to 8.8 percent
in 2022, then decline to 6.5 percent in 2023 and 4.1 percent
in 2024. Surprises on the upside in inflation have been more
common in advanced economies, with higher fluctuation in
emerging market and developing nations (EMDEs).
According to the WEO assessment, the risks to the outlook
remain particularly significant and to the downside. Monetary
policy may overestimate the appropriate stance to lower
inflation. The course of policy of major economies may
continue to differ, resulting in higher US$ appreciation and
cross-border conflicts. Larger price increases in energy and
food may lead inflation to last longer and global tightening
of financial conditions might cause widespread debt crises in
developing markets. Russia’s suspension of gas shipments
may reduce output in Europe and reappearance of COVID-19
or other global health crises might further limit growth.
Besides, deterioration of China’s property sector challenges
may spread to the local banking sector, putting a strain on
the country’s GDP and having a negative cross-border impact.
Additionally, geopolitical fragmentation could impair trade and
financial flows, complicating climate policy coordination even
further, thus increasing climate change risks.
The WEO projects balance of risks to be skewed to the
downside, with around 25% likelihood of one-year global
growth sliding below 2%—in the tenth percentile of global
growth outturns since 1970. To mitigate these risks, monetary
policy has to remain on course to restore price stability.
Moreover, front-loaded and forceful monetary tightening
is required to avoid inflation de-anchoring, which occurs
when consumers and companies base their wage and price
expectations, respectively, on previous inflation experiences.
The aim of fiscal policy needs to be anchored to safeguard
vulnerable populations by providing targeted near-term
assistance to assuage the strain of the global cost-of-living
crisis. Yet, the overall policy stance should stay restrictive
enough to keep monetary policy on track.
Finally, successful multilateral collaboration is vital to avoid
fragmentation, which might undo the benefits of several
decades of progress achieved in economic integration.
The world is in a tumultuous phase currently, with economic,
geopolitical and environmental upheavals all having an
influence on the global landscape. Inflation has reached
multidecade highs, driving monetary policy tightening and
putting stress on household finances at a time when budgetary
support for the pandemic is dwindling.
Several low-income countries are suffering severe fiscal
challenges. Meanwhile, Russia’s continuing war in Ukraine
and other tensions have created the prospect of substantial
geopolitical instability. Although the pandemic’s impact has
subsided in most nations, its residual effects continue to
hamper economic activity, particularly in China. Furthermore,
extreme heat waves and droughts in Europe, Central and
South Asia have given a hint of a more hostile future wrought
by global climate change.
Amid these unpredictable settings, recent data released by
the IMF suggest that the global economy is slowing broadly
as downside risks materialise, albeit with some contradicting
indications. Global real GDP contracted modestly (-0.1
percentage point at a quarterly annualised rate) in the second
quarter of 2022, with negative growth in China, Russia and the
US, as well as sharp slowdown in eastern European countries
most directly affected by the war in Ukraine and international
sanctions aimed at pressuring Russia to end hostilities. At the
same time, other large economies did not contract—in the
second quarter, Eurozone growth surprised on the upside,
powered by growth in tourism-dependent southern European
nations.
Forward-looking data, such as new industrial orders and
sentiment indices, point to a decline in major economies. Yet,
other indications imply output decline while the labour market
is strong in some circumstances.
Manufacturing PMIs
65
United States
Euro area
Japan
United Kingdom
Brazil
China
India
60
55
50
45
Jul 2021
Oct 21
Jan 22
Apr 22
Jul 22 Aug 22
Source: Haver Analytics and IMF staff calculations
Consumer Sentiment
Business Sentiment
2
3
2
1
0
-1
-2
-3
-4
1
0
-1
-2
-3
Jul
2021
Oct
21
Jan
22
Apr
22
Jul Aug
22 22
Jul
2021
Oct
21
Jan
22
Apr
22
Jul Aug
22 22
Source: Haver Analytics and IMF staff calculations
The progressive withdrawal of monetary support by several
central banks as they strive to control persistently high
inflation is a major element underlying the downturn in the
first half of 2022. Rising interest rates and the resulting
expansion in borrowing costs, particularly mortgage rates, are
having the desired effect of cooling domestic demand, with
the housing market displaying the earliest and most visible
signs of slowing in economies such as the US. Monetary policy
tightening has often been accompanied by a reduction in
fiscal assistance, which had previously supported household
disposable incomes.
Annual Report 2022
251
Statutory Report
Inflation and uncertainty
In a larger sense, nominal policy rates in both advanced and
emerging market and developing countries are currently above
pre-pandemic levels. With rising inflation, real interest rates
have yet to return to pre-pandemic levels. With the striking
exception of China, tightening financial conditions in most
regions resulted in a considerable real appreciation of the US
dollar. This has also increased yield spreads for debt-stressed
lower- and middle-income economies. In Sub-Saharan Africa,
yield spreads on more than two-thirds of sovereign bonds
were above 700 basis points in August 2022, a considerable
increase from the previous year. The impacts of the Ukrainian
conflict have compounded the shifting global risk appetite in
eastern and central Europe.
Beyond monetary policy alone, China’s COVID-19 outbreaks
and mobility restrictions as part of the authorities’ zero-COVID
strategy and Russia’s invasion of Ukraine have also pulled
down economic activity. China’s lockdowns have imposed
sizable constraints domestically and accentuated already
strained global supply chains.
Change in monetary policy cycles among G20 economies
(no. of increases and cuts in policy rates)
Tightening AEs
Tightening EMs
15
10
Easing AEs
Easing EMs
In 2022, the world economy is predicted to be 3.2 percent
higher than in 2021, with advanced economies growing 2.4
percent and emerging market and developing economies
growing 3.7 percent. The world economy will expand even
more slowly in 2023, at 2.7 percent, with advanced economies
growing 1.1 percent and emerging market and developing
economies 3.7 percent.
The WEO Update of October 2022 has stated three key factors
that will critically shape the economic outlook: the monetary
policy stance in response to elevated inflation, the trajectory
of the war in Ukraine, and the impact of pandemic-related
lockdowns and supply chain disruptions.
Prioritised focus on inflation management
5
0
-5
-10
-15
2007
09
11
13
15
17
19
21
Aug
22
Source: Bloomberg Finance L.P and IMG staff calculations
The war in Ukraine and deepening cuts to supplies of gas
to Europe have amplified pre-existing stresses in global
commodity markets, driving natural gas prices higher
once more. European economies—including the largest,
Germany—are exposed to the impact of the gas supply
cuts. Continued uncertainty over energy supplies has
contributed to slower real economic activity in Europe,
particularly in manufacturing,dampening consumer and,
to a lesser extent, business confidence. However, a strong
recovery in the tourism-dependent southern economies
have supported the delivery of better-than-anticipated
overall growth in the first half of 2022.
Food prices—a prime driver of global inflation in 2022—have
252
provided a rare slice of good news, with futures prices falling
and the Black Sea grain deal giving some hope of improved
supply. More generally, some signs show that commodity
prices might be starting to ease-off, as global demand slows,
helping to moderate inflation. However, recent extreme heat
waves and droughts are a stark reminder of the near-term
threat from climate change and its likely impact on agricultural
productivity. Although a slight rebound is forecast for the
second half of the year, full-year growth in 2022 will likely
fall far short of average pre-pandemic performance and the
strong growth rebound in 2021.
Annual Report 2022
Inflation has expanded faster and more consistently than
projected since 2021. As projected by the October 2022
WEO Update, inflation in industrialised economies hit its
highest level since 1982 in 2022. Although inflation is a global
phenomenon that affects most countries, it has the greatest
impact on lower income populations in emerging nations.
Food accounts for up to half of household consumption
spending in many nations, therefore inflation has had a
particularly severe impact on human health and living costs.
Despite a minor decline in the consumer price index (CPI) in
July and August 2022, US inflation hit one of its highest levels
in roughly 40 years in August 2022, with average prices 8.3
percent higher than a year ago. In the Eurozone, inflation
reached 10% in September 2022, while the UK had annual
inflation of 9.9%.
Inflation in emerging market and developing nations was
expected at 10.1 percent in the second quarter of 2022, with
a peak of 11 percent in the third quarter: the highest rate since
1999. The aftereffects of robust demand rebound in 2021, as
well as the ongoing rebalancing of demand toward services
Global food and rice price indices
Wheat stores as a share of
annual consumption
120
Advanced economies
Low-Income developing countries
Emerging market and middle-income economies
100
80
60
40
20
0
20
40
60
Import share of wheat consumption
80
100
120
140
160
Source: UN FAO, US Department of Agriculture, Foreign Agricultural Services, IMF staff calculations
Dec-21
Jun-21
Dec-20
Jun-20
Jun-19
Dec-19
Dec-18
May-22
133.4
Jun-16
Dec-21
May-22
Jun-21
Dec-20
Jun-20
Jun-19
Dec-19
20
Jun-18
80
Dec-18
60
Dec-17
100
Jun-17
Non-Energy
100
Jun-17
109.2
Dec-16
Energy
140
RIce
120
Jun-16
160.9
Dec-16
Food
180
Index
140
(Base: 2010 = 100)
157.4
Jun-18
(Base: 2014-2016=100)
160
Index
Commodity prices indices
Dec-17
Global food and rice price indices
Source: Food and Agriculture Organization (FAO)
Source: World Bank
A significant recent trend is that while unpredictable headline
shocks to major commodities such as energy and food prices
continue to account for a significant portion of inflation, they
are no longer the overwhelmingly dominating drivers.
the Federal Reserve (Fed) has raised the federal funds target
rate by three percentage points and has indicated that more
increases are anticipated. Despite forecasting weak growth,
the Bank of England has hiked its policy rate by two percentage
points since the beginning of the year 2022. The European
Central Bank (ECB) boosted its policy rate by 1.25 percentage
point during the year 2022.
However, underlying inflation has risen, as assessed by several
measures of core inflation, and has continued to remain high
far into the second half of 2022. Global core inflation, which
excludes food and energy costs, is forecast to be 6.6 percent
YoY, reflecting the pass-through of energy prices, supply
chain cost pressures, and tight labour markets, particularly in
advanced nations. In contrast, China's economic activity has
slowed, lowering core inflation. On average, nominal earnings
take time to rise in reaction to inflation, causing real wages
to fall and dampening demand. Yet, despite certain areas of
uncertainty, long-term inflation predictions in most major
economies have remained consistent.
To keep inflation from getting entrenched, central banks
have raised nominal policy rates swiftly. Since early 2022,
Yet, because inflation has outpaced these increases, actual
policy rates have remained below pre-pandemic levels with
a few exceptions. Variations in monetary policy normalisation
pathways are attributable, in part, to core inflation increasing
significantly in certain advanced economies, most notably the
US, before it did in others. Real activity and financial markets
have reacted to the elimination of monetary assistance, with
modest evidence of cooling property markets, particularly
in the US, and of labour market momentum weakening.
Interest rates and spreads have also risen in several nations
and throughout the yield curve, causing financial markets to
become volatile.
Annual Report 2022
253
Statutory Report
run. A considerable impact from war-related energy shocks
magnifies these consequences in Europe; in Asia however, a
more mild influence on food prices has helped keep inflation
from increasing as much as it has elsewhere.
such as travel have pushed up inflation. Although futures prices
have declined, the delayed pass-through of previous rises in
food and energy prices from global commodities markets to
consumer prices may cause inflation to rise more in the short
Overview of WEO projections
(Percentage change)
2021
2022 (P)
2023 (P)
6
3.2
2.7
Advanced economies
5.2
2.4
1.1
- United States
5.7
1.6
1.0
- Euro Area
5.2
3.1
0.5
- Japan
1.7
1.7
1.6
- United Kingdom
7.4
3.6
0.3
- Canada
4.5
3.3
1.5
Emerging market and developing economies
6.6
3.7
3.7
- Emerging and developing Asia
7.2
4.4
4.9
China
8.1
3.2
4.4
India
8.7
6.8
6.1
- Latin America and the Caribbean
6.9
3.5
1.7
- Middle East and Central Asia
4.5
5.0
3.6
- Sub-Saharan Africa
4.7
3.6
World output
3.7
Source: IMF staff estimates
Global growth and inflation forecasts
GDP Growth Rate
World
8
Inflation Rate
Emerging market and
developing economies
Advanced economies
World
10
Emerging market and
developing economies
Advanced economies
8
6
6
4
4
2
2
0
0
2021
22
23
2021
24
22
23
24
Source: IMF WEO October 2022 Update
Economic review of major nations
In 2022, City Bank operated in an environment marked by
global inflation picking up to levels not seen in decades.
A brief review of performance of some of the major economies
is as follows:
•
United States (GDP: +2.1% in 2022). Economic growth
slowed following the high growth rates in 2021. The labour
market remained solid, as the unemployment rate was
close to historical lows. Inflation showed signs of falling
back from mid- year highs but remains elevated (6.5% in
December 2022). The Federal Reserve raised interest
rates by 425 bps in 2022 up to a range of 4.25%-4.5%.
•
Eurozone (GDP: +3.5% in 2022). The end of pandemic
restrictions in Q2’2022 boosted services sector activity,
The war in Ukraine fanned geopolitical tensions and global
supply chain bottlenecks, and disruptions stemming from
the COVID-19 pandemic and geopolitical situation waned,
yet persisted. In response, major central banks raised
interest rates to strive to contain inflationary pressures;
some countries are expected to consolidate monetary policy
in 2023, which may lead to a gradual slowdown in global
economic activity.
254
Annual Report 2022
•
United Kingdom (GDP: +4.1% in 2022). Accelerated
inflation caused real income and domestic demand to
decline as the year went on, ending with a significant
slowdown. The labour market, with little idle capacity, was
another factor pressuring inflation. As a result, the Bank of
England raised interest rates to 3.5%.
•
Spain (GDP: +5.5% in 2022). Normalisation of the services
sector and tourism activity following the pandemic
boosted growth in 2022. Despite economic deceleration,
the labour market remained robust. Inflation peaked above
10% but moderated to 5.8% in December 2022 due to a
decline in energy prices. However, core inflation continued
to rise (7.5% in December 2022).
•
Portugal (GDP: +6.7% in 2022). Synchronised external and
internal demand due to rapid and intense post-pandemic
recovery helped keep Portugal at almost full employment
(average unemployment rate at 6%). Stronger demand
when supply was unable to respond and the effects of the
war in Ukraine accelerated inflation to double digits.
•
Poland (GDP: +4.9% in 2022). The economy was resilient
despite headwinds such as the war in Ukraine, spike in
energy costs and tighter financial conditions. A strong
increase in wages put further pressure on already high
inflation. In response, the central bank raised the official
interest rate to 6.75%.
•
•
Mexico (GDP: preliminary +2.8% in 2022). Economic
growth was surprisingly robust on the back of expansion
of services, manufacturing and agriculture plus an active
export market. Inflation continued to pick up though at
a slower pace in Q4'2022 (7.8% in December 2022). The
central bank continued to raise the official rate, reaching
10.5% (5.5% at the end of 2021).
Brazil (GDP: estimated +3.0% in 2022). The economy
grew well but exhibited signs of a slowdown in the second
half of the year 2022, particularly in terms of private
consumption. Inflation peaked in April 2022 but quickly fell
back (5.8% in December 2022). The central bank raised the
official rate by 450 bps to 13.75% in August 2022, with no
further rate increases in the rest of the year.
•
Chile (GDP: 2.7% estimated in 2022). The economy
adjusted after growing strongly in 2021. GDP contracted
in the second half of the year 2022 due to fiscal stimulus
withdrawal and tighter monetary policy. Chile's central
bank raised interest rates by 725 bps to 11.25% to combat
high inflation (12.8%).
•
Argentina (GDP: estimated +5.5% in 2022). Economic
recovery continued despite high inflation (average monthly
inflation rates of 5.7%). The IMF reached an agreement
with the government to refinance debt maturities, backed
by a programme focused on addressing macro imbalances.
Geopolitical risk, reduced growth expectations in the face of
significant uncertainty, inflationary pressures, and tighter
monetary policy all contributed to a turbulent year in financial
markets. As central banks boosted interest rates, government
bond yields rose. Short-term interest rates recovered more
strongly than long-term interest rates, inverting yield curves.
Because of rising interest rates, central banks' uncertainty
regarding terminal interest rates, and lesser visibility on profit
predictions, stock markets suffered periods of volatility and
collapse, which was also true for Bangladesh. In this context
of weaker risk appetite, the US dollar rose against most
currencies, including the BDT, while falling below parity versus
the Euro, which was punished by the ECB's sluggish response
in raising interest rates and the threat of a European recession
induced by a probable oil crisis.
Banks entered the economic climate with good solvency, as
evidenced by stress tests conducted by the major central
banks and international organisations. This suggests that
banks were well-positioned to deal with future economic
downturn. Nevertheless, banks had abundant initial liquidity,
bolstered by central bank COVID-19 pandemic support
measures and savings amassed by people and corporations
throughout lockdowns. But, when monetary policy tightened,
surplus liquidity was withdrawn and wholesale funding costs
rose.
Banks continue to confront the same medium-term concerns.
During the pandemic, digital transformation intensified,
driving organisations to provide better digital experiences to
customers in the face of a rise in new rivals. Climate transition
also necessitates significant effort, as institutions must
create new portfolio classification models and risk scenarios
Annual Report 2022
255
Statutory Report
yet the war in Ukraine, which caused energy and basic
food prices to rise, hampered post-pandemic recovery and
created a recession risk. The labour market was resilient
as the unemployment rate continued to fall to historical
lows (6.6%). Inflation rose steadily to above 10% after the
summer, although ended the year at 9.2%. The European
Central Bank (ECB) responded by beginning to raise
interest rates in July 2022, increasing the official interest
rate from -0.50% to 2% at year end.
to assess potential balance-sheet impacts and understand
exposure to transitional and physical risks posed by climate
change.
The prevalent banking crisis
Global banking has been in turmoil since March 2023,
following a series of stunning bank collapses in Europe and
the United States. Despite a series of rescue packages for
troubled lenders and the assurances of governments and
financial regulators, concerns about the health of the global
financial system persist in the aftermath of the collapse of
Silicon Valley Bank (SVB), a foremost bank for start-ups in the
famed Silicon Valley.
While US regulators hoped to shore up confidence by guaranteeing
deposits at SVB and crypto-focused Signature Bank in early March
2023, the collapse of Credit Suisse thereafter reignited fears of
contagion across the financial sector.
Unlike SVB, a mid-tier bank, Credit Suisse is a financial
Bangladesh Economy
behemoth – big enough to be amongst 30 banks considered
to be of systemic importance to the global economy. The
Zurich-based bank held about $1.1 trillion in assets in 2021,
according to S&P Global, making it the 45th largest lender in
the world. By comparison, SVB, the 16th-largest bank in the
US, had about $209 billion in assets (in 2021).
Although Credit Suisse has been dogged by concerns over
its financial health for years following a raft of scandals, the
bank’s quickfire emergency sale to UBS delivered a knock
to Switzerland’s image as a haven of financial stability and
sparked volatility in financial markets. Despite being intended
to quell market panic, the nature of Credit Suisse’s takeover
also stirred unease. It has also raised concerns about the
proliferation of more institutions deemed “too big to fail”.
Going forward, the banking sector will remain in the shadow
of the SVB and Credit Suisse saga in 2023 with anxiety over
the health of the banking system and any possible contagion
effects.
decade crossing the 7 percent milestone in FY2015-16 and
the 8 percent landmark in FY2018-19. However, constrained
by the COVID-19 challenges, the growth rate reduced to 3.45
percent in FY2019-20. Yet, due to the prudent and sound
leadership of the government, the country successfully
negotiated the pandemic and other challenges and returned
to a high growth trajectory.
GDP per capita at current price
Average GDP growth 1972-2018
6.73
6.57
2.84
2,500
5.58
6.37
2.83
3,000
Constant US Dollar 2010
Source: World Bank
4.68
5.33
2.8
USD
Source: IMF
4.02
5.48
3.13
Bangladesh’s economy was growing consistently high over a
1.76
3.33
3.77
Macroeconomic landscape
72-80
81-90
91-00
01-10
11-18
2,000
1,500
1,000
500
18
19
20
21
22
Bangladesh
23
24
25
India
Bangladesh
South Asia
World
Structural Changes in the Economy
FY80
FY90
FY00
FY18
Agriculture
33.21
29.52
25.28
14.23
Industry
17.08
20.78
25.71
33.66
of which Manufacturing
11.2
12.52
15.4
22.85
Services
49.72
49.7
48.72
52.11
100
100
100
100
GDP at Constant Prices
Source: Bangladesh Bureau of Statistics
256
Annual Report 2022
USD in millions
40,000
30,000
20,000
Exports in million US$
Remittances in million US$
The economy grew by 6.94 percent in FY2020-21. According
to provisional estimates of the BBS, real GDP growth stood
at 7.25 percent in FY2021-22, 0.05 percent higher than the
target rate and 31 basis points higher than the previous fiscal
year.
As per Bangladesh Bank’s Monetary Policy Statement (MPS)
FY2022-23 report, the exuberance of economic activity was
concentrated mainly in the industry sector, with 10.44 percent
growth supported by the improved COVID situation and pentup demand. In addition to expansionary and accommodative
monetary and fiscal policies during the pandemic, the
manufacturing sector benefited from the surge in domestic
and foreign demand. As reflected by 6.31 percent growth in
FY2021-22, a pick-up in activity in the services sector helped
maintain the robust growth momentum.
The healthy growth performance of local industries and higher
external demand benefitted the buoyancy in activities in the
services sector. After registering higher growth rates during
the last two fiscal years during the pandemic period, BBS has
estimated a lower growth of 2.20 percent for the agriculture
sector in FY2021-22 as it experienced slower crop and
horticulture production.
Overall, a robust external demand, reflected in 34.09 percent
growth in exports in the first eleven months of FY2021-22,
and a buoyant domestic demand exhibited by 39.01 percent
growth in imports in the first eleven months of FY202122 also depicted robust growth performance from the
expenditure side during this period.
It may be noted that the government's 28 stimulus packages
worth BDT 2 trillion, approximately 5.68 percent of FY202021 current price GDP, for mitigating the adversities of the
outbreak of COVID on Bangladesh’s economy have facilitated
FY 19
FY 18
FY 17
FY 16
FY 15
FY 14
FY 13
FY 12
FY 11
FY 10
FY 09
FY 08
FY 07
FY 06
FY 05
FY 04
FY 03
FY 02
FY 01
FY 00
FY 99
FY 98
FY 97
FY 96
FY 95
FY 94
FY 93
FY 92
FY 91
10,000
Source: Bangladesh Bank
faster economic recovery. Bangladesh Bank has been pivotal
in implementing the various stimulus packages through a
range of complementary and supportive policy measures by
injecting working capital loans and extending various refinance
facilities for agriculture, CMSMEs, large industries, exportoriented industries, and the services sector. The central bank
has taken the responsibility of implementing the government's
ten major stimulus packages amounting to nearly BDT 1.7
trillion for covering the COVID-related disruptions.
However, Bangladesh is not completely immune to the
economic challenges and losses triggered by the pandemic,
the war in Ukraine, and other global challenges. However, due
to the timely decisions of a proactive government, including
implementation of 28 incentive packages worth Tk. 1877
billion, taken under the leadership of the Hon’ble Prime
Minister Sheikh Hasina, Bangladesh is well on path to return
to its previous high growth trajectory.
Bangladesh Bureau of Statistics (BBS), in its Bangladesh
Economic Review 2022 released in January 2023, estimates
GDP growth of 7.25 percent and per capita income of $2,824
in FY2021-22. Inflation is expected to reach 5.8 percent in the
same year. Both exports and imports are expanding rapidly. In
FY2021-22, export proceeds are expected to exceed US$ 50
billion, while import payments are expected to be about US$
80 billion, compared to US$ 40.1 billion and US$ 61.7 billion in
FY 2020-21, respectively.
The significant devaluation and subsequent gradual depletion
of forex reserves was caused from multi-dimensional factors,
including the Russia-Ukraine war, end of pent-up demand, and
sharp rise in the prices of essential commodities in international
market. As Bangladesh’s economy is largely import-driven, the
country is obligated to pay higher import bills to stay afloat.
Secondly, the nation also received lower remittance than the
Annual Report 2022
257
Statutory Report
Exports & Remittances 1972 - 2019
previous year (US$ 21.03 billion in FY2021-22 vs. US$ 24.77
billion in FY 2020-21, which is lower than the gap between
imports and exports. Thirdly, the country is also payingoff import bills which were extended during the COVID-19
outbreak following regulatory relaxations. Lastly, Bangladesh
is paying-off both long and short-term foreign debts, which is
also exerting pressure on forex reserves.
However, given strong domestic demand, fiscal expansion,
export rebound, improved COVID-19 situation, restoration
of lives and livelihoods, full resumption of economic activity,
implementation of COVID-19 incentive packages, and
completion of a few megaprojects such as the Padma Bridge
and the Dhaka Metro, it is expected that Bangladesh's
economy will continue to grow at the pre-pandemic pace,
thus remaining a beacon of hope in a stormy global economic
backdrop.
In January 2023, Bangladesh government was successful
in garnering a new loan from the IMF, which was largely a
precautionary measure though vital in ensuring additional
funds availability for supporting the long-term growth of
the industry. The IMF approved a US$ 4.7 billion loan for the
country composed of US$ 3.3 billion under the Extended Credit
Facility (ECF) and Extended Fund Facility (EFF) arrangements,
and the balance US$ 1.4 billion under the new Resilience and
Sustainability Facility (RSF). The IMF noted that Bangladesh is
the first Asian country to access the RSF.
Importantly, this is not a “bailout” package like Sri Lanka or
Pakistan, but rather a stabilisation fund as the EFF package
is granted to fund structural reform, an RSF to ensure balance
of payments stability, and an ECF for a stable and sustainable
economic position. The loan will help preserve macroeconomic
stability and prevent disruptive adjustments to protect the
vulnerable. In other words, rather than waiting for a crisis,
the Bangladeshi government prudently decided to take a
precautionary measure and look for ways to pre-empt the
economic challenges.
The ECF has a zero-interest rate, a 5-and-a-half-year grace
period, and final maturity at 10 years. Therefore, the country
can obtain these funds without incurring any costs, deploy the
money to implement productive structural reform that would
boost its economy, and then repay the loan with zero interest
after 10 years when it will be able to benefit from the reforms.
With this deferred repayment schedule, such funds not only
lessen strain on the balance of payments, but also allow the
government to return with a better financial foundation for a
thriving economy.
258
Annual Report 2022
The IMF also wants Bangladesh to increase its government
revenue. Bangladesh’s tax-to-GDP ratio is only 7.5 percent,
whereas World Bank suggests the ideal ratio would be 15
percent. Thus, Bangladesh has a wide scope to raise VAT and
tax revenue. But to ensure the tax increases don’t negatively
impact the poor, the additional funds collected should be
used to increase the social safety net and public spending in a
way that is in line with the goal of poverty reduction and also
positively impacting the SDGs.
Since banks are the main channel through which institutional
funds are received and transmitted to the wider economy,
the IMF loan spells opportunity for the banking sector of the
country.
Key economic indicators 2021-22 (provisional)
GDP at current prices (bn US$)
465
GDP at current prices (bn Tk.)
39,765
GDP growth at constant [rice
7.25
Per capita GDP (US$)
2,723
Per capita GDP (Tk.)
232,828
GNI at current price (bn US$)
482
GDP at current price (bn Tk.)
41,241
Per capita income (US$)
2,824
Per capita income (Tk.)
241,470
Investment at current price (bn Tk.)
12,599
Total imports of goods and services (bn Tk.)
9,176
Import-GDP ratio
23.08
Total exports of goods and services (bn Tk.)
4,872
Export-GDP ratio
12.25
Foreign exchange reserves (bn US$)
41.83
Source: Bangladesh Selected Statistics, July 2022, by
Bangladesh Bureau of Statistics
Monetary policy stance and direction
As per the latest MPS of Bangladesh Bank, the monetary
policy for FY2021-22 was designed to support the continuing
efforts for economic recovery from the COVID -induced
adversities and maintain appropriate caution for overall price
and financial stability. Therefore, the monetary policy stance in
FY2021-22 was primarily expansionary and accommodative
like that of FY2020-21.
The monetary and credit programs for FY2021-22 were
designed with the assumption of a 7.20 percent real GDP
growth and a 5.30 percent general inflation ceiling, as
declared in the national budget. Some of the critical policy
measures comprised allowing low cash reserve and high loan
disbursement ratio, keeping a low level of various policy interest
rates, purchasing government securities from banks’ holdings,
In the backdrop of global commodity price hikes resulting from
the pandemic-driven supply disruptions amid the ongoing
Russia-Ukraine war, an orderly exit from the extraordinary
expansionary policy stance was necessary. Despite lower than
programmed monetary growth, Bangladesh has been facing
growing inflationary and exchange rate depreciating pressure
since the second half of FY2021-22, mainly due to the spill
over effect of the unexpectedly higher global inflation rate
along with widening current account deficits. Following the
exercises of peer countries, the central bank absorbed some
liquidity by issuing BB bills and selling foreign currency to
banks to stabilize the foreign exchange market as a part of its
preventive measures.
With the support of these policy measures alongside
the withdrawal of COVID-related restrictions, a solid and
broad-based economic recovery was evident in FY202122, reflected through various macroeconomic and financial
indicators. During this period, complete normalcy in almost
all the economic activities in agriculture, manufacturing and
service sectors was restored, propelled by enhanced internal
and external demand.
As per data in the latest MPS of BB, the external demand,
which is reflected mainly by export receipts, increased by
34.09 percent during July-May period of FY2021-22, vs. an
increase of 13.64 percent during the same period of the prior
fiscal year. Similarly, the internal demand partly reflected by
import payments increased by 39.01 percent during July-May
period of FY2021-22, as against an increase of 17.31 percent
in the previous year. The growth of consumer credit, another
critical indicator of internal demand, also appeared to be
strong at 20.07 percent as of March 2022.
Private and public sector investment activity, partly
reflected through robust private sector credit growth and
implementation of various mega projects, remained buoyant
in FY2021-22. Private sector credit increased by 12.94 percent
YoY at the end of May 2022, as against an increase of 7.55
percent in the corresponding period of the previous fiscal year.
The large and medium-scale manufacturing output registered
a 17.05 percent growth during the first 8 months of FY2021-
22, while it grew by 4.15 percent during the corresponding
period of the previous fiscal year. As per BBS estimate, real
GDP is expected to expand by 7.25 percent in FY2021-22,
exceeding the prior year’s actual growth of 6.94 percent.
Prices of essentials in the global market went up significantly,
mainly due to COVID-induced supply chain disruptions amid the
expansionary fiscal and monetary measures of the pandemic
period, compounded further by the Russia-Ukraine war.
With the improvement of the pandemic scenario, aggregate
demand responded faster than the aggregate supply shooting
both the energy and non-energy commodity prices up across
the globe. The CPI-based twelve-month average inflation in
Bangladesh rose to 5.99 percent in May 2022, surpassing the
target ceiling of 5.30 percent set for June 2022, which was
5.56 percent in June 2021.
The FY2021-22 monetary policy stance and monetary and
credit programs were intended to ensure necessary liquidity
in the local and foreign currency markets, continuing the
economic recovery momentum, stabilizing the interest rate
and exchange rate movements, and containing inflation. The
central bank’s timely intervention assured a comfortable
liquidity situation in the money market during FY2021-22,
sufficiently meeting the private and public demand. As part
of the central bank’s routine activities, some excess reserves
were mopped up by issuing BB bills during August-November
period of FY2021-22. BB also injected required cash through
repo and liquidity support facilities during February-June of
the same fiscal year, considering the market demand for
money. On the other hand, the central bank also intervened
in the local foreign exchange market by selling a substantial
amount of foreign currency to support exchange rate stability
and maintain the external competitiveness of the BDT in
FY2021-22.
In the wake of commodity price hikes in the international
markets, import payments witnessed a strong increase,
driven by post-COVID economic recovery-related enhanced
domestic demand. Export growth in FY2021-22 was also
significantly higher due to continuation of policy support,
like the enhancement of the Export Development Fund and
working capital loans for export-oriented industries. However,
the inflows of inward remittances were moderate in FY202122 compared to FY2020-21. Higher outflows of migrant
workers with increased cash incentives (from 2.0 percent
to 2.5 percent) and related policy relaxation amid the recent
steep depreciation of BDT are expected to play a critical role in
attracting more inflows remittances in the days to come.
Annual Report 2022
259
Statutory Report
continuing various low-cost refinance lines and moratorium
facilities and extending the time for realizing export receipts
and import payments, and offering credit guarantee facility
for CMSMEs. In addition, the central bank also supported
the implementation of most of the Government’s stimulus
packages to safeguard and revive economic activities against
the pandemic-related disruptions.
On account of the relatively higher import growth vs. export
receipts and remittances, the current account deficit widened
to USD 15.3 billion (3.3 percent of nominal GDP) during JulyApril period of FY2021-22, against USD 1.7 billion (0.4 percent
of nominal GDP) deficit during the corresponding period of the
previous financial year. The overall balance of payments (BoP)
also witnessed a deficit of USD 3.7 billion partly compensated
by the financial account surplus during July-April period of
FY2021-22, against a surplus of USD 7.5 billion during the
corresponding period of the previous fiscal year. BoP deficit
strongly drew down the banking system’s net foreign assets
and lowered the central bank’s foreign exchange reserves
position to USD 41.9 billion (as of 28 June 2022) against USD
46.4 billion at the end of June 2021.
Reserve Money (RM) growth
Broad Money (M2) growth
Source: Bangladesh Bank
24%
Program
Source: Bangladesh Bank
Actual
Program
Actual
15.0%
16%
16%
10.0%
8%
8%
9.1%
0.0%
Jun-22
Mar-22
Dec-21
Sep-21
Jun-22
Mar-22
Dec-21
Sep-21
Jun-21
Domestic credit growth
Jun-21
0%
0%
Private sector credit growth
Source: Bangladesh Bank
Source: Bangladesh Bank
Program
Actual
Program
17.8%
20%
15.6%
10%
0%
Actual
20%
14.8%
13.1%
10%
Jun-22
Mar-22
Dec-21
Sep-21
Jun-21
Jun-22
Mar-22
Dec-21
Sep-21
Jun-21
0%
Public sector credit growth
Source: Bangladesh Bank
60%
Program
Actual
32.5%
40%
20%
27.9%
0%
Jun-21
Sep-21
The above charts display the actual growth trajectory of major
monetary and credit aggregates against their programmed
paths set for FY2021-22. Reserve money (RM) growth, the
operating target of the central bank’s monetary policy, moved
260
Annual Report 2022
Dec-21
Mar-22
Jun-22
below the programmed path mainly due to a significant
depletion of net foreign assets resulting from the net sale of
foreign currency to banks, induced by extraordinarily strong
import demand.
Services sector is estimated to have achieved 6.31 percent
growth in FY2021-22, 0.58 percentage point higher than
FY2020-21. Human health and social work activities is
estimated to have experienced the highest growth rate of 9.78
percent, followed by wholesale and retail trade, transportation
and storage, accommodation and food services activities;
financial and insurance activities; professional, scientific and
technical activities; education and other service sectors would
grow significantly over FY 2020-21.
It is worth mentioning that private sector credit growth,
which largely reflects private investment at the national level,
increased by a large extent in Bangladesh compared to many
other Asian developing countries.
Consumption expenditure
GDP, per capita GDP and GNI
According to the final estimates of the BBS, the volume of
GDP at current market prices reached at Tk. 35,301 billion in
FY2020-21, which was Tk. 31,705 billion in FY2019-20. In
nominal terms, GDP growth stood at 11.35 percent. GDP is
provisionally estimated at Tk. 39,765 billion in FY2021-22, Tk.
4,463 billion higher than previous fiscal year. Per capita GDP
is estimated to be US$ 2,723 in FY2021-22. Medium-term
GDP forecasts are Tk. 44,128 billion in FY2022-23, Tk. 49,497
billion in FY2023-24, and Tk. 55,595 billion in FY2024-25.
As per the final BBS estimates, per capita GDP in FY202021 was US$ 2,462, up US$ 228 from the previous fiscal year.
Per capita gross national income increased to US$ 2,591 in
FY2020-21, up US$ 265 from FY2019-20. Per capita gross
national income is provisionally estimated to US$ 2,824 in
FY2021- 22, US$ 233 higher than previous fiscal year.
According to provisional estimates of BBS, the growth rate of
the agricultural sector stood 2.20 percent in FY2021-22, 0.97
percentage point lower than the previous fiscal year. Within
the agriculture sector, the growth rate of forests and related
services estimated highest growth rate of 5.37 percent in
FY2021-22. The contribution of the broad agricultural sector
to the GDP stood at 11.50 percent in FY2021-22, 0.57
percentage point lower than the previous fiscal year.
Industrial sector is estimated to have accomplished 10.44
percent growth in FY2021-22, 0.15 percentage point higher
than the previous fiscal year. The contribution of the industries
to GDP stood at 37.07 percent, which is 1.06 percentage point
higher than the previous fiscal year.
The contribution of broad service sector to the GDP stood at
51.44 percent in FY 2021-22, 0.29 percentage point lower
than the previous fiscal year.
Consumption expenditure, especially private consumption,
occupies the major share, as per the approach of GDP
measured by the expenditure method. Over more than a
decade, consumption (domestic demand) has constituted over
70 percent of GDP.
As per the final assessment of BBS, the contribution of
consumption expenditure to GDP stood at 74.66 percent in
FY2020-21, of which private consumption was 68.78 percent
and government consumption was 5.88 percent. BBS has
provisionally estimated that the contribution of consumption
expenditure to the GDP will be 78.44 percent in FY202122, of which private consumption will be at 72.77 percent
and general government consumption at 5.67 percent, 3.78
percentage point higher than the previous fiscal year.
Savings and investment
During FY2020-21, domestic savings declined to 25.34
percent of GDP, 1.74 percentage point lower than the previous
year. This is likely because of households dipping into their
savings to tide over the pandemic challenges amid pandemic
restrictions triggering lower income levels. Likewise, national
savings as a percentage of GDP declined to 30.79 percent in
FY2020-21, 0.63 percentage point lower than FY2019-20.
Gross domestic savings is provisionally estimated by BBS to
be at 21.56 percent of GDP in FY2021-22, 3.78 percentage
point lower than previous fiscal year. Gross national savings is
estimated to be 25.45 percent of GDP, 5.34 percentage point
lower than previous fiscal year.
The contribution of investment to GDP moderated to 31.02
percent in FY2020-21, 0.29 percentage point lower than
the previous fiscal year. Of 31.02 percent contribution to the
Annual Report 2022
261
Statutory Report
Broad money (M2) growth, the nominal anchor or
intermediate target of the monetary policy, remained well
below the programmed path during FY2021-22, dragged
by lower net foreign assets in the banking system. The
movement of domestic credit however remained in line with
the programmed path in FY2021-22, supported by the private
sector credit growth. The faster recovery of economic activity
owing to relaxation of COVID-related restrictions contributed
to the upward trend in private sector credit growth in FY202122. However, public sector credit growth was marginally lower
than the target, mainly due to solid inflows of funds from
foreign sources and mobilization of idle money from various
state owned enterprises' bank accounts.
GDP, private investment stood at 23.70 percent while public
investment at 7.32 percent.
Public investment as a percentage of GDP has slightly
increased and private investment as a percentage of GDP
has marginally moderated compared to the prior fiscal year.
Investment is estimated to be 31.68 percent of GDP, of which
private investment is 24.06 percent and public investment is
7.62 percent in FY2021-22. Overall investment is pegged to
be 0.66 percentage point higher than the prior fiscal year with
easing of pandemic related restrictions, and business, trade
and industry looking to gain back the momentum lost due to
the pandemic.
12-month average CPI inflation
The inflation impact on the economy
Bangladesh’s economy is facing adverse consequences
of hiking global food and fuel prices through the import
channels. The trends of international food and non-food
commodity price indices illustrate that the price surge in the
recent months has already been passed through domestic
prices in Bangladesh, mirrored in the sharp rise of import
payments, particularly since the second quarter of FY202122. If this situation persists in the coming months, persistent
depreciation pressures on the BDT will continue to push up
domestic inflation. However, the upward trend in global energy
prices might remain unresponsive to domestic inflation due to
administered prices in the country.
Projection of average general CPI inflation
7.5%
Source: Bangladesh Bureau of Statistics
Food
Core
General
Non-Food
8%
6%
7.2%
6.9%
7.02%
6.27%
5.99%
5.81%
6.6%
6.3%
4%
6.0%
Bangladesh Bank has already taken several measures to
combat inflation, including issuing BB bills and tightening
policy rates.
The CPI-based 12-month average general or headline inflation
trend along with its broad components – food, non-food and
core (non-food and non-energy) inflation since June 2015
has been demonstrated in the chart above. The 12-month
average CPI inflation moderated at a slow pace up to October
2021 and then continued to pick up and reached 5.99 percent
in May 2022, higher than the target ceiling of 5.30 percent
262
Annual Report 2022
Jun-23
Mar-23
Dec-22
Sep-22
Jun-22
Mar-22
Dec-21
Sep-21
May-22
Jun-21
Jun-20
Jun-19
Jun-18
Jun-17
Jun-16
Jun-15
Lingering supply shocks and surging global energy and
commodity prices have resulted in higher inflation in many
economies, including Bangladesh. The CPI-based average
inflation continued to rise throughout FY2021-22 and stood
at 5.99 percent in May 2022. Inflation was attributed to a
significant increase in both food and non-food prices mainly
because of the pass-through of elevated global commodity
prices in the face of supply shocks, higher shipping costs, and
the knock-on effects of an upward adjustment in fuel prices in
the domestic market.
Jun-21
5.7%
2%
5.4%
for FY2021-22. Both the core and non-food components
of average inflation are seen to be gradually increasing. It
is expected that price pressure will continue for some time
and the inflation rate will likely surpass the target ceiling for
FY2021-22.
Inflation in FY2020-21 stood at 5.56 percent, 0.09 percentage
point lower than FY2019-20, which is slightly higher than the
target rate of inflation. As economic damages wrought by the
pandemic and further accentuated by the war in Ukraine, like
all other countries of the world, an upward trend of price level
was also being observed in Bangladesh. The inflation rate is
targeted to be 5.8 percent for the FY2021-22 and 5.6% for
FY2022-23.
Month
Inflation
January
5.86%
February
6.17%
March
6.22%
April
6.29%
May
7.42%
May-22
Jun-21
Jun-20
Jun-19
Jun-18
Weighted avge. nominal interest rates
Source: Bangladesh Bank
14%
10%
7.08%
Lending rate
Deposit rate
Jun-21
Jun-20
Jun-19
4.02%
Jun-18
2%
May-22
6%
Weighted avge. real interest rates
Source: Bangladesh Bank
10%
Lending rate
Deposit rate
5%
1.09%
0%
-1.97%
May-22
Jun-21
-5%
Jun-20
Following rising demand for local currency for regular economic
activities and foreign currency for growing import payments partly
settled by buying foreign exchange/greenback from the central
As a result, some conventional domestic banks fall under
some liquidity stress reflected through the recent upsurge of
the interbank call money rate. This rate shot up to 4.73 percent
in May 2022 from 2.25 percent in June 2021.
Jun-19
However, excess reserves and liquid assets gradually
diminished over the months with the commencement
of recovery from COVID and revival of pent-up economic
activities, pushing up demand for domestic credit.
As per MPS FY2022-23 data, the excess liquid assets declined
from Tk. 2315 billion in June 2021 to Tk. 1,892 billion in May
2022, mainly because of the reduction of excess reserves from
Tk. 625 billion to Tk. 220 billion. Therefore, excess government
securities held by banks did not decline to the extent of excess
reserves. Besides, having no other alternative opportunities for
investment, Islamic banks hold a lion’s share of excess reserves.
Jun-18
The liquidity situation of the banking system measured by
excess reserves of banks over the cash reserve ratio (CRR)
or excess liquid assets in a broad sense, was substantial at
the beginning of FY2021-22 due to the implementation of
several easy fiscal and monetary policy measures since the
last quarter of FY2019-20.
0%
Jun-17
Liquidity and related dimensions in money and credit
markets
Repo
Reverse Repo
Call Money
2%
Jun-17
The recent uptick in the asset price index, especially the
real estate price index, may further exacerbate the upside
risk of inflation. The current global commodity price hikes
amid unfolding geopolitical conflicts may exert inflationary
pressures in the coming days, making it challenging to
maintain the target rate of inflation.
5.00%
4.73%
4.00%
4%
Jun-16
The inflation outlook might confront some uncertainties
in FY2022-23 on account of increasing price pressures
from supply-demand imbalances in the pace of rising
demand, unfavourable prognosis of the Russia-Ukraine
war, and elevated global commodity prices. In addition, a
sharp increase in inflation in India, being one of the largest
trading partners of Bangladesh, might pose upward risks
to the inflation outlook of the country. Yet again, frequent
lockdowns in China's manufacturing hubs could cause supply
bottlenecks, worsening the inflation forecast, as China is one
of the country's largest trading partners. Moreover, upward
adjustments of administered energy prices have exerted
some pressure on the non-food commodity prices partly
due to increased production and transportation costs in the
domestic economy.
6%
Jun-16
Source: Bangladesh Bureau of Statistics
Jun-17
8.91%
Source: Bangladesh Bank
8%
Jun-15
October
Movement of call money and policy rates
Jun-15
9.10%
Jun-14
September
Jun-14
9.52%
Jun-16
August
Jun-13
7.48%
Jun-13
July
Jun-15
7.56%
Jun-12
June
bank in exchange for BDT, excess reserves contracted significantly
in recent months. Thus, the liquidity situation became comfortable
for many banks, some of which have recently been facing increased
liquidity pressure due to uneven distribution.
Jun-12
Inflation
Annual Report 2022
263
Statutory Report
Month
Though the short-run interest rate increased over the months,
declining trends were noticed in the weighted average lending
and deposit rates until May 2022, both in nominal and real
terms, as indicated in the charts above. This might be a
temporary phase as the situation could reverse soon with the
recent policy rate increase amid tight liquidity conditions.
Available data indicate that the weighted average nominal
lending rate climbed down to 7.08 percent in May 2022 from
7.33 percent in June 2021. Similarly, the nominal deposit rate
declined to 4.02 percent in May 2022 from 4.13 percent in June
2021. The interest rate spread also dropped to 3.06 percent
in May 2022 from 3.20 percent in June 2021, indicating an
improvement in the banking sector’s efficiency.
However, the real deposit rate has been in the negative
territory for some time, hurting depositors to some extent. The
negative real deposit rate discourages depositors, adversely
impacting the deposit growth and liquidity situation. However,
considering depositors’ interest, the central bank imposed a
floor on the nominal deposit rate, which is not less than the
average of the last 3-months’ inflation rate, effective from
August 2021.
Inflation was on an uptrend, breaching the 7-percent mark on
point-to-point basis in May 2022. With the apprehension of
further rising inflation, recently, the central tightened its policy
rate or the repo rate by 25 basis points to 5 percent from
4.75 percent. The recent yield curve also exhibits that yields
across all short-term and long-term bills and bonds increased
significantly, reflecting some degree of liquidity pressure in the
money market.
Tight liquidity conditions, a broad-based increase of yields to
maturities, including higher policy rates, and rising inflation
make the cost of funds higher, creating some upside pressures
on the lending rate, going forward.
Revenue mobilisation
In FY2020-21, Tk. 3,289 billion (9.3 % of GDP) revenue was
collected, of which NBR tax revenue stood at Tk. 2,632 billion,
non-NBR tax revenue at Tk. 61 billion and non-tax revenue
at Tk. 592 billion. The revised revenue mobilisation target
projected by BBS is at Tk. 3,890 billion in FY2021-22, which
is 9.9 percent of the estimated GDP. Of these, revenue to be
collected from NBR sources stands at Tk. 3,300 billion (8.4%
of GDP), tax revenue from non-NBR sources at Tk. 160 billion
(0.4% of GDP), and non-tax revenue at Tk. 430 billion (1.1% of
GDP). Revenue received during July-March period of FY202122 is Tk. 2,744 billion (70.53 percent of target), of which NBR
264
Annual Report 2022
revenue stands at Tk. 2,429 billion, and non-NBR revenue at
Tk. 315 billion.
Government expenditure
According to the revised budget, the total expenditure target
for FY2021-22 has been set at Tk. 5,935 billion, which is 15.1
percent of the national GDP. Of this, operating expenditure is Tk.
3,859 billion (9.8% of GDP), and development expenditure is Tk.
2,076 billion (5.3% of GDP). As per the provisional estimates of
iBAS++, the total expenditure up to March 2022 in FY2021-22
was at Tk. 2,620 billion, of which operating expenditure was Tk.
1,943 billion and development expenditure was at Tk. 634 billion.
A new Budget and Accounting Classification System (BACS)
has been introduced from FY2018-19 onwards with a view
to upgrading government financial management to an
international standard.
Budget balance and financing
The government is conscious of keeping the budget deficit
within 5 percent of GDP. Yet, in the revised budget of FY202122, primarily due to the COVID-19 pandemic, budget deficit
crossed 5 percent of GDP.
In the revised budget of FY2021-22, budget deficit has been
estimated at Tk. 2,045 billion (including grant), which is 5.1
percent of the GDP. Of this deficit, Tk. 802 billion (2% of GDP)
will be financed from external sources (including foreign grant)
and Tk. 1,243 billion (3.2% of GDP) will be financed by domestic
sources. Out of the deficit in the domestic sector, Tk. 873 billion
will be sourced from the banking system and the remaining Tk.
370 billion will be sourced from the non-banking sector.
As per the priority accorded in the allocation of revised annual
development plan (ADP), FY2021-22, the highest priority
has been rightly given to the transport and communications
(26.49%), power and energy (19.81%), housing and community
facilities (11.51%), education (9.59%), local government (7.15%),
and healthcare (6.35%).
Monetary policy and monetary management
Monetary policy stance and the monetary and credit
programmes have been announced for FY2021-22 with the
key objective to continue on the path of the ongoing recovery
process that was disrupted by the COVID-19 pandemic
through expansionary tools while maintaining stability in
general price levels. The FY2021-22 monetary programme
is primarily anchored to support 7.2 percent real GDP growth
and containment of average inflation at 5.3 percent.
Money and credit
At the end of February 2022 of FY2021-22, the YoY broad
money (M2) increased by 9.4 percent and reserve money
declined by 7.41 percent. During this time period, 30.36
percent growth of net foreign assets contributed to the YoY
growth of M2. Domestic credit increased YoY by 13.3 percent
in February 2022 of FY2021-22, which is higher than 9.06
percent growth in the same period of the previous fiscal year,
of which private sector credit growth stood at 10.87 percent
at the end of February 2022, vs. 8.93 percent in the same
period of the previous fiscal year.
in same period of the previous year. At the end of February
2022, credit to the public sector increased by 10.09 percent
as compared to 4.82 percent during the same period of the
prior year.
Interest rate
In order to enhance international competitiveness, ensure
a flourishing productive sector, and reduce classified loans
(NPLs), the rate of interest has been rationalised, limiting it
to single digit, except credit card loans. As a result, during the
COVID-19 pandemic, productive sectors did not face much
problem and the weighted average lending and deposit rates
show a downward movement, thus facilitating trade and
industry. The weighted average lending rate of commercial
banks declined continuously and stood at 7 percent. The
interest rate spread reduced to 3 percent from the earlier 5
percent.
External sector developments and outlook
The net credit to the government increased by 28.94 percent
at the end of February 2022, which increased by 10.64 percent
The improvement of the coronavirus situation due to robust
containment measures, rapid innovation of protective
vaccines, and broad-based implementation of inoculation
programs accompanied by the expansionary and supportive
policy measures generated a solid economic recovery-driven
demand at home and abroad. The external sector activities
of Bangladesh also witnessed a significant momentum in
FY2021-22. Both the export and import growth remained
robust during July-May period of FY2021-22 and stood at
34.09 percent and 39.01 percent, respectively.
Cumulative exports growth
Cumulative imports growth
Source: Export Promotion Bureau
20%
Jul-Jun
Jul-Apr
Jul-May
Jul-Mar
Jul-Feb
Jul-Jan
19.7%
Jul
Jul-Jun
Jul-Apr
Jul-May
Jul-Mar
Jul-Feb
Jul-Jan
Jul-Dec
Jul-Nov
Jul-Oct
-20%
Jul-Sep
-15%
Jul-Aug
0%
Jul
0%
The readymade garments (RMG) sector’s contribution of
around 82 percent of total export earnings growing by
34.87 percent, helped maintain the robust growth of overall
exports of the country. In addition, the share of exports of
home textiles, engineering and leather and leather products
39.0%
40%
Jul-Dec
15.1%
15%
FY-22
Jul-Nov
34.1%
Jul-Oct
30%
FY-21
60%
FY-22
Jul-Sep
FY-21
Jul-Aug
45%
Source: National Board of Revenue
were significant in the total exports. On the other hand,
amid extraordinary global commodity price hikes, the import
growth of industrial raw materials, including raw cotton, yarn,
textiles articles, pharmaceutical inputs, fertiliser, plastic and
rubber articles; iron, steel and other base metals, and capital
Annual Report 2022
265
Statutory Report
To ensure availability of less costly funds for banks and
rationalising the corridor of policy rates (the gap between
the repo and reverse repo rates), the repo and reverse repo
interest rates were reduced by 50 basis points and 75 basis
points to 4.75 percent and 4 percent, respectively, with effect
from 30 July 2020. However, the 360-day repo facility with
effect from 13 May 2020 was also introduced. The bank rate,
which remained unchanged for the last 17 years (since 2003)
has also been slashed by 100 basis points to 4 percent to
rationalise it with the current interest rate regime. CRR has
been reduced from 5.5 percent to 4.0 percent for domestic
banking operations, from 5.5 percent to 2 percent for offshore
banking operations, and from 2.5 percent to 1.5 percent for
financial institutions (FIs).
Higher volume and growth of imports over exports led to a
significant trade deficit during July-May period of FY2021-22.
Inward remittances, one of the vital factors for the stability
of the current account balance, registered a negative growth
mainly due to the COVID-19 pandemic-related job losses,
dislocations and the reduction of expatriates' working in
different countries, use of informal channels to some extent
and, above all, due to the base effect of the prior year's
massive inflows.
Cumulative remittance growth
Overseas employment
machinery predominantly ensures robust growth in overall
imports.
Source: Bangladesh Bank
75%
FY-21
55%
Source: Bureau of Manpower, Employment and Training
FY-22
1.2
36.1%
15%
-5%
-16.0%
-25%
Millions
35%
Others
1.0
GCC Countries
0.8
0.6
0.4
0.2
Due to the widening of the trade deficit amid relatively
moderate inflows of inward remittances, the current account
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
0.0
2008
Jul-Jun
Jul-May
Jul-Apr
Jul-Feb
Jul-Mar
Jul-Jan
Jul-Dec
Jul-Nov
Jul-Oct
Jul-Sep
Jul
Jul-Aug
-45%
Exports
the previous fiscal year.
In FY2020-21, total export earnings increased by 12.77
percent to US$ 40.11 billion over the prior fiscal year. During
the July-March period of FY2021-22, export earnings stood
at US$ 43.7 billion, which is 32.43 percent higher than the
export earnings of the same period of the previous fiscal year.
Exports receipt is estimated to cross US$ 50 billion in FY202122. During this period, commodity-wise growth of export
earnings show that earnings from almost all products have
increased compared to the last fiscal year (except jute and
building materials). Government initiatives to facilitate exports
were enhanced during COVID-19, including export incentives
being extended to new products.
Based on the latest trend of available data, it is anticipated
Imports
deficit expanded to USD 15.3 billion (3.3 percent of GDP)
during July-April period of FY2021-22.
In comparison, it was USD 1.7 billion (0.4 percent of GDP)
during the corresponding period of the prior fiscal year. Despite
relatively improved financial account balance, the overall
balance of payments witnessed a deficit of USD 3.7 billion
during July-April period of FY2021-22 (offsetting by some
USD 12 billion surplus in the financial account) compared to a
surplus of USD 7.5 billion during the corresponding period of
that the current account deficit might remain in the negative
territory by around USD 16.5 billion at the end of FY202223. However, increased outflow of wage earner remitters
amid improved economic and working conditions in source
countries on top of the base effect is expected to support
inward remittances growth by 15 percent in FY2022-23.
Export and import growth will also be moderated by the higher
base effect, accomplishing 13 percent and 12 percent growth
in FY2022-23, respectively.
As a result, the overall balance in FY2022-23 is anticipated
to be at a moderate deficit level, supported by a befitting
performance of the financial account.
266
Annual Report 2022
The total import payments in FY2020-21 stood at US$ 61.7
billion, 10.74 percent higher than the previous fiscal year. Up
to March 2022 of FY2021-22, total import payments stood
US$ 71.41 billion, 42.24 percent higher than the same period
of the prior fiscal year. Import payments is estimated to be
around US$ 80 billion in FY2021-22.
Overseas employment and remittance
The COVID-19 pandemic hit the overseas job market hard
and thus overseas employment declined to 2.18 lakh in
2020 from 7 lakh in 2019 (pre-pandemic year). However, as
travel restrictions gradually eased, overseas employment
rebounded after 2020. Overseas employment significantly
During the July-April period of FY2021-22, remittance
earnings were recorded at US$ 17.31 billion. The major portion
of remittance was received from the Middle East countries,
which has the largest Bangladeshi expatriate population.
During July-March 2022, the highest amount of remittance
was earned from the Kingdom of Saudi Arabia (21%), followed
by the US (16%), the UK (11%), UAE (9%), Kuwait (8%), Qatar (6%),
Malaysia (5%) and Italy (5%), among others.
Balance of payments (BoP)
Bangladesh’s trade deficit stood at US$ 22.8 billion in
FY2020-21, against US$ 17.9 billion in the pre-pandemic year
of FY2019-20. Trade deficit rose by 27.67 percent in FY202021, largely due to higher import payments resulting from high
commodity prices worldwide. During this time, current account
Appreciation/depreciation of domestic currency against
US$ in FY2021-22
balance deficit stood at US$ 3.8 billion on the back of robust
remittance inflows, as compared to US$ 4.7 billion deficit in
the previous fiscal year. Trade deficit during the July-February
period of FY2021-22 stood at US$ 22.3 billion, vs. US$ 12.4
billion during the same period of the last fiscal year.
Foreign exchange reserve
Bangladesh’s foreign exchange reserves reached a record
level of US$ 48 billion on 24 August 2021, largely due to huge
inward remittances and export earnings. However, as imports
kept increasing, the volume of foreign exchange reserves
declined by about US$ 4 billion since 24 August 2021. At the
end of April 2022 of FY2021-22, foreign exchange reserves
stood at US$ 44.1 billion.
Exchange rate
Bangladeshi currency, the Taka of BDT, experienced an overall
1.9 percent devaluation against the US dollar in the July-April
period of FY2021-22, as compared to that of FY2020-21. The
weighted average inter-bank rate stood at Taka 86.45 per
US$ on 30 April 2022, which was Taka 84.80 per US$ on 30
April 2021. Furthermore, the exchange rate against the USD
averaged 98.850 in December 2022, compared to 97.620
BDT/USD in the previous month (November 2022).
Effective exchange rate indices
Source: BB’s MPS FY2022-23
120
-9.2%
-4.8%
-3.5%
-2.0%
0%
4%
Capital market performance
The capital market in Bangladesh exhibited robust
performances during the first half (H1) of FY2021-22,
evidenced by improved growth in price indices, buoyant
turnover and expansion in market capitalization and issued
capital. The strong performance was partly aided by the
easy monetary policy, which supported liquidity in the capital
market during the same period. However, during the second
half of FY2021-22, the capital market indices experienced
May-22
-4%
Jun-21
-8%
80
Jun-20
0.3%
Jun-19
0.2%
Vietnam
Jun-18
Cambodia
-12%
98.8
90
Jun-17
Indonesia
REER
100
Jun-16
India
China
NEER
110
-5.6%
Jun-15
Malaysia
Index
Bangladesh
Source: Bangladesh Bank
(Base: 2015-16 = 100)
116.2
a declining trend with some fluctuations. In the backdrop of
recent rising inflation and exchange rate volatility, market
players and investors became cautious. They remained on the
side-line as the profit-taking spree continued.
The global capital markets index (MSCI emerging market)
witnessed a similar pattern with a solid rising trajectory during
FY2020-21 followed by a declining trend since June 2021
caused by lingering fears of rising prices and slowing economic
growth prospects originating from the Russia-Ukraine war.
Annual Report 2022
267
Statutory Report
increased to 6.17 lakh in 2021 and reached 3.23 lakh by March
2022. Considering worldwide mass vaccination programmes
and improvement of the COVID-19 situation, it is expected
that overseas employment will cross the pre-pandemic trend
in 2022. In FY2019-20, remittance inflows increased by 10.87
percent over the previous fiscal year to US$ 18.21 billion. In
FY2020-21, Bangladeshi expatriates’ remittance stood at
US$ 24.78 billion, which was significantly higher (36.10%) than
the previous fiscal year.
While the global markets, as observed by MSCI, seem to
have started correcting themselves during June-December
2021, the DSE index of Bangladesh increased significantly.
Bangladesh's capital market scored the fourth highest market
returns in June 2021-May 2022 period among some selected
peer countries.
of the COVID-19 period though it started to recover in FY202122. The implementation of the government's ongoing mega
projects, including the recent opening of the Padma Bridge,
is expected to boost private investment and employment,
bolstering the country’s GDP.
Investment (% of GDP) and GDP growth
Returns on capital market among selected countries,
FY2021-22
6
31
4
30
Investment
GDP growth (RHS)
Bangladesh Bank has been playing a pivotal role with various
supportive financial sector policies, backing the government's
stimulus packages to counteract the pandemic-induced
economic disruptions. The central bank emphasised on
ensuring enough loanable funds at low costs for banks and
NBFIs to ensure economic recovery from the pandemicrelated economic adversities.
The charts below exhibits that public investment as a percent
of GDP had an increasing trend in recent years, including the
COVID-19 periods, reflecting mainly the implementation of
the government's mega projects. On the other hand, private
investment as a percent of GDP declined in the last two years
FY 19
FY 18
FY 17
FY 16
0
Source: Bangladesh Bureau of Statistics
26
8.0
25
7.6
24
7.2
23
6.8
22
FY 19
FY 18
20
FY 22(p)
Private
Public (RHS)
21
FY 17
BSEC also revised margin loan rules for category-changing
stocks, reduced the lower limit of the circuit breaker, raised
the investment ceiling for institutional investors, and allowed
the Investment Corporation of Bangladesh (ICB) to use the
BDT 1 bn capital market stabilization fund. The BSEC also
successfully launched a separate platform, DSMEX, for the
SME market, which helped small companies grow without any
interest payment in their early stages.
2
Private and public investment (% of GDP)
FY 16
Bangladesh Securities and Exchange Commission (BSEC) took
many initiatives to restore investor confidence in the capital
market. For examples, banks were allowed to invest in the
private green Sukuk bonds from the capital market special
fund amounting to BDT 2 billion. The BSEC also organised
several roadshows in developed countries, such as the US, UK,
Switzerland and UAE to attract foreign investors.
Annual Report 2022
28
-9.0
FY 15
Philippines
Malaysia
Sri Lanka
Bangladesh
Thailand
India
Indonesia
-5.3
Pakistan
-1.8
-6
FY 15
29
FY 22(p)
2.4
FY 21
3.4
FY 21
3.9
FY 20
4.8
FY 20
5.9
-11
268
8
32
19.4
Taiwan
24
19
14
9
4
-1
Source: Bangladesh Bureau of Statistics
33
6.4
6.0
Bangladesh Bank continued to extend several liquidity
enhancement measures in FY2021-22 to recover the
investment momentum amid recurrent waves of the
pandemic. Softened loan classification rules, allowing loan
rescheduling and one-time exit facility, especially for the
agriculture loans, and lowering the interest rates on agriculture
and rural credit were among the key measures contributing to
investment recovery and employment generation. The central
bank’s policies equally focused on retention and creation of
new employment, supporting jobless people who suddenly
lost their jobs during the pandemic period in the last two
years. The key refinance schemes and their progress status as
of the end May 2022 are listed hereunder:
•
A refinance scheme of BDT 150 billion was allocated to
provide working capital loan/investment facilities for the
•
A revolving refinances scheme of BDT 100 billion was
introduced to provide loans for the affected CMSMEs
sector entrepreneurs, with 64.00 percent implementation
of the project
•
A refinance scheme of BDT 80 billion was provided as
working capital for the agriculture sector, where 81.89
percent of the first phase scheme was distributed to
185,336 farmers/agriculture farms
•
A revolving refinance fund of BDT 50 billion was provided
as a pre-shipment credit facility to export-oriented
industries, with an implementation rate of 14.37 percent
•
A refinance scheme of BDT 30 billion for low-income
professionals, farmers, and marginal/small business
owners registered 97.20 percent implementation based
on the demand received from banks; A refinancing
scheme worth BDT 5 billion was devised to pay salariesallowances to tourism sector workers in hotels, motels,
and theme parks
•
A new Export Development Fund (EDF) of USD 3.5 billion
for local exporters recorded 99.57 percent implementation
•
A refinance scheme of BDT 5 billion was created for
returnee expats who lost their jobs due to the pandemic
and other reasons was introduced to engage them in
income-generating activities
Forward outlook
The Medium-Term Macroeconomic Framework (MTMF)
2021-22 to 2024-25 has been formulated taking into
cognisance the dynamics of the global economy and the
impacts on the domestic sector. While the global economy
was recovering from the COVID-19 impairment, the war in
Ukraine has triggered loss of lives and livelihood in the war
zone and enforced supply bottlenecks in the rest of the world.
Countries are administering mass vaccination programs and
implementing incentive packages to address the unintended
effects of the pandemic on public health, global growth and
the commodity markets.
Notwithstanding the substantially diminished intensity of the
pandemic, the Bangladesh economy's recovery process is likely
to face some direct and indirect adversities due to the RussiaUkraine war. The war has heightened the potential losses of
export demand on the one hand, and the war-induced surge in
the commodity prices has led to higher import costs and trade
deficits, putting pressure on inflation and exchange rates on
the other hand.
So far, Bangladesh’s economy has exhibited strong resilience
against COVID-19 shocks and recovered the growth rate
quickly in FY2020-21 and FY2021-22. Bangladesh was
ranked 5th out of 121 countries in the Nikkei COVID-19
Recovery Index (as of 30 April 2022), while the country secured
the top position among the South Asian countries. Considering
the economic impact of the Padma Bridge, 7.50 percent real
GDP growth target seems consistent with the central bank’s
model-based GDP growth forecasts for FY2022-23.
In Bangladesh, the government has been implementing
several incentive/stimulus packages and timely policy decision
have helped successfully avert more damage from the
COVID-19 pandemic. In the medium-term, the government
expects to put emphasis on full economic recovery from the
fallout of COVID-19, address issues that have arisen from
the war in Ukraine and implement the 8th Five Year Plan, the
2030 agenda-SDGs, second perspective plan (2021-2041),
‘Delta Plan 2100’ and the ‘Blue Economy’ strategies. The
government is keen to restore the pre-pandemic economic
high growth trajectory and has set a GDP growth rate target
of 6.5% in FY2022-23.
Key statistics
Budget at a glance, 2022-23 (Tk. bn)
Total budget
6,780.64
- Operating (revenue) budget
4,184.47
- Development budget
2,596.17
Annual development programme (ADP)
2,460.66
Total revenue
4,330.00
- Tax revenue
3,880.00
- Non-tax revenue
450.00
Annual Report 2022
269
Statutory Report
affected large industry and service sectors. A total of 4,562
industries received the loans, and the implementation rate
based on the received loan demand from banks was 93.35
percent
Sectoral allocation of ADP 2022-23 (Tk. bn)
Sector
Allocation
% of total allocation
Human resources
721.64
29.3
Communication infrastructure
687.46
27.9
Agriculture and rural development
535.91
21.8
Energy infrastructure
259.37
10.5
Others
256.28
10.4
UN Review (2021)
Graduation threshold
$1,827
>$1,222
Human Assets Index (HAI)
75.3
>66
Economic and Environmental Vulnerability Index (EVI)
27.2
<32
LDC graduation status of Bangladesh
Indicators
Per Capita GNI (3 years’ avge.)
Source: Bangladesh Selected Statistics, July 2022, by Bangladesh Bureau of Statistics
Financial review
investment choices.
Overview of the year
On the other hand, the anxiety over increasing cost of credit
and the need to revisit growth plans put on hold by the
pandemic forced corporates to avail credit and lock a relatively
lower interest rate. The same was true for retail customers
too.
City Bank continues to play an important role in society and in
the economy and this has been elevated during the COVID-19
crisis as the Bank remained a systematically large financial
institution supporting economic recovery and banking sector
stability.
We remain committed to delivering on our purpose of
harnessing our financial expertise to do good and to contribute
to the well-being and growth of the societies in which we
operate by creating value for our employees, customers and
clients, shareholders, regulators and communities.
The financial year under report, 2022, was one that witnessed
a substantial swing-back from the previous two years of
the pandemic. Monetary loosening gave way to monetary
tightening as Bangladesh Bank, the central bank of Bangladesh,
raised the repo rate (or repurchase rate) to the current level
of 6% and the reverse repo rate to 4.25% (as on April 2023),
as part of its policy stance to ensure 7.50% headline inflation
ceiling for FY2023.
The policy rate hike had the desired impact, with liquidity being
sucked out of the banking system that made banks scramble
for funds. In this endeavour, banks were successful in shoring
their liquidity levels, which was further triggered by retail and
corporate customers choosing bank deposit products for their
savings needs amid a lacklustre capital market and limited
270
Annual Report 2022
Thus, the country’s overall banking system witnessed
substantive growth in both loans & advances, and deposits.
However, what distinguished the good banks from the others
was their timing and ability to reprice credit to sustain their net
interest margin.
At City Bank, the year 2022 was a satisfactory one with sound
performance that helped the Bank maintain its financial
position and enabled sustenance of key financial metrics. The
prime amongst this was the growth accomplished in both
deposits and loans & advances, which expanded by 18% and
24%, respectively during the year.
Growth in deposits was heartening as it attested to the
maturing reputation of the Bank in garnering retail deposits,
despite rates offered being at the mid-market levels. This
growth had a huge impact on CASA (Current Account Savings
Account) that rose to 51% in 2022, up from 46% in the prior
year, thus helping the Bank enlarge its pool of low-cost funds.
This also helped support the growth achieved in loans &
advances, with healthy credit offtake registered across almost
all segments of the Bank, with the notable ones being digital
nano loans, SME-S loans, retail loans and corporate loans
Thus, healthy growth was accomplished in the Bank’s total
consolidated operating income at Tk. 25,659 mn in 2022,
vs. Tk. 21,403 mn in the prior year. Yet, significant increase
registered in the cost of operations due to an inflationary
environment - from Tk. 10,403 mn in 2021 to Tk. 12,677
mn in the year under review, which, amongst other factors,
compressed net profit, which stood at Tk. 4,508 mn in 2022,
vs. Tk. 4,743 mn in 2021.
The forward outlook appears relatively optimistic as the
Bank remained in a capital accretion mode in 2022 which
has ensured sufficient capital and liquidity availability for
expanding credit growth in 2023. While the overall macroenvironment remains challenged due to the ongoing RussiaUkraine war, strong policy steps taken by the government will
help create a conducive environment for growth. Thus, the
Bank is cautiously positive on the growth prospects for 2023.
Some of the key facets of the financial performance of the
Bank in 2022 is discussed below.
Interest income: City Bank’s total interest income expanded
from Tk. 21,053 mn in 2021 to Tk. 25,833 mn in 2022. This
was primarily on account of all the business segments of the
Bank accomplishing growth, with industrial credit, short-term
loans, personal finance and loans to SMEs bringing in the lion’s
share of the interest income or profit on investment.
Interest paid: City Bank’s total interest paid rose significantly
from Tk. 8,676 mn in 2021 to Tk. 13,198 mn in 2022, with the
increased outflow primarily attributed to increase in deposits
and borrowing costs, etc. The share of interest payments for
fixed deposits comprised the largest quantum of the interest
expense at Tk. 55,683 mn in 2022, vs. Tk. 36,906 mn in the
prior year. Furthermore, costs for scheme deposits, current
bank deposits and interest payments on offshore borrowings
breached the Tk. 10,000 mn-mark, standing at Tk. 11,392 mn
(vs. Tk. 951 mn in 2021), Tk. 10,349 mn (vs. Tk. 453 mn in
2021) and Tk. 10,900 mn (vs. Tk. 426 mn in 2021), respectively,
indicating the severity of impact due to increase in interest
rates and credit costs.
Net interest income (NII): The Bank’s NII rose by 2.6% from
Tk. 12,048 mn in 2021 to Tk. 12,359 mn in 2022, comprising
net addition of Tk. 311 mn. Excellent growth in interest income
during the year was however offset by much higher growth in
interest paid, which limited the expansion in the NII, though
growth remained in the positive territory.
Total operating income: City Bank’s total operating income
grew from Tk. 21,403 mn in 2021 to Tk. 24,588 mn in 2022.
This is attributable to sound growth achieved in three out
of four components that make up the operating income
comprising net interest income, investment income and noninterest income, including commissions, brokerage. etc. The
only exception was other operating income that declined
during the year due to decline in credit card income on the back
of lower merchant commissions, etc.
Operating expenses: The total operating expenses of the Bank
climbed to Tk. 12,761 mn in 2022 from Tk. 10,403 mn in the
prior year. High inflation sparked a rise in almost all the major
expense heads, most notably in salaries and allowances that
rose to Tk. 6,977 mn in 2022 from 6,074 mn in the prior year,
expanding by almost 15% YoY. However, the Bank continued
to focus on cost discipline and expense management that
yielded results in terms of enabling the Bank to keep control
over its business costs.
Pre-provision profit and provisions: The Bank’s profit before
provision rose from Tk. 11,000 mn in 2021 to Tk. 11,827 mn
in 2022 on account of both the factors of faster growth in total
operating income and slower expansion in operating costs.
The Bank provided for increased provisions kept aside for
loans and advances as a measure of abundant caution. Thus,
total provisions rose from Tk. 2,546 mn in 2021 to Tk. 2,943
mn in 2022. This comprises a cautious measure adopted by
the Bank, with provisioning coverage ratio exceeding 100%.
However, the potential future release of provisions will
contribute handsomely to the net profit of the Bank.
Taxation: The Bank’s total tax provision rose from Tk. 3,717
mn in 2021 to Tk. 4,377 mn in 2022. While the current tax
expenses declined to Tk. 4,152 mn in 2022 vs. Tk. 4,515 mn in
2021 due to lower corporation tax rate, there was a reversal
in deferred tax provided with booking of expenses to the tune
of Tk. 225 mn for the year from an income in the last year on
account of timing difference arising between the tax base of
assets/liabilities and their carrying value, as per IAS-12.
Profitability: Despite a period of uncertainty and volatility due
to the ongoing geopolitical crisis in Europe, coupled with a high
interest rate and inflation environment, the Bank performed
satisfactorily to achieve a Tk. 4,508 mn net profit in 2022, as
against Tk. 4,743 mn in the previous year. The marginal decline
Annual Report 2022
271
Statutory Report
that registered credit growth of 106%, 58%, 28% and 24%,
respectively. Furthermore, tight credit screening standards
helped contain non-performing loans (NPLs) between 1-3%
amongst the various business divisions, with the overall Bank
NPL standing at 3.9% during the year.
in profitability can be ascribed to potential loss in other income
comprising brokerage, etc., due to capital market weakness
and forex loss, as well as higher provisions.
The Bank will put full emphasis on recovery of profitability in
the current year and has created strategies and plans that will
potentially support growth in sustainable profitability in 2023
and beyond.
Earnings per share (EPS): The Bank’s EPS moderated to BDT
3.75 in 2022, from BDT 3.95 in the prior year, attributed to
lower profitability.
Total assets: City Bank’s total assets stood at BDT 506,847
mn as on 31 December 2022, as against BDT 416,902 mn as
on 31 December 2021.
Loans and advances: The Bank’s total loans and advances
grew from BDT 286,380 mn as on 31 December, 2021 to Tk.
354,774 mn as on 31 December, 2022.
making is to maximise on opportunities to increase investors'
wealth.
Notwithstanding the continuous obstacles posed by the
pandemic and major geopolitical upheavals, City Bank reported
an overall strong performance in 2022. This performance
illustrates not just the Bank's accomplishments in robust
organisational superintendence, but also its commitment
to building solid growth foundations that will help the Bank
remain on the path of sustainable value accretion.
In addition, the Bank was able to adapt successfully to a rising
interest rate environment, adjusting its lending costs well
to preserve NII and NIM expansion. In addition, the Bank's
prudent capital allocation strategy has produced satisfactory
return ratios, which bodes well for the future. In addition,
strong credit screening standards and collections efficiency
has enabled the Bank to lower its NPL by a significant factor of
100 basis points in 2022.
Deposits: City Bank’s total deposits rose from BDT 282,064
mn as on 31 December, 2021 to Tk. 331,890 mn as on as on
31 December, 2022. This growth reflects growing trust and
faith of deposit-holders in the Bank, with current accounts
and other accounts reflecting the highest growth from Tk.
53,813 mn in in 2021 to Tk. 86,013 mn in 2022 and savings
bank deposits also exhibiting a sharp run from Tk. 72,478 mn
in 2021 to Tk. 80,589 mn in 2022.
In the prevalent environment, despite the persisting macro
challenges, as the economic recovery gains ground in
Bangladesh due to the sheer resilience of the economy, the
Bank is concentrating on accelerating its growth momentum
and remaining on the path to being Bangladesh's premier
digital bank for the all.
Cost-to-income: City Bank’s cost-to-income ratio increased
to 51.9% in 2022, as against 48.6% in the prior year. This is due
to a sharp inflation-driven increase in expenses, and with the
normalisation of inflation, the cost-to-income will also reflect
moderation due to lowering operating costs and expenses.
Bangladesh Bank (BB)
NPLs: The Bank’s total percentage of non-performing loans
over total loans & advances stood at 3.9% in 2022, vs. 4.9% in
the prior year. This comprises a significant achievement as the
Bank was able to improve credit quality despite a challenging
macroeconomic environment. The pristine asset quality of the
Bank is amongst the best in Bangladesh’s domestic banking
sector.
ROE and ROA: City Bank’s return on equity (ROE) declined
from 15.8% in 2021 to 14.1% in 2022. Return on assets (ROA)
also moderated from 1.2% in 2021 to 1% in 2022. Notably,
these return ratios were relatively stable, reflecting the solid
foundations of the Bank.
Dividend: City Bank is devoted to long-term shareholder value
creation. The goal driving the Bank's long-term decision-
272
Annual Report 2022
Source for data pertaining to the industry:
Bangladesh Bureau of Statistics (BBS https://www.newagebd.
net/article/161495/pvt-sector-credit- growth-slightly-upin-dec
Financial reporting
The Directors of the bank confirm compliance with the financial
reporting framework for the following:
•
The financial statements, prepared by the management
of City Bank make a fair presentation of its activities,
operational details and results, cash flow information and
changes in equity structure.
•
Proper books of account as required by law have been
maintained by City Bank.
•
Appropriate
Accounting
Standards
Standards
accounting policies, including International
Standards (IAS). Bangladesh Accounting
(BAS)/ International Financial Reporting
(IFRS)/ Bangladesh Financial Reporting
been consistently applied in preparation of the financial
statements. Any change or deviation has been adequately
disclosed.
•
Accounting estimates and underlying assumptions are
made on reasonable ground and prudent judgment and
•
Segment-wise or Product-wise performance
Our business segments and their performances during 2022
has been thoroughly discussed in the ‘Segmental Performance’
section of the report on page 104.
Shareholding pattern of the bank
are reviewed on an ongoing basis.
Shares held by directors and ownership composition
Being responsible for preparation and fair presentation
•
Information is provided in Corporate Governance section
Shares held by CEO, CFO, Company Secretary and Head of
Internal control & compliance and their spouses
•
Information is provided in Corporate Governance section
Shares held by top-5 salaried executives of the bank
changes in equity.
•
Information is provided in Corporate Governance section
No significant doubt exists upon the Company’s liability
There is no shareholder in the bank who is holding 10% or
more voting interest in City Bank. Hence, the corresponding
BSEC rule does not apply.
of the financial statements, the management of the bank
asserts that the financial statements prepared by the
management as at and for the year ended 31 December,
2022 present fairly, in all material respects, its state
of affairs, the results of its operations, cash flows and
•
to continue as a going concern. City Bank has neither
intention nor the need to liquidate or curtail materially the
scale of its operations. Hence, the financial statements of
the bank have been prepared on the assumption that the
bank is a going concern and will continue in operation for
the foreseeable future.
Attendance in the Board Meeting in 2022
During the year 2022, a total of 26 Board Meetings were
held and detailed information of that is provided in Corporate
Governance section.
Attendance in the Board’s Audit Committee Meeting in 2022
During the year 2022, 7 Audit Committee Meetings were
held and detailed information of that is provided in Corporate
Governance section.
Attendance in the Board’s Risk Management Committee
Meeting in 2022
During the year 2022, 10 BRMC Meetings were held
and detailed information of that is provided in Corporate
Governance section.
Honorarium paid to Directors including Independent
Directors
Honorarium paid to directors including independent directors
for attending meeting according to Bangladesh Bank’s BRPD
Circular No 11/2015 is shown in note no. 37 of the financial
statements
Declaration and Distribution of Dividend
Dividend declaration and distribution are made according
to board approved bank’s dividend policy, which is aligned
with prevailing rules and regulation. Bank’s dividend policy is
disclosed in its website and it can be visited through clicking
the link https://www.thecitybank.com/investor-relation
Related party transactions
The bank in its ordinary course of business undertook financial
transactions with some entities or persons that fall within the
definition of ‘Related Party’ as contained in IAS 24 (Related
Party Disclosures) and relevant provisions of Bank Company
Act, 1991 and Bangladesh Bank BRPD Circular No. 14 dated
25 June, 2003. As on the reporting date, the bank had funded
and non-funded exposures with its subsidiaries, non-funded
exposures to some current and ex-directors and credit card
limit to some of its Directors. Besides, the bank had procured
some goods and services from the entities of related party (ies)
during 2022. Please refer to note 51 Related Party Disclosures
of financial statements for details of the transactions.
Protection of interest of minority shareholders and effective
means of redress
The bank is operated in accordance with the Articles of
Association and all applicable laws and regulations of the
land to ensure the greater interest of all shareholders of the
bank. The bank is committed to sound governance practices
Annual Report 2022
273
Statutory Report
Standards (BFRS), as applicable in Bangladesh, have
based on integrity, openness, fairness, professionalism and
accountability in building confidence among stakeholders.
However, any complaint received at AGM or throughout the
year, from any shareholders, is resolved lawfully in time.
Risk management
City Bank’s Board recognizes the importance of ongoing
identification and management of risk in order to build and
maintain the bank’s sound financial and reputational condition.
Risk is an inherent component of City Bank’s activities. The
ability to effectively identify, assess, measure, respond,
monitor and report on risk in activities is critical to the
achievement of the bank’s mission and strategic objectives
and is a core part of the bank’s risk governance framework.
Such a holistic risk management approach reflects the
bank’s values, influences organizational culture and guides
day-to- day as well as strategic operations. It is captured
in policy statements, Board and management directives,
operating procedures and training programs, while also being
demonstrated in daily activities by the management and
employees.
At City Bank, enterprise risk management is a set of structured
and consistent risk management processes that are applied
across the bank. This program helps identify, assess and
priorities and provides a formal structure for ensuring that
internal and external risks that impact the organization are
adequately identified, controlled and documented for future
reference.
Further, as part of our risk governance framework, the
enterprise risk management program is structured around
a formal approach that is aligned with the bank’s profile and
strategic objectives. Moreover, it also produces various risk
mitigation activities within the business units. The resulting
strategic, financial and operational risk mitigation activities
that have been implemented reinforce the bank’s operations
and sustainability, thus reducing the potential for unexpected
losses and assisting in managing volatility better. The Board
has the overall responsibility for the establishment and
oversight of the bank’s risk management framework.
274
Annual Report 2022
Contributions to national growth and development
As a bank that is closely integrated with the developmental
journey of Bangladesh, City Bank has placed honest focus on
making sustainable contributions to the country’s growth and
development. The bank recognizes its public responsibility of
fulfilling its obligations to assist the Government in meeting
certain key objectives, including those centered on reducing
social inequality, infrastructure development, etc.
Going forward, City Bank will uphold its responsibility and
reputation as a key partner of the Government in achieving
public welfare objectives.
Acknowledgments
After a few challenging years for City Bank, the Board was most
encouraged by the turnaround in performance in 2022, and I
express my heartfelt appreciation and compliments to our MD
& CEO, CFO, and the other members of the executive team for
their outstanding performance, fortitude and leadership.
Our Non-Executive Directors provide invaluable independent
insight and guidance across strategic, governance and
commercial issues and I thank each of them for their strategic
contributions.
Thank you to our shareholders for your conviction in our
investment case, and we warmly welcome those who invested
for the first time during the year.
To our broader stakeholders, including our staff, customers,
suppliers, industry regulators and communities, thank you for
your support, interest and engagement with City Bank.
I seek your continued support in 2022, in what will be a
challenging year.
Kind regards,
Aziz Al Kaiser
Chairman
Statutory Report
ECONOMIC IMPACT REPORT
This section refers to the value creation processes that the
Maintaining capital adequacy
bank has incorporated within to ensure balance in meeting
Capital to Risk Weighted Assets Ratio (CRAR) is the measure
of the financial strength and sustainability of a bank. It limits
the extent up to which banks can expand their business in
terms of risk weighted assets. Bank’s capital is the ‘cushion’
for potential losses, which protects the bank’s depositors or
other borrowers. Thus, capital management is considered as
an integral part of risk management of the bank. In this regard,
Bangladesh Bank uses CRAR as a mechanism to protect
depositors and enhance confidence in the banking system.
Regulatory capital requirements are therefore necessary to
limit operations of banks to prevent overtrading. At the same
time, banks can leverage their growth to improve the return on
assets. Therefore, maintaining a healthy CRAR would ensure
a stable and sound banking industry, which undoubtedly
contributes to the growth of the economy.
Please refer to Notes to the Accounts Point 17.5 on page 390
(Capital Adequacy Ratio-The City Bank Limited) for the capital
adequacy computation of The City Bank Limited as at 31
December, 2022.
stakeholder’s expectations. City Bank creates value through
provision of financial services in line with its vision, ‘The
Financial Supermarket with a Winning Culture Offering
Enjoyable Experiences.’ Considering the keen sense of changing
market dynamics, the bank aligns its own systems, processes
and procedures to check, verify and validate the value creation
process. The bank conducts its business in a transparent and
ethical manner in line with the best industry practices, while
being fair to every stakeholder. The bank is mindful of the
need to add value on a sustainable basis to all stakeholders
in its value creation process. It has not been a case of building
financial value and enhancing the bottom line at any cost for
the bank, but participating in a process of creating sustainable
value through fair and ethical means.
Some of the measures taken to create, sustain and deliver
value are as follows:
Value Added Statement
Value Added is the wealth accretion made by City Bank. through providing banking and other financial services in 2022 for its
employees, government and shareholders in the form of salaries & allowances, duties & taxes and net profit after tax respectively
and also indicates value of use of fixed assets through depreciation.
BDT mn
Particulars
Income from Banking Services
Less: Cost of Services and Supplies
Value Added by the Banking Services
Non-Banking Income
2022
%
2021
%
37,775
30,065
(17,858)
(11,879)
19,917
18,186
10
16
Loan Written off and Provision
(2,943)
(2,546)
Total operating income
16,985
15,656
Distribution of Value Addition
To Employees as Salaries & Allowances
7,002
41.2%
6,094
38.9%
To Shareholders
3,921
23.1%
4,358
27.8%
To Govt. as Income Tax
4,377
25.8%
3,712
23.7%
45
0.3%
88
0.6%
To CSR fund
245
1.4%
-
0.0%
To Perpetual Bondholders
297
1.7%
298
1.9%
To Start up fund
To Depreciation
1,101
6.5%
1,107
7.1%
16,987
100.0%
15,656
100.0%
Annual Report 2022
275
Wealth Distribution %
1.7%
1.4%
6.5%
0.3%
7.1%
1.9%
0.6%
2022
41.2%
25.8%
2021
23.7%
23.1%
To Employees as Salaries & Allowances
To Govt. as Income Tax
To Perpetual Bandholders
To Shareholders
To Start up fund
To CSR fund
Depreciation
Economic Value Added Statement
Economic Value Added (EVA) is the measures of financial
performance of an organization. It is based on the principle
that since a company’s management employs equity capital to
earn a profit, it must pay for the use of this equity capital. This
management tool is useful to shareholders in particulars and
other stakeholders in general to take decision for increasing
wealth.
38.9%
27.8%
To Employees as Salaries & Allowances
To Govt. as Income Tax
To Start up fund
To Shareholders
Depreciation
To Perpetual Bandholders
EVA is equal to profit after tax plus the provision for loans
and other assets less written off during the year minus cost
of equity where cost of equity is the opportunity cost that
the shareholders forego. This cost of equity is calculated
considering risk free rate based on weighted average rate
of 20 Years Treasury Bills/bonds issued by the Bangladesh
Government plus 2% risk premium. City Bank management is
concerned for maximizing of wealth of its shareholders and
other equity providers.
BDT mn
Particulars
2022
Shareholders' Equity
2021
32,845
Add: Provision for Loans and Advances
Average Shareholders' Equity
31,224
14,314
12,527
47,159
43,751
45,455
41,432
4,508
4,743
Earnings
Profit after Tax
Add: Provision for Loans and Others
Average cost of equity (based on weighted average rate of 20 Years Treasury
Bills/bonds issued by the Bangladesh Government plus 2% risk premium)
Economic Value Added
Remunerative dividend policy
The bank continued to pay a substantial dividend to its
shareholders while ploughing back sufficient profits to augment
the funding needs and capital adequacy requirements. The
bank is careful of the need to strike a reasonable balance
between these aspects in maintaining sustainable growth,
commensurate with the risks undertaken by its investors. This
prudent dividend policy has contributed in building the bank’s
276
Annual Report 2022
2,943
2,546
7,450
7,289
10.24%
8.07%
4,653
3,344
2,798
3,945
shareholders’ funds to the present level and it is considered
as one of the major funding sources of the Bank’s expansion.
Considering the performance of the bank over the past year,
the Board of Directors has recommended 10.0% cash dividend
and 2.0% stock dividend for the year 2022.
Maintaining satisfactory liquidity
The bank maintains liquid assets to carry out the day-to-day
operations and fulfil the statutory requirements imposed by
Optimum utilization of resources
The bank is mindful of mobilizing the scarce resources such as
capital, deposits and borrowings at attractive terms. The bank
is vigilant in mobilizing the resources in the most cost efficient
manner and is cognizant of the need for prudent investment
of funds for the improvement of profitability. Hence, it carefully
analyses the lending propositions and makes sure follow up
action is in place before disbursement of funds.
Cost/income ratio reported by the bank, which is one of
the lowest among any local commercial bank, testifies the
optimum utilization of resources. The Bank’s shareholders’
equity stood at BDT 32,845 mn as at 31 December, 2022,
mainly due to the initiatives taken, such as prudent dividend
policy, tax planning and controlled capital and revenue
expenditure over the years.
Market Value Added Statement
Market Value Added Statement reflects a company’s performance evaluated by the market through the share price. This amount
is derived from the difference between market capitalization and book value of shares outstanding. It signifies the enhancement
of financial solvency as perceived by the market.
BDT mn
Particulars
2022
No. of Shares Outstanding
2021
1,200,606,743
1,067,205,994
Market Value Per Share (BDT)
21.80
27.30
Face Value Per Share (BDT)
10.00
10.00
Total Market Capitalization
26,173
29,135
Book Value of Paid Up Capital
12,006
10,672
Market Value Added
14,167
18,463
Financial goals and performance
Particulars
BDT mn
2022
Goals
2021
Achievement
Goals
Achievement
Loans and advances
350,342
354,774
327,074
286,380
Deposits
329,984
331,890
303,361
282,064
13.5%
14.5%
14.7%
14.2%
4.2%
3.9%
5.1%
4.9%
4,502
4,508
4,004
4,743
Cost to income ratio
56%
51.9%
61.3%
48.6%
Return on Assets (ROA)
1.0%
1.0%
1.0%
1.2%
Return on Equity (ROE)
13.7%
14.1%
13.8%
15.8%
Capital Adequacy Ratio
% of NPL
Profit after tax
Annual Report 2022
277
Statutory Report
the regulator. The Asset and Liabilities Committee of the bank
(ALCO) monitors the situation carefully and provides direction
to maintain an optimum trade-off between liquidity and
profitability.
Our policy is to carry a positive mismatch primarily in 1-30
days’ category in interest earning assets and interest bearing
liabilities. Our liquidity remained at optimum levels during the
year. The statutory liquidity ratio stood at 19.1% (required
13.0% of total demand & time deposits) in December 2022.
SHAREHOLDER SERVICE
Stock details
Particulars
Dhaka Stock Exchange (DSE)
Chittagong Stock Exchange (CSE)
Stock Symbol
CITYBANK
CITYBANK
Company Code
11102
22006
Listing Year
1986
1995
Market Lot
1
1
Market Category
A
A
Electronic Share
Yes
Yes
Distribution of shareholders
Status
Composition
No. of shares
% of total shares
General public
452,675,820
37.70%
Directors and sponsors
368,750,592
30.71%
Institutions
315,653,778
26.29%
Foreign shareholders
63,526,553
5.29%
1,200,606,743
100.00%
Total
As of 31 December, 2022
Classification of shareholders by holding
2022
Particulars
No. of
shareholders
No. of shares
2021
% of total
holding
No. of
shareholders
% of total holding
01 - 500 shares
14,441
2,056,986
0.17%
15,322
0.20%
501 - 5,000 shares
11,564
20,437,654
1.70%
11,681
1.89%
5,001 - 10,000 shares
1,782
12,462,939
1.04%
1,892
1.28%
10,001 - 20,000 shares
1,157
16,157,990
1.35%
1,113
1.48%
20,001 - 30,000 shares
422
10,453,618
0.87%
414
0.97%
30,001 - 40,000 shares
197
6,845,223
0.57%
190
0.62%
40,001 - 50,000 shares
128
5,887,467
0.49%
142
0.61%
50,001 - 100,000 shares
278
19,657,918
1.64%
284
1.89%
100,001 - 1,000,000 shares
333
107,201,784
8.93%
334
9.76%
Over 1,000,000 shares
136
999,445,164
83.25%
131
81.31%
30,438
1,200,606,743
100.00%
31,503
100.00%
Total
278
Annual Report 2022
“CITYBANK”. Market price of shares of the Bank on the Dhaka
As a publicly traded company, the issued ordinary shares of
City Bank are listed on the Dhaka Stock Exchange Limited
and Chittagong Stock Exchange Limited. The audited Income
Statement for the financial year ended 31 December, 2022
and the audited Balance Sheet of the Bank as at 31 December,
2022 have been submitted to the Dhaka Stock Exchange &
Chittagong Stock Exchange within the permitted timeframe.
The stock exchange code for City Bank shares is
December, 2022.
Stock Exchange was BDT 21.8 on close of business on 31
The Bank’s market capitalization at 31 December, 2022 was
BDT 26,173 m, which is 3.6% of total banking sector’s market
capitalisation on the DSE. The domestic banking industry
constituted 15% of the total market capitalization.
(Source: Monthly Review of December, 2022).
Share price information of City Bank
DSE
Month
Month High
CSE
Month Low
Total Volume
(Number)
Month High
Month Low
Total
Volume on
DSE & CSE
Total Volume
(Number)
Jan-22
28.00
27.10
12,202,507
28.10
27.00
491,172
12,693,679
Feb-22
27.60
25.80
8,170,410
27.60
25.90
509,146
8,679,556
Mar-22
26.90
25.60
8,044,351
26.70
25.80
434,386
8,478,737
Apr-22
28.20
25.10
27,131,378
28.20
25.30
660,966
27,792,344
May-22
28.10
22.50
10,948,623
28.10
22.50
430,427
11,379,050
Jun-22
23.90
22.60
12,886,621
24.00
22.60
1,572,482
14,459,103
Jul-22
22.90
21.80
8,556,867
22.80
21.80
647,752
9,204,619
Aug-22
23.10
21.90
17,068,810
22.90
22.00
948,681
18,017,491
Sep-22
23.10
22.70
17,827,426
23.00
22.70
594,901
18,422,327
Oct-22
22.80
21.80
10,885,680
22.80
22.00
169,190
11,054,870
Nov-22
22.40
21.80
6,191,629
22.40
22.00
198,542
6,390,171
Dec-22
21.80
21.80
636,314
22.00
22.00
13,345
649,659
Source: DSE Monthly Review & CSE Bazaar Porikrama
Share price information of City Bank
25
Price (BDT)
20
15
10
5
0
Close Price
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
Volume
Volume
30
1,000,000
500,000
0
Annual Report 2022
279
Statutory Report
Exchange listing/Share trading
Dividend declaration and distribution
40th Annual General Meeting
Notice date
11 April, 2023
Proposed 10.0% cash and 2.0% stock dividends in respect of FY2022
Record date
10 May, 2023
40th Annual General Meeting
To be held on
07 July, 2023
Taxation on dividend income
•
If the shareholder is a non-resident (other than
Bangladeshi) person, other than company, at the rate of
30%.
•
Since stock dividend is out of the loop of withholding tax
deduction, its effective rate of return is much higher than
cash dividend.
Stock dividend is tax exempted. In case of cash dividend, the
following is the current deduction of tax at source on dividend
income according to the latest Finance Act 2022:
•
•
If the shareholder is a company, either resident or nonresident, at the rate applicable to the company, i.e. 20%.
Taxation arising from capital gain
If the shareholder is a resident or non-resident
Capital gain arising from transfer or sale of Government
securities is tax exempted. Capital gain arising from transfer
or sale of stocks and shares of public companies listed on the
stock exchanges is taxable at the rate of 10%.
Bangladeshi person, other than company, at the rate of
10% (ten percent) if the recipient furnishes his 12-digit TIN
Certificate, if not 15% is applicable.
Financial calendar for quarterly results
Particulars
Submission Date to BSEC
Audited Consolidated Results for the 4th quarter ended 31 December 2022
30-Apr-23
Unaudited Consolidated Financials for the 3rd quarter ended September 30, 2022
30-Oct-22
Unaudited Consolidated Financials for the 2nd quarter and half year ended June 30, 2022
31-Jul-22
Unaudited Consolidated Financials for the 1st quarter ended March 31, 2022
280
Annual Report 2022
12-May-22
Consolidated segment reporting
BDT mn
2022
Particulars
Bank
(Solo)
City
Brokerage
City Bank
Capital
Resources
CBL
Money
Transfer
City Hong
Kong
Intercompany
adjustment
Bank
(Conso)
Taka
Taka
Taka
Taka
Taka
Taka
Taka
Net interest income/profit on investments
12,359
85
155
(9)
16
-
12,607
Other operating income
12,229
430
255
246
30
(138)
13,051
Total operating income
24,588
515
411
237
46
(138)
25,659
(12,761)
(230)
(127)
(162)
(39)
27
(13,292)
Operating profit
11,827
285
284
74
7
(110)
12,367
Total provision
(2,943)
(30)
(17)
-
-
-
(2,989)
8,884
255
268
74
7
(110)
9,378
Provision for taxation
(4,377)
(130)
(70)
(20)
-
-
(4,597)
Profit after tax (PAT)
4,508
125
198
54
7
(110)
4,781
Segment loans & advances/investments
354,774
1,049
1,104
-
805
(1,437)
356,295
Segment assets
506,847
5,182
4,934
5,608
1,015
(8,675)
514,912
Segment Deposits & other accounts
331,890
558
149
-
-
(711)
331,886
Segment liabilities and shareholders' equity
506,847
5,182
4,934
5,608
1,015
(8,675)
514,912
Total operating expenses
Profit before tax (PBT)
Segment reporting - City Bank
Particulars
Total operating profit (profit before
unallocated expenses and tax)
Allocated expenses
Provision against loans and
advances
Profit before tax
2022
BDT mn
2021
Conventional
Islamic
Offshore
23,258
1,056
274
(12,667)
(91)
(2,655)
7,936
Conventional
Islamic
Offshore
24,588
20,489
516
398
21,403
(3)
(12,761)
(10,306)
(76)
(21)
(10,403)
(220)
(68)
(2,943)
(2,555)
(18)
27
(2,546)
745
203
8,884
7,628
423
404
8,455
Provision for taxation
Net profit
Total
Total
(4,377)
(3,712)
4,508
4,743
Segment loans & advances/
investments
297,441
17,542
39,791
354,774
245,186
7,566
33,628
286,380
Segment assets
430,115
35,089
41,644
506,847
357,791
21,951
37,160
416,902
Segment Deposits & other
accounts
295,664
32,884
3,342
331,890
260,479
21,059
526
282,064
Segment liabilities
430,115
35,089
41,644
506,847
357,791
21,951
37,160
416,902
Annual Report 2022
281
Statutory Report
SEGMENT ANALYSIS
Segment analysis of Revenue
1.1%
1.9%
2022
4.3%
Conventional
Islamic
94.6%
2021
2.4%
Offshore
Conventional
Islamic
95.7%
Offshore
Segment analysis of asset
8.2%
8.9%
2022
6.9%
Conventional
282
Annual Report 2022
Islamic
84.9%
Offshore
2021
5.3%
Conventional
Islamic
85.8%
Offshore
Statutory Report
DIRECTORS’ RESPONSIBILITY
STATEMENT
As custodians of stakeholder trust, the Board of Directors
of City Bank is appointed to act for and on behalf of the
shareholders to oversee the day-to-day affairs of the business.
The Board is directly accountable to the shareholders, and
each year, the Bank holds an Annual General Meeting (AGM), in
which the Directors provide a report to the shareholders on the
performance of the Bank and its future plans and strategies,
while also submitting their nomination for re-appointment to
the Board.
The report of the Bank’s affairs and the Audited Financial
Statements duly certified by a reputed Auditor are placed
before the Annual General Meeting (AGM) for discussion.
In preparing the Annual Report, the Board of Directors is
required to ensure that:
•
The financial statements of the Bank present a true and
fair view of the state of affairs of the business and the
results of its operations, cashflows and changes in equity
•
Proper books of accounts have been maintained as
required by relevant laws
•
Appropriate accounting policies have been consistently
applied in preparation of the financial statements and that
the accounting estimates are based on reasonable and
prudent judgment
•
International accounting standards, as applicable in
Bangladesh, have been followed in preparation of the
financial statements
•
The internal control system is sound in design and
effectively implemented and monitored
•
There are no significant doubts upon the Bank’s ability to
continue as a going concern
•
Key operating and financial data of the preceding 5 years Please refer to ‘Historical Performance’ on page 120
•
Proposed 10.0% cash and 2.0% stock dividend for the year
2022
•
Number of Board meetings held during the year and
attendance by each Director – Please refer to the
‘Corporate Governance’ section on page 286
•
Shareholding patterns of the Bank:
•
Parent/subsidiary/associate companies and other
related parties – Not applicable
•
Shares held by Directors, CEO, CFO, Company
Secretary, Head of ICC and their spouses and minor
children – Please refer to ‘Corporate Governance’
section on page 286
The Directors, to the best of their knowledge and belief,
are satisfied on the related responsibilities of the Board of
Directors, guided by the Companies Act, 1994; The Bank
Company Act, 1991; and guidelines issued by Bangladesh
Bank and Bangladesh Securities and Exchange Commission.
Aziz Al Kaiser
Chairman
On behalf of the Board of Directors
Annual Report 2022
283
REPORT OF THE MANAGING
DIRECTOR & CEO AND THE CHIEF
FINANCIAL OFFICER
Date : April 11, 2023
The Board of Directors
The City Bank Limited
City Bank Centre, 136, Gulshan Avenue, Gulshan-2, Dhaka - 1212, Bangladesh
Subject: Declaration by CEO & CFO on Financial Statements for the year ended on 31 December, 2022
Dear Sir(s),
Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notification No: BSEC / CMRRCD / 2006-158 / 207 /
Admin / 80, Dated 10 June, 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby declare that:
(1) The Financial Statements of The City Bank Limited for the year ended on 31 December, 2022 have been prepared in
compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable
in the Bangladesh and any departure there from has been adequately disclosed;
(2) The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for
the financial statements to reveal a true and fair view;
(3) The form and substance of transactions and the Company’s state of affairs have been reasonably and fairly presented in its
financial statements;
(4) To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance
of accounting records;
(5) Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and
procedures of the Company were consistently followed;
(6) The management’s use of the going concern basis of accounting in preparing the financial statements is appropriate and
there exists no material uncertainty related to events or conditions that may cast significant doubt on the Company’s ability
to continue as a going concern.
In this regard, we also certify that:
(i)
We have reviewed the financial statements for the year ended on 31 December, 2022 and that to the best of our knowledge
and belief:
(a)
These statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
(b) These statements collectively present true and fair view of the Company’s affairs and are in compliance with existing
accounting standards and applicable laws.
(ii)
There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which are
fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its members.
Sincerely yours,
Mashrur Arefin
Managing Director &
Chief Executive Officer
284
Annual Report 2022
Md. Mahbubur Rahman
Additional Managing Director &
Chief Financial Officer
Governance at City Bank
GOVERNANCE AT City bank
Annual Report 2022
285
CORPORATE GOVERNANCE REPORT
At City Bank, corporate governance is the system of principles,
policies, procedures and clearly stated responsibilities and
accountability developed by key stakeholders to circumvent
inherent conflicts of interest in the corporate form. The
purpose of corporate governance is to facilitate effective and
prudent management of the business so as to enable longterm value creation for all stakeholder groups.
Hence, the role of corporate governance is characterized by:
•
Elimination or mitigation of conflicts of interest, particularly
those between the management and shareholders
•
Assurance that the company’s assets are used efficiently
and effectively and in the best interests of shareholders
and stakeholders
From the view point of conflicts of interest, two relationships
are the primary focus of most systems of corporate
governance:
•
Between the management and shareholders
•
Between the directors and shareholders
The Board of Directors represent a critical component of
the systemic checks and balances that underpin the core
of corporate governance. Board members have a shared
responsibility to make decisions that are in the best long-term
interests of shareholders. In order to do so effectively, Board
members require a combination of the following:
•
Independence
•
Experience
•
Resources
Corporate governance practice at City Bank
City Bank is guided in its corporate governance practices
mainly by two regulatory bodies:
•
Bangladesh Bank (Central Bank of Bangladesh)
•
Bangladesh Securities and Exchange Commission (BSEC)
However, the Bank’s corporate governance philosophy
encompasses not only regulatory and legal requirements, but
also various internal rules, policies, procedures and practices
286
Annual Report 2022
anchored on the best practices of local and global banks. City
Bank attaches a simple meaning to corporate governance,
which is due diligence in observing responsibilities by the
Board as well as the management to safeguard interests of
key stakeholders, i.e. depositors, shareholders, employees and
the society as a whole.
Two essential pillars of good corporate governance structures
comprise:
•
Transparency
•
Accountability
These pillars are backed by strong internal controls, compliance
structures and MIS capabilities at the bank.
Board of Directors
City Bank’s Board of Directors currently constitutes 11 (Eleven)
directors, among whom 10 (Ten) are non-executives/ directors,
including the Chairman, and the other director is the Managing
Director (Ex-Officio). Board members include individuals of high
caliber with academic and professional qualifications in the
field of business, and other professionals with long-standing
experience. This strengthens the effective discharge of duties
and responsibilities by the Board. The Board approves the
bank’s budget and business plans and also reviews those on a
monthly basis so that directions can be given as per changing
economic and market environments. The Board also reviews
the policies and manuals of the various segments of business
in order to establish stronger operational capabilities. The
Board and the Executive Committee reviews the policies and
guidelines issued by the Bangladesh Bank regarding credit and
other operations of the banking industry. The management
operates within the policies, manuals and limits, as approved
by the Board. Regular meetings of the Board are held, with a
frequency of at least once a month.
Appointment of directors
The members of the Board of City Bank are appointed
according to the provisions of the Companies Act, 1994, the
Bank Company Act, 1991 (amended up to 2013), Corporate
Governance Guidelines of BSEC, and Guidelines of Bangladesh
Bank and Articles of Association of the bank.
The Board comprises experienced members with diverse
Meeting of the Board of Directors
The Board of Directors holds meetings on a regular basis. At each meeting, the management provides information,
references and detailed working papers for each agenda to all the Directors for review, at least three days prior to the meeting.
The Chairman of the Board of Directors allocates sufficient time for the directors to consider each agenda in a prudent way, and
allows them to freely discuss, inquire and express opinions on the topics of interest at the meeting in order to fulfil their duties and
uphold their responsibilities to the best of their capabilities.
During the year 2022, 26 Board meetings were held and attendance record are as follows:
Name
Mr. Aziz Al Kaiser
Position within the bank
No. of meetings held
No. of meetings attended
Chairman
26
25
Vice-Chairman
26
23
Mr. Hossain Mehmood
Nominated Director
26
24
Mrs. Tabassum Kaiser
Director
26
26
Mr. Rajibul Huq Chowdhury
Director
26
15
Mrs. Syeda Shaireen Aziz
Director
26
26
*Mr. Rafiqul Islam Khan
Director
26
11
Nominated Director
26
22
Ms. Rebecca Brosnan
Nominated Director
26
26
**Mr. Farooq Sobhan
Independent Director
26
10
Dr. Salim Mahmud
Independent Director
26
26
***Mr. Matiul Islam Nowshad
Independent Director
26
4
Mr. Hossain Khaled
Mrs. Savera H. Mahmood
*Mr. Rafiqul Islam Khan was re-elected on 12th June 2022 at the 39th AGM. subsequently, his re-appointment was declined by
Bangladesh Bank due to CIB issue.
**Mr. Farooq Sobhan’s 2nd Term expired on 20th May, 2022
***Mr. Matiul Islam Nowshad was included in the Board on 7th November 2022
The Directors who could not attend the meeting were granted leave of absence by the Board.
Ownership Composition
As on 31 December, 2022, Directors of City Bank held 30.71% of the total shares, as compared to 33.01% at year-end 2021.
Percentage of Shareholdings as on 31 December, 2022
Composition
General public
Directors and sponsors
Institutions
Foreign shareholder
Total
2022
No. of shares held
452,675,820
368,750,592
315,653,778
63,526,553
1,200,606,743
2021
% of total shares
37.70%
30.71%
26.29%
5.29%
100.00%
No. of shares held
% of total shares
431,565,417
352,282,534
244,868,310
38,489,733
1,067,205,994
40.44%
33.01%
22.94%
3.61%
100.00%
Annual Report 2022
287
Governance at City Bank
diverse, proficient and balanced in guiding the bank to achieve
its desired objectives.
professional expertise and knowledge in the realms of
business, banking and finance, IT, accounting, marketing,
administration and engineering, which makes the Board
Directors’ shareholding status
As per BSEC Notification dated 22 November, 2011 and 7 December, 2011 each Director other than independent and depositor’s
director(s) of any listed company shall hold minimum 2% (Two percent) shares of the paid up capital by 21 May, 2012. Otherwise
there shall be a casual vacancy of director(s).
All the Directors of a company, listed with any stock exchange shall jointly hold minimum 30% (thirty percent) shares of the paid
up capital of the company. All the eligible Directors of the bank have taken required number of shares to comply with the above
notification.
Shareholding structures of the Directors of City Bank are as follows as of 31 December, 2022
Name
Position within the bank
Percentage of holdings
Mr. Aziz Al Kaiser
Chairman
2.77%
Mr. Hossain Khaled
Vice-Chairman
2.20%
Mr. Hossain Mehmood
Nominated Director
2.00%
Mrs. Tabassum Kaiser
Director
2.10%
Mr. Rajibul Huq Chowdhury
Director
2.01%
Mrs. Syeda Shaireen Aziz
Director
2.00%
Mrs. Savera H. Mahmood
Nominated Director
2.00%
Ms. Rebecca Brosnan
Nominated Director
4.95%
Dr. Salim Mahmud
Independent Director
Nil
Mr. Matiul Islam Nowshad
Independent Director
Nil
Mr. Mashrur Arefin
Managing Director & CEO
Nil
Shareholdings by CEO, CFO, Company Secretary, Head of ICC and their Spouses
Name
Designation
No. of
shares
Name of spouse
No. of
shares
Mr. Mashrur Arefin
Managing Director & CEO
Nil
Mrs. Farhana Mashrur
Nil
Mr. Md. Mahbubur Rahman
AMD & Chief Financial Officer
Nil
Mrs. Sanjeda Afrin Ashraf
Nil
Mr. Md. Kafi Khan
Company Secretary
Nil
Mrs. Nargis Sultana
Nil
Mr. A.K.M Saif Ullah Kowchar
Head of ICC
Nil
Mrs. Farzana Mannan
Nil
Shareholdings by Top-5 Salaried Executives
Name
Designation
No. of
Shares
Mr. Sheikh Mohammad Maroof
Additional Managing Director & Chief Business Officer
Nil
Mr. Mohammad Mahbubur Rahman
Additional Managing Director & Chief Financial Officer
Nil
Mrs. Mahia Juned
Additional Managing Director, Chief Operating Officer & CAMLCO
Nil
Mr. Kazi Azizur Rahman
Deputy Managing Director & Chief Information Officer
Nil
Mr. Md. Zafrul Hasan
SEVP, Head of Digital Financial Services
Nil
There is no shareholder holding 10% or more voting interest in City Bank. Hence, the corresponding BSEC rule does not apply.
288
Annual Report 2022
The Managing Director is the only Executive Director on the
Board of Directors of the bank. All other Directors including the
Chairman are the Non-Executive Directors.
Independent Directors
In compliance with the Corporate Governance Guidelines of
Bangladesh Securities and Exchange Commission (BSEC) and
as per Section-15 of Bank company (Amendment) Act-2018
regarding appointment of new directors and the guidelines
given by Bangladesh Bank in BRPD Circular No. 11 dated 27
October, 2013, the Bank appointed 2 Independent Directors
observing all required formalities.
Independent Directors’ independence
and other regulatory authorities. The management’s primary
responsibilities are as follows:
•
Manage the operation of the bank safeguarding interests
of customers and other stakeholders in Compliance with
the highest standards of ethics and integrity
•
Implement the policies and strategic direction, established
by the Board
•
Establish and maintain a strong system of internal control
•
Ensure the Bank’s compliance with applicable legal and
regulatory requirements
Responsibilities of the Chairman of the Board
The overall responsibilities of the Chairman are to:
As per existing rules and regulations, Independent Directors
are required not to have any significant relationship, whether
pecuniary or otherwise, with the Bank, its top management
and the Board. The Bank complies with the requirement and
appoints Independent Directors who do not hold any shares
in the Bank and do not hold any shares in the Bank and do not
have any family or other relationship and its Board of Directors
and its executive management.
•
Act as the Bank’s led representative, explaining aims and
policies to the shareholders
•
Ensure no participation in or interfere in the administrative
or operational and routine affairs of the Bank
•
Ensure that the Board sets and implement the Bank’s
direction and strategy effectively
Separation of Chairman and Chief Executive Officer
roles
The specific responsibilities of the Chairman, among others,
are to:
In compliance with Bangladesh Bank BRPD Circular No. 06, 04
February, 2010 and Clause 1.4 of BSEC Corporate Governance
Guidelines dated 7 August, 2012, it has been reported that the
Chairman of the Board, Mr. Aziz Al Kaiser had been elected
from among the directors. There are clear and defined roles
and responsibilities of the Chairman and the Chief Executive
Officer.
•
Provide all over leadership to the Board, supplying vision,
mission and imagination, working closely with the CEO
•
Take leading role in determination of composition and
structure of the Board, which will involve in regular
assessment of the
The Chairman of the Board approves the agenda for the Board
Meetings, assisted by the Managing Director & CEO and the
Company Secretary. Regular agenda items include approving
credit beyond CEO’s authority and aspects of the bank’s
corporate strategy, financial performance, core risks and
credit policies, corporate governance, CSR and organizational
structure, human resources policy, customer and service
strategies and procurement policies, etc.
On the other hand, CEO, being the head of management team,
is accountable to the Board and its committee to run and
manage the bank in accordance with the prescribed policies,
principles and strategies, established by the Board as well
as rules, regulations and guidelines from Central Bank, BSEC
-
Size of the Board
-
Interaction, harmony and involvement of the Directors
•
Set the Board’s agenda and plan Board Meeting
•
Chair all Board Meetings, directing debate towards
consensus
•
Ensure that the Board receives appropriate, accurate,
timely and clear information
•
Chair the AGM and other shareholders’ meetings to foster
effective dialogue with shareholders
•
Ensure that the views of the shareholders are
communicated to the Board as a whole
Annual Report 2022
289
Governance at City Bank
Non-executive Directors
•
Work with Chairman of Board Committees
•
Conduct on-site inspection of any bank-branch or
financing activities under the purview of the oversight
responsibilities of the Board
•
Annual appraisal of Board’s performance
The shareholders elect Directors in the Annual General Meeting
(AGM). Directors are accountable to the shareholders. At the
AGM, the shareholders freely speak about the performance
of the bank and make a critical analysis of the Board of
Directors. The Chairman replies to their queries made during
meeting. Their constructive suggestions are noted down and
implemented for qualitative improvement of the bank. As
per our existing policy, it is disclosed that no formal annual
appraisal of the Board takes place in the Bank.
Roles and responsibilities of the Managing Director
& CEO
The main responsibilities and authorities of the Managing
Director & CEO are enumerated below:
•
In terms of the financial, business and administrative
authorities vested upon him by the Board, the CEO
shall discharge his own responsibilities. He shall remain
accountable for achievement of financial and other
business targets by means of business plans, efficient
implementation thereof and prudent administrative as
well as financial management
•
The CEO shall ensure compliance of the Bank Companies
(Revised) Act, 2018 and/or other relevant laws and
regulations in the discharge of his functions in the bank
•
The CEO shall include information on violation of any law,
rules, regulation including Bank Company (Revised) Act,
2018 while presenting memorandums before the Board
or the Committees formed by the Board
•
•
The CEO will provide all sorts of information to Bangladesh
Bank about the violation of Bank Company (Revised) Act,
2018 and/ or any violation of Laws, Rules and Regulations
The recruitment and promotion of all staff of the Bank except
those in the two tiers below him shall rest on the CEO. He
shall act in such cases in accordance with the approved
service rules on the basis of the human resources policy and
sanctioned strength of employees as approved by the Board.
The Board or the Chairman of any Committee of the Board or
any Director does not get involved or intervene in such affairs
290
Annual Report 2022
The authority relating to transfer of and disciplinary
measures against the staff, except those at two tiers
below the CEO, shall rest on him, which he shall apply in
accordance with the approved service rules. Besides, under
the purview of the human resources policy as approved by
the Board, he shall nominate officers for training. Besides,
the CEO shall assume any other responsibility if the Board
assigns within the purview of the Rules, Regulations, Acts
and Articles of the Bank
Annual evaluation of the Managing Director & CEO
by the Board
In line with Bank’s mission and vision, Board of Directors
define the roles and responsibilities of the Managing Director
& CEO. Managing Director & CEO is evaluated by the Board
on the basis of goals set for him at the beginning of each
year. The annual financial budget and other job objectives are
discussed, reviewed and finalised by the Board at the start of
the financial year. The Board considers both financial and nonfinancial goals during the appraisal.
Evaluation based on financial performance
Evaluation based on financial performance emphasis on
annual budget, i.e. revenue earning for the Bank, gradual
reduction the NPL ratio, etc. At the end of each quarter, the
Managing Director & CEO is evaluated based on the financial
targets. The evaluation is done based on both:
•
Achievement of targets against budget
•
Achievement of targets against the achievement of those
targets in the previous yea
Financial Goals and Performance (Bank)
Particulars
BDT mn
2022
Goals
2021
Achievement
Goals
Achievement
Loans and
advances
350,342
354,774
327,074
286,380
Deposits
329,984
331,890
303,361
282,064
13.5%
14.5%
14.7%
14.2%
4.2%
3.9%
5.1%
4.9%
Profit after tax
4,502
4,508
4,004
4,743
Cost to income
ratio
56.0%
51.9%
61.3%
48.6%
ROA
1.0%
1.0%
1.0%
1.2%
ROE
13.7%
14.1%
13.8%
15.8%
CRAR
% of NPL
•
The Managing Director & CEO is also evaluated based on nonfinancial goals in an ongoing basis. The non-financial criteria
include, but are not confined to things such as:
Benefits provided to Directors and Managing
Director
•
The confidence of the shareholders in the CEO, as reflected
in the stock price of the company
•
The relationship of the company with the regulators
•
The confidence of customers in CEO, as reflected through
continuous development of value proposition
In addition, at the end of each year, an annual assessment and
evaluation of the achievements of pre-agreed targets is done.
Board considers the improvement in the scores for CAMELS
rating at the time of evaluation. During this evaluation, the
deviations from target, and the reasons for the deviations
are discussed and assessed. Moreover, Managing Director &
CEO’s quality leadership to post better performance is always
expected.
Corporate governance regulations for banks in Bangladesh
•
Directors are entitled to fees for attending the Board /
Executive Committee meetings (Notes to the Financial
Statement No. 37.a)
•
Managing Director is paid salaries and allowances as per
approval of the Board and Bangladesh Bank (Notes to the
Financial Statement No. 36)
City Bank has fully complied with Bangladesh Bank Circular
and Guidelines.
Appointment of external auditors
The Board of Directors of the bank in its 39th Annual General
Meeting held on 12 June, 2022 appointed Howladar Yunus &
Co., Chartered Accountants as the statutory auditor for the
year 2022.
Services not provided by external auditors
Policy training of Directors
Most of the Directors of the Bank are on the Board for
many years. They have acquired enough knowledge and
acumen to lead the bank well to the path of progress. The
latest legislations on the financial sector and directives of
the regulatory bodies are made available to them for their
instant information in order that they can discharge their
responsibilities effectively. They also attend various seminars
and symposiums mainly on corporate governance organized
by different professional bodies.
As per BSEC guidelines, City bank had Howladar Yunus & Co.,
Chartered Accountants, (involved in statutory audit) was not
included in any of the followings during the year 2022:
•
Appraisal or valuation services or fairness opinions
•
Designing and implementing financial information system
•
Book-keeping or other related services
•
Broker-Dealer services
•
Actuarial services
•
Internal Audit services
Corporate Governance has at its backbone a set of transparent
relationships among the institution’s Management, Board,
Shareholders and other stakeholders. With this in view,
City Bank continuously organizes training on “Orientation
on Banking Business under Good Governance" where all
employees have to participate.
•
Any other services that the Audit committee determines
The main topics of the training are:
The first phase quick-summary inspection on City Bank’s
2021 financials by Bangladesh Bank (BB) was closed via the
tri-patriate meeting held among the central bank, external
auditors and the bank, with the 2021 financials approved by
March 2022. The central bank commenced the second phase
of their comprehensive inspection on the head office from
late July 2022 and completed the same in January 2023.
This apart, Bangladesh Bank also conducted comprehensive
Corporate Governance training and its objectives
•
Overall banking business in line with good governance
•
Corporate
practices
•
Banking Companies Act and stipulations on corporate
governance
Governance
in
Banks-international
best
No partner or employee of Howladar Yunus & Co., Chartered
Accountants possess any share of the bank during the tenure
of their audit assignment at City bank.
Central bank inspections
Annual Report 2022
291
Governance at City Bank
Evaluation based on non- financial goals
inspection on a number of branches as well as all core risk
areas and issued its reports. Furthermore, there were several
special inspections on different areas of the bank, like proper
use of Covid-19 stimulus package, disbursement of cash
incentive to appropriate recipients, AML/CFT compliance,
etc. The bank extended full support and provided satisfactory
and appropriate explanations and evidence to meet the
requirements of all inspections, leading to satisfactory closure
of inspection tasks.
Issue closure of previous DBI inspections
During 2022, Bangladesh Bank sent 104 letters for compliance
and further follow-ups of previous compliance on branches.
A sum total of 1,113 issues were raised by BB, out of which
1,086 issues have been closed. Issue closure percentage
stands at 98%, a sound achievement testifying our compliance
standards and documentation practices. The remaining 27
issues are mostly routine updates related to loan recovery,
legal status, etc. Apart from the above, 137 issues were
identified in the Bangladesh Bank comprehensive inspection
report on the head office. Our compliance response will be sent
to Bangladesh Bank as well as will be placed to the Board of
Directors in a special meeting of the Board in the presence of
representatives of Bangladesh Bank and related management
personnel of the bank within timeline of the regulation.
Board’s committees and their responsibilities
The Board has following 3 (three) committees
Board Risk Management
Committee
Audit Committee
Executive Committee
Board’s Risk Management Committee (BRMC)
Board’s Risk Management Committee (BRMC) at City Bank was established by the Board of Directors in its 452nd meeting held on
25 January, 2014 for governance of risk-overseeing, directing, and setting policies and monitoring risk management performance.
Bangladesh Bank vide their BRPD Circular No 11, dated 27 October, 2013 had also advised banks to form the Committee of the
Board named “Risk Management Committee” in addition to existing “Audit Committee” and “Executive Committee” of the Board.
The Committee was reconstituted in 2018 and 2021 by Board of Directors of the bank.
Committee composition and meetings
The BRMC consisted following members of the Board:
Status with the bank
Status in the
Committee
No. of meetings
held
No. of meetings
attended
Vice Chairman
Convener
10
10
Mrs. Tabassum Kaiser
Director
Member
10
10
Mr. Hossain Mehmood
Nominated Director
Member
10
09
Director
Member
10
08
Nominated Director
Member
10
10
Name
Mr. Hossain Khaled
Mr. Rajibul Huq Choudhury
Ms. Rebecca Brosnan
Company Secretary: Mr. Md. Kafi Khan
Roles and responsibilities of the committee
Committee was entrusted to supervise and review risk
management processes covering the following:
292
Annual Report 2022
•
Risk identification and development of control strategy
•
Adoption of organisational structure embedding risk
across the organisation
Review and adoption of Risk Management Policy
•
Preservation and maintenance of information and
•
reporting
•
Supervision of execution of overall risk management policy
•
Miscellaneous
(Quarterly
reporting
of
decision
&
recommendation to board, ensuring compliance of
regulatory instructions, considering evaluation report by
internal/external auditors)
Any other task as assigned by the Board of Directors and
Central Bank
Audit Committee
As per BRPD circular # 12 (23 December, 2002), all banks are
advised to constitute an audit committee comprising members
of the Board. The audit committee will assist the Board in
fulfilling its oversight responsibilities including implementation
of the objectives, strategies and overall business plans set by
the Board for effective functioning of the bank.
Committee composition and meetings
Pursuant to the specified BRPD Circular No. 12, the Audit Committee of the Board of Directors consisted of the following members
from the Board:
Name
Status with the bank
Status in the
Committee
No. of meetings
held
No. of meetings
attended
Dr. Salim Mahmud
Independent Director
Convenor
7
7
Independent Director
Member
7
-
Mrs. Syeda Shaireen Aziz
Director
Member
7
7
Mrs. Tabassum Kaiser
Director
Member
7
7
Independent Director
Convener
7
3
Director
Member
7
1
*Mr. Matiul Islam Nowshad
**Mr. Farooq Sobhan
***Mr. Rafiqul Islam Khan
Company Secretary: Mr. Md. Kafi Khan
*Mr. Matiul Islam Nowshad, was included in the Board’s Audit Committee by complying laws and regulations .
** Mr. Farooq Sobhan’s 2nd Term expired on 20th May, 2022
***Mr. Rafiqul Islam Khan was re-elected on 12th June 2022 at the 39th AGM. subsequently, his re-appointment was declined by
Bangladesh Bank due to CIB issue.
Roles and responsibilities of the committee
•
Guide implementation of Corporate Governance in the
organisation
•
•
Bank with 6 (six) members from the Board of Directors
in compliance with Bangladesh Bank guidelines. The
responsibility of EC is to review and provide final approvals
Recommend to the Board, the appointment and removal
on the credit proposals those are beyond the delegated
of the Head of Internal Control and Compliance
authority of the Managing Director.
To review whether internal control strategies, processes
recommended by internal and external auditors have been
•
21, 2007, reconstituted Executive Committee (EC) in City
Committee composition and meetings
implemented by the management
The Executive Committee of the Board of Directors consisted
To establish regulatory guidelines and instructions within
of the following members from the Board:
the organisation
•
To ensure adherence to legal and regulatory requirements
Executive Committee (EC)
The Board of Directors in its 325th meeting held on January
Particulars
Mr. Aziz Al Kaiser
Mr. Hossain Khaled
Directorship status
with the bank
Status in the
Committee
Chairman
Convener
Vice-Chairman
Member
Annual Report 2022
293
Governance at City Bank
•
Particulars
Mr. Hossain
Mehmood
Directorship status
with the bank
Status in the
Committee
Nominated Director
Member
Director
Member
Mr. Rajibul Huq
Chowdhury
Company Secretary: Mr. Md. Kafi Khan
* The Board’s Executive Committee has been reconstituted on 22
February, 2021 and Board of Directors has selected Mr. Aziz Al
Extended management committee (EMC)
Extended Management Committee is a prime decision making
body of the bank for day to day operations and for seamless
execution of strategic decisions with leaders of different
divisions/departments. EMC is key to drive and uphold the key
values across the organisation and is also responsible jointly
for delivering business results. Headed by a Mancom member,
EMC regularly conducts to ensure all internal and external
challenges within the organisation are dealt with proactively.
Kaiser, Chairman as Convener of the Board’s Executive Committee.
Assets liability committee (ALCO)
Roles and responsibilities of the committee
The duties of managing the market risk including liquidity,
interest rate and foreign exchange risk lies with the Treasury
Division under the supervision of ALCO. ALCO is comprised of
senior executives of the Bank, who meets at least once in a
month. The committee evaluates the current position of the
Bank and gives directions to mitigate the market risk exposure
to a minimum level. ALCO was fully engaged with activities in
setting strategies and re-vamping previous strategies to cope
with the current market scenario.
Executive Committee is entrusted the following broader
responsibilities and functions:
•
Establish and periodically review the bank’s overall credit
and lending policies and procedures
•
Develop and implement uniform and minimum acceptable
credit standards for the bank
•
Approve all revision, restructure and amendments made to
the credit proposals (initially approved by the committee)
Management committees and their responsibilities
In an effective corporate governance structure, the bank
management has a collective mandate under the leadership
of MD & CEO to carry out daily operations to the best interest
of the stakeholders. The management team is headed by the
Managing Director, Mr. Mashrur Arefin. Several Management
Committees have been formed to handle the banking
operations and identify and manage risks of the bank. The
committees are MANCOM, Extended MANCOM, ALCO, RMU,
Investment Committee and Purchase Committee. Managing
Director leads the three most important committees, which
are MANCOM, ALCO and Investment Committee
Management committee (MANCOM)
MANCOM is considered the highest decision and policy making
authority of the bank which consists of the CEO and the heads
of various large divisions. Regular tasks of the committee
include:
Basel Unit
In order to incorporate the changing global concepts in risk
management and to adopt the Basel III standards, City
Bank formed a management level committee named ‘Basel
Unit’, chaired by MD & CEO. The committee is vested with
supervisory responsibilities to implement Basel III across
the bank. Therefore, Committee is assigned to adopt a
comprehensive approach to devise the plan and craft the
strategies for implementation of Basel III in the banking
business of City Bank in accordance the road map provided by
Bangladesh Bank.
Supervisory review process (SRP) team
As per “Revised Process Document for SRP SREP Dialogue
on ICAAP (Implementation of 2nd Pillar of Basel Accord)”
issued by Bangladesh Bank in May 2014, Bank must have
an exclusive body naming SRP team which shall act as the
Managerial Layer of Supervisory Review Process. SRP Team
of City Bank is headed by MD & CEO. The team is empowered
to validate the ICAAP report of the bank and to represent the
bank in the process of dialogue with SREP Team of BB and to
determine adequate capital requirement of the bank.
•
Monthly business and financial performance analysis
Executive Risk Management committee
•
Monthly business review and analysis of each business
Executive Risk Management Committee of the bank comprises
of senior management with Chief Risk Officer in the chair to
units’ performance
294
Annual Report 2022
Credit Risk Management committee
The objective of forming this Committee is to identify the
possible risks assumed by the Bank for different types of
credit transactions and review Bank’s strategy on lending,
rescheduling, monitoring, recovering and keeping the asset
quality at expected level on regular basis. This committee is
headed by Chief Risk Officer.
Committee for morale, ethics and integrity
In line with the implementation of National Integrity Strategy
(NIS) of Bangladesh, the Bank operates “Committee on Morale,
Ethics and Integrity” to implement National Integrity Strategy
within the bank. The Committee shall identify ways to protect
the culture of loan default and promote consciousness with
a view to reduce frauds, forgeries, irregularities and other
sources of corruption across the bank.
Investment committee (IC)
The five members’ Investment Committee looks after
investment in the capital market and meets whenever
required. They oversee and monitor to ensure that the
investment decisions are carried out as per approved
strategies and investment policies. This committee regularly
monitors the bank’s holdings of shares and capital market
exposures and ensures keeping investment within prescribed
limits (currently 25% of prescribed Capital) as set by the
Central Bank.
Sustainable Finance Committee
Sustainable Finance Committee (SFC) oversee and supervise
all activities related to the environment, green finance and
sustainability through the Sustainable Finance Unit (SFU).
The committee is headed by AMD & CBO. Operational Head
of Sustainable Finance acts as Member Secretary and Senior
Manager of Sustainable Finance acts as Focal Member of the
SFC.
Purchase committee
The five members’ Purchase Committee plays an instrumental
role in the procurement procedure of the bank.
Internal Systems and Controls
Safeguarding trust, preserving transparency, fostering
responsibility
An effective internal control system routinely identifies and
analyses all material risks that could jeopardise the Bank’s aims
and objectives. Internal and external factors are identified in
detail and considered during risk assessment. External factors
include macroeconomic conditions, pandemic evolution,
foreign currency volatility, amendments in industry regulations,
socio-political developments, geopolitical challenges such as
the war in Europe, technological advancements, and changes
in country rules and regulations.
City Bank’s Internal Control & Compliance Division (ICCD)
recognises and assesses all material risks that could obstruct
the attainment of the Bank’s goals. Risk assessment by internal
control emphasises on compliance with regulatory standards
and also social, ethical, environmental and governance
risks that may affect the banking system. It ensures reliable
financial and managerial information that promotes improved
strategic decision-making. ICCD also ensures compliance with
laws, regulations and guidelines issued by regulators as well
as policies and procedures issued by the Bank itself. Stronger
internal controls enable the Bank to engage safely in more
profitable activities that would otherwise be considered riskprone for a bank without these controls. Thus, ICCD enhances
public confidence in the Bank, assuring operational integrity
and reputation, while also facilitating risk-based examination.
City Bank’s ICCD operates independently as a division and
consists of four units (Audit & Inspection, Information Systems
Audit, Shari’ah Audit, and Compliance & Monitoring), with
responsibility to determine risks and evaluate the overall
business, operations, credit portfolio, foreign exchange,
treasury function, etc., of the Bank on an ongoing basis. The
key objective of ICCD is to assist and provide guidance across
all aspects of the Bank deploying adequate resources for
identification of control deficiencies and embracing appropriate
measures to overcome those to ensure full compliance.
The Bank’s audit function, as a part of ICCD, operates
independently and is responsible to the Audit Committee, a
committee of the Board by way of maintaining a direct line
of reporting with the said body. Similarly, the Shari’ah Audit
function reports directly to the Bank’s Shari’ah Supervisory
Committee (SSC). This framework is a crucial component of
Annual Report 2022
295
Governance at City Bank
ensure proper and timely identification, management and
mitigation of risks exposed by the bank in a comprehensive
way.
the Bank’s three lines of defense risk model. Thus, ICCD fulfils
the role of a bridge between the Board, SSC and the Bank’s
management. An effective organisational structure has
also been established by fostering a reliable internal control
culture within the Bank. Our status in establishing robust
internal controls across the Bank, aligned with regulatory
requirements, is summarised below:
•
The Board of Directors has implemented a modern,
scientific and acceptable internal control and compliance
process within the Bank.
•
The Audit Committee of the Board has evolved an effective
procedure for financial reporting disclosures, developing
a suitable internal control system and ensuring liaison
with both internal and external auditors to minimise the
occurrence of business and operational risks.
•
The Shari’ah Supervisory Committee ensures that
the Bank’s Islamic Banking business operates in full
compliance with Shari’ah laws, guidelines and principles,
in addition to general banking norms.
•
The Bank’s Senior Management Team (SMT) and
Management Committee (MANCOM), with support from
the Extended Management Committee (EMC), actively
superintend the overall management of the Bank and
determine the extent of internal control system that is
deemed fit and appropriate for the Bank.
•
Organizational and procedural controls, supported by an
effective Management Information System (MIS), assist in
the prudent management of the Bank’s exposure to risk.
•
External auditors evaluate the internal control system
while conducting their statutory audit.
•
ICCD has been structured as per the mandated
organisational structure of Bangladesh Bank’s core risk
management guideline on ICC.
•
Control policies and procedures have been established
and control tests are done by ICCD to ensure that control
measures are appropriate.
296
Annual Report 2022
•
Updated internal control policies and manuals are issued
on an ongoing basis.
•
An independent audit mechanism monitors the
effectiveness of organisational and procedural controls.
Further, a robust Risk-Based Internal Audit (RBIA) function has
been implemented. Risk assessment by the internal control
function focuses on compliance with the Bank’s policies,
together with regulatory requirements and social, ethical
and environmental risks, so as to ensure maximisation of
opportunity through minimisation of risk and to sustain the
forward growth outlook of the Bank.
Branch risk and control matrix has been developed and is
being updated on an ongoing basis. Accordingly, branches
are now being audited on off-site basis in the standardised
approach via a robust IT platform with the support of all
stakeholders, including branches, operations and the Audit
Committee of the Board. Risk and control matrix for a number
of Head Office functions have been developed and are being
used for audit purposes. Risk and control matrix of the rest of
the divisions will be implemented in the current year (2023).
Upon completion of audit of the branches/divisions/units
or subsidiaries, the audit teams articulates and escalates
high-risk issues to the leadership team along with relevant
MANCOM/CEO level through discussion with an action plan
for proper closure of the issues in a sustainable manner with
the aim of strengthening their risk and control environment.
These teams also partner with the branches/divisions/units
and subsidiaries through a comprehensive review of their
policies, processes and SOPs in order to identify any possible
control gaps for process improvement.
Importantly, all regulatory requirements (including all
instructions, circulars and guidelines issued by Bangladesh
Bank) have been duly implemented, and compliance is
routinely monitored by ICCD and RMD to test and determine
effectiveness. This apart, every year, ICCD prepares a detailed
annual integrated report on the health of the Bank and submits
it to the Board to assess strengths/development areas of the
Bank on the basis of certain key metrics. This helps foster a
culture of governance and compliance across the Bank.
Governance at City Bank
REPORT OF THE EXECUTIVE
COMMITTEE
City Bank is committed to the highest standards of governance at all levels of the business and
across all functions of the organisation. As an essential part of this commitment, the Bank, through
the Board’s Executive Committee, has established a comprehensive governance and operating
framework that encapsulates the internal principles and external regulatory requirements
applicable to the Bank’s operations as a licensed commercial bank. The Executive Committee
operates under all conventional regulatory and Islamic banking principles and voluntary codes
and best practices, which together provide the foundation for the policies regarding large credit
proposals, interest rate setting, etc., leading to secure and sustainable future growth.
Aziz Al Kaiser
Convenor, Executive Committee
Introduction
Roles and responsibilities of the EC
City Bank’s Board of Directors, at its 582nd meeting held on
•
Establish and periodically review the Bank’s overall
credit culture and practices, including credit policies and
procedures
•
Develop and implement uniform and minimum acceptable
credit standards
•
Approve all revisions, restructuring and amendments made
to credit proposals initially approved by the committee
February 22, 2021, reconstituted the Executive Committee
(EC) with 4 (four) members from the Board of Directors, in
compliance with Bangladesh Bank guidelines. The responsibility
entrusted to the EC comprises the review and final approval on
credit proposals that are beyond the delegated authority of the
Managing Director. Further, EC decisions, described through the
full meeting minutes, are referred to in subsequent meetings of
the Board for ratification.
Committee structure
The Executive Committee consisted of the following members of
the Board:
Name
Mr. Aziz Al Kaiser
Status within
the Bank
Status in the
Executive
Committee
Chairman
Convener
Mr. Hossain Khaled
Vice-Chairman
Member
Mr. Hossain
Mehmood
Nominated
Director
Member
Mr. Rajibul Huq
Chowdhury
Director
Member
Company Secretary: Mr. Md. Kafi Khan
Major areas of focus
•
Review and approve credit proposals beyond the purview
of the MD
•
Ratify different management approvals on interest rate
amendments, changes in collateral security and document
deferral
•
Review and approve different credit proposal for renewal
and enhancement of existing credit limits
Acknowledgements
City Bank’s Executive Committee wishes to express its heartfelt
appreciation to the members of the Board of Directors and the
management team for their assistance in allowing the committee
to carry out its duties and obligations in 2022. The Committee
expects the support and cooperation from all quarters of the
Bank in 2023 and beyond.
On behalf of the Executive Committee,
Aziz Al Kaiser
Convenor, Executive Committee
Annual Report 2022
297
REPORT OF THE AUDIT COMMITTEE
“The Audit Committee of City Bank is committed to its role of ensuring the implementation of
high-quality governance practices and providing oversight on the Group’s financial reporting, risk
management and internal control systems. Towards this end, the Bank implemented various
measures to navigate through the challenges, such as those from the COVID-19 pandemic and
geopolitical fallouts of the war in Ukraine, etc., to ensure banking as an essential service remains
available while also supporting the stability of the domestic financial system. Thus, at a time
when there are heightened concerns around bank run-ins as witnessed in some parts of the
world, City Bank, through the fundamental responsibilities of the Audit Committee, remains a
well-armored Bank with safeguarded operations.”
Dr. Salim Mahmud
Convenor, Audit Committee
Introduction
social (ESG) components of our organization. As a result, we
At City Bank, achieving long-term growth is one of the main
pillars of the organisation, particularly in an environment of deep
challenges, led by the war in Europe that sparked a fuel and dollar
crises in Bangladesh, similar to elsewhere in the world.
efficiency and effectiveness in generating value sustainable
In order to accomplish our long-term aims and ambitions,
we must apply our sustainability framework with robust
financial controls, as well as economic, environmental and
believe that strong financial management is to the Bank’s
across sectoral cycles and industry trends. As a result, we go
beyond management structures, policies and procedures to
incorporate audits and assessments into our organizational
culture to assure that the Bank continues to adhere to the
anticipated standards of compliance and governance, fostering
long-term success for everyone, everywhere.
Leading change through best practices on risk and governance
According to BRPD Circular No. 11 dated October 27, 2013, the Board adopts the Bank’s objectives, strategies and general
business plans, and the Audit Committee supports the Board in carrying out its supervisory and surveillance obligations.
City Bank’s Board of Directors established the Audit Committee of the Board to provide independent oversight of the Bank’s
financial reporting, non-financial corporate disclosures, internal control systems, and compliance with governing rules and
regulations, in accordance with Bangladesh Bank guidelines and Bangladesh Securities and Exchange Commission (BSEC)
notifications on Corporate Governance.
The Committee is also tasked with reviewing the following:
Financial reporting
processes
298
Annual Report 2022
System of internal
control and
superintendence of
financial risks
Audit processes
Processes for
monitoring observance
of laws, guidelines and
regulations
Affiliation with the
code of business
conduct
Name
Dr. Salim Mahmud
*Mr. Matiul Islam Nowshad
Mrs. Syeda Shaireen Aziz
Mrs. Tabassum Kaiser
**Mr. Farooq Sobhan
***Mr. Rafiqul Islam Khan
Status with the bank
Status in the
committee
Educational
qualification
Meeting
attendance
Independent Director
Independent Director
Director
Director
Independent Director
Director
Convenor
Member
Member
Member
Convener
Member
PhD
MBA
BBA
MBA
B.A. (Hons), M.A.
HSC
07/07
--/-07/07
07/07
03/07
01/07
Company Secretary: Mr. Md. Kafi Khan
*Mr. Matiul Islam Nowshad, was included in the Board’s Audit Committee by the Board at its 625th meeting held on 8 December, 2022.
** Mr. Farooq Sobhan’s 2nd term expired on 20th May, 2022
***Mr. Rafiqul Islam Khan was re-elected on 12th June 2022 at the 39th AGM. subsequently, his re-appointment was declined by
Bangladesh bank due to CIB issue.
Roles and responsibilities of the committee
•
report before disclosing it in the Annual Report.
The Audit Committee is primarily responsible for the following:
Internal control
•
•
•
•
To evaluate whether the management sets the appropriate
compliance culture and standards by communicating the
importance of internal control and the administration of
risk, while also ensuring that all employees have clear
understanding of their roles and responsibilities.
To review the management’s actions in technology
advancement, especially in the realm of digital banking,
and the bank’s Management Information System (MIS).
To consider whether internal control strategies,
recommended by internal and external auditors, have
been implemented by the management.
To consider reports relating to fraud, forgery and
deficiencies in internal control, or other similar issues
detected by internal and external auditors and inspectors
of the regulatory authority, and place it before the Board
after reviewing whether necessary corrective action has
been taken by the management.
Financial reporting
•
To review, along with the management, whether the
interim and annual financial statements reflect complete
and true information, as well as to determine whether the
statements are prepared in accordance with the existing
rules, regulations and standards enforced in the country,
and as per the relevant accounting principles stipulated by
Bangladesh Bank.
To review the Management’s Discussion and Analysis
•
To review the financial statements with the management
and external auditors before its finalization.
•
To review the statement of all related party transactions
submitted by the management.
Internal audit
•
To monitor whether the internal audit works independently
from the management.
•
To review the activities of the internal audit and the
organizational structure, and ensure that no unjustified
restrictions or limitations hinder the internal audit process.
•
To examine the efficiency and effectiveness of the internal
audit function.
•
To examine whether the findings and recommendations
made by the internal auditors are duly considered by the
management.
External audit
•
To review the performance of the external auditors and
their audit reports.
•
To examine whether the findings and recommendations
made by the external auditors are duly considered by the
management.
•
To make recommendations to the Board regarding the
appointment of external auditors.
Annual Report 2022
299
Governance at City Bank
Committee structure
Compliance with existing laws and regulations
•
To review whether laws and regulations framed by the
regulatory authorities (central bank and other bodies)
and internal regulations approved by the Board are being
complied with.
Other responsibilities
•
To submit a compliance report to the Board on a quarterly
basis on corrective action taken on omission, fraud
and forgery cases and other irregularities detected by
internal and external auditors and inspectors of regulatory
authorities.
•
To solicit assessment reports from external and internal
auditors.
•
To perform other oversight functions as desired by the
Board and evaluate the committee’s own performance on
a regular basis.
•
Reviewed the interim unaudited quarterly financial
statements of the Bank and its subsidiaries for the first,
second and third quarters of 2022.
•
Recommended the re-appointment of statutory auditor
for the year 2022 and fixed their remuneration.
•
Recommended the appointment of auditor for certification
on compliance with the corporate governance code and
fixed their remuneration.
•
Reviewed the quarterly financial statements of City Bank’s
subsidiaries, in particular their investments, as per BSEC
notification dated 3 June, 2018 on Corporate Governance Code.
•
Reviewed the observations and suggestions of
Bangladesh Bank in their inspection reports on the head
office and different branches of the Bank, along with their
compliance status.
•
Reviewed the internal audit reports conducted by the
Audit & Inspection Unit of ICCD and their findings, along
with their compliance status and corrective actions taken
accordingly.
•
Reviewed the Report of Core Risk Assessment on ICC
of the Bank for the year 2021 and their findings, along
with their compliance status and corrective actions taken
accordingly.
•
Reviewed and approved the annual internal audit plan for
the year 2022.
•
Reviewed the report on loan documentation checklist
(LDC) on quarterly basis.
•
Reviewed the compliance of FRC Circular no. 179 dated 7 July,
2020 on direction related to forfeited fund from the contribution
of the employer in the contributory provident fund.
Meetings of the Committee
The Audit Committee of the Board held 7 (seven) meetings
during the year 2022 and engaged in detailed discussions
and reviews with the Head of Audit & Inspection, Head
of Internal Control & Compliance, internal auditors and
external auditors regarding their findings, observations and
remedial suggestions on issues of the Bank’s affairs that
warranted improvement. The Audit Committee instructed
the management to follow the remedial suggestions and
monitored them accordingly.
Audit Committee meetings
Date of meetings held
99th Audit Committee Meeting
09 March, 2022
100th Audit Committee Meeting
06 April, 2022
101st Audit Committee Meeting
11 May, 2022
102nd Audit Committee Meeting
26 June, 2022
103rd Audit Committee Meeting
20 July, 2022
104th Audit Committee Meeting
23 October, 2022
105th Audit Committee Meeting
27 October, 2022
During the year under report, the Committee also conducted
the following activities:
•
Reviewed the draft Auditor’s Report and audited
financial statements for 2021 and after discussing with
external auditors, recommended it to the Board for their
consideration.
300
Annual Report 2022
Acknowledgements
The Audit Committee wishes to express its heartfelt gratitude to
the members of the Board, the management, and internal and
external auditors for their exceptional support and assistance in
carrying out the committee's obligations and duties.
On behalf of the Audit Committee,
Dr. Salim Mahmud,
Convenor, Audit Committee
Governance at City Bank
REPORT OF THE BOARD’S RISK
MANAGEMENT COMMITTEE
“Risk management is a key foundational feature that supports the fulfillment of City Bank’s
long-term strategic objectives and inspires the day-to-day management of the Bank's
operations. The Bank has adopted a conservative strategy to assure that its risk management
activities continue to evolve in response to regulatory requirements as well as best practices
and industry trends. In this context, the Bank aims to carefully manage its risk profile in
accordance with the Board-approved risk perimeter. Shareholders will be satisfied to know
that the Bank continues to remain a steady, safe and secure ship even amid choppy waters.”
Hussain Khaled,
Convenor, Board’s Risk Management Committee
Overview
At City Bank, our risk appetite and business model rests on the following key organisational dimensions:
A medium-low, predictable
target risk profile, anchored
on well-diversified banking
operations and a growthoriented management focus
A stable and recurrent
earnings model, sustained
by a sound base of capital,
liquidity and funding
sources
The current banking environment is experiencing a crisis
of confidence as a result of the run-ins at SVB, a middletier American bank, and Credit Suisse, a European banking
behemoth. In such an environment, heightened surveillance
on credit risk is paramount, which, similar to other banks, is
Independent subsidiaries
primarily self-sufficient in
terms of capital and liquidity
that ensure their risk
profiles do not compromise
the Group’s solvency
An independent risk
function and a senior
management actively
engaged in supporting a
robust control environment
and risk culture
City Bank’s most significant risk in terms of exposure and
capital consumption. Thus, a significant area of focus of the
Board’s Risk Management Committee (BRMC) was vested in
credit risk surveillance and, together with it, market, liquidity
and operational risk management.
Committee structure
The Board of Directors of City Bank established the BRMC at its 452nd Meeting on 25 January 2014, re-established in 2018 and
2021, in order to pursue meticulous and purposeful risk governance that wraps a strong layer of defense around the Bank and
its operations.
The BRMC is responsible for evaluating the Bank's risk management systems and procedures, being inquisitorial on its application
Annual Report 2022
301
and providing practical assistance with appropriate resolutions while establishing crucial policies as judged essential. In addition
to the existing "Executive Committee" and "Audit Committee" of the Board, the formation of the BRMC satisfies the regulatory
compliance requirements of Bangladesh Bank, as directed in BRPD Circular No. 11 dated 27 October 2013.
City Bank’s BRMC is constituted by the following members of the Board:
Status with the Bank
Status with the
Committee
No. of
meetings held
No. of meetings
attended
Vice Chairman
Convenor
10
10
Mrs. Tabassum Kaiser
Director
Member
10
10
Mr. Hossain Mehmood
Nominated Director
Member
10
09
Director
Member
10
08
Director (Nominated by IFC)
Member
10
10
Name of Director
Mr. Hossain Khaled
Mr. Rajibul Huq Choudhury
Ms. Rebecca Brosnan
The company Secretary served as the Member Secretary for
•
Risk identification and development of a comprehensive
control strategy
•
Adoption of organisational structure, embedding risk
governance across the organisation
•
Review and adoption of the risk management policy
•
Risk reporting for archival and future referencing
•
Implementation supervision
management policy
•
Miscellaneous responsibilities, including quarterly
reporting of resolution and recommendations to the
Board, ensuring compliance with regulatory directives, and
evaluation of reports by internal/external auditors
•
Any other responsibility as assigned by the Board and
Bangladesh Bank
all meetings. Other invited attendees included the Chief Risk
Officer (CRO), Chief Financial Officer (CFO), Head of business
segments and risk divisions.
Meetings of the BRMC
BRMC met ten (10) times in 2022 to review and reflect on the
Bank's possible risk exposure/s, risk supervision mechanisms,
and corrective measures. Dates of BRMC meetings held during
the year are as follows:
of
the
overall
risk
BRMC meetings
Date of meetings
33rd Meeting
February 10, 2022
34th Meeting
February 24, 2022
35th Meeting
March 28, 2022
36th Meeting
May 19, 2022
2022 activities
37th Meeting
June 14, 2022
38th Meeting
August 30, 2022
39th Meeting
October 24, 2022
In 2022, BRMC launched many efforts in order to fulfill its
fundamental obligations as the Bank's custodian of risk
governance and stakeholder trust.
40th Meeting
November 15, 2022
41st Meeting
November 21, 2022
42nd Meeting
December 01, 2022
Roles and responsibilities of the BRMC
The Board has delegated its oversight of the Bank's risk
management to the Risk Management Committee with the
following mandate:
302
Annual Report 2022
Review of risk management policy and processes:
Prior to submission to the Board for approval, BRMC evaluated
the risk management policy, risk mitigation methodology and
risk reports, and offered suggestions based on its findings. It also
ensured specific focus on material issues, such as any deviation
and its justification, regulatory compliance, adherence to policy
review methods, etc. In several cases, BRMC recommended
more rigorous policies than required by regulation. The following
Governance at City Bank
are the primary policies examined by BRMC:
Recovery Plan
Revised
Asset Liability
Management
Policy with Liquidity
Contingency Plan
Revised Credit
Risk Management
Policy
Recommending risk appetite statements: BRMC reviewed
the Bank’s draft risk appetite statement for the year 2022,
before placing it to the Board for approval.
Asset quality monitoring: BRMC reviewed the Bank’s nonperforming loan management strategy with granular detail
across all business segments. The committee stayed focused
on SMAs (special mention accounts) and recovery from
delinquent assets, and reviewed implementation status of
the strategies adopted in the meetings. BRMC also monitored
judicial proceedings comprising recovery status from filed law
suits.
Review of key performance indicators for risk management:
At the beginning of 2022, a number of key performance
indicators (KPI) on risk management were set by the BRMC.
The performance/achievement against KPIs was reviewed
by BRMC on a quarterly basis for effective risk management
and control. KPIs were set for asset quality, portfolio under
moratorium, concentration risk, capital management,
liquidity,bank’s rating, E&S risk, ongoing legal cases, IT risk
including cybersecurity, etc.
Stringent monitoring of recovery from written-off and
classified loans: BRMC reviewed the accomplishments
against recovery targets with regards to the Bank’s efforts in
recovery from written-off loans.
Capital management: BRMC reviewed the Bank’s overall
capital management strategy and recommended the
constitution of a long-term business plan synced with capital
adequacy.
Reviewing activities of Sustainable Finance Unit: The
committee reviewed the sustainable finance and green
Revised
Environmental
& Social Risk
Management
Policy
Interest Waiver
Policy
Revised Loan
Rescheduling &
Restructuring
Policy
banking activities for the January-December 2022 period.
Reviewing activities of Executive Risk Management
Committee and Credit Risk Management Committee: BRMC
evaluated the activities of the Executive Risk Management
Committee and the Credit Risk Management Committee of
the Bank for the 2022 period.
Risk management reports and outcomes: BRMC reviewed the
monthly risk management report, half-yearly comprehensive
risk management report, and activities of the Executive Risk
Management Committee.
Risk management effectiveness report: The “Review Report
of Risk Management Policies and Effectiveness of Risk
Management Functions for the Year of 2022” was placed to
the BRMC for their observation before placing it to the Board.
Internal Capital Adequacy Assessment Process (ICAAP):
BRMC reviewed the Bank’s ICAAP and SRP (Supervisory
Review Process) documents developed based on 2021.
Stress-testing: The quarterly stress-testing results were
reviewed by BRMC and various recommendations were made
to improve the Bank’s risk resilience
Portfolio concentration strategies: BRMC reviewed the Bank’s
portfolio concentration risk and advised the management
to closely monitor account performance and pay special
attention to at-risk accounts.
Regulatory changes review: BRMC scrutinised the Bank’s
asset quality performance following the revised regulatory
policy, thereafter advised compatible propositions and
suggested monitoring the consequences.
Annual Report 2022
303
Chief Risk Officer’s statement: Continuing with the past, a
report titled ”CRO’s Statement on Risk Management” has
been introduced in the annual reporting practice. The Chief
Risk Officer (CRO) presented reports at BRMC meetings.
The content of the reports covered the macroeconomic
environment, geopolitical outlook and key risk trends, with a
particular focus on risk appetite, impact of the pandemic and
other major market events like the Russian invasion of Ukraine
on the Bank’s portfolio, markets and operations, and also
updates on key regulatory matters.
Economic recovery, risks and opportunities: A number of
internal resources were invited to the meetings in order to
provide the view and impact analysis on a variety of issues,
such as comments on the risks and difficulties posed by
the global economic climate and steps to address the risks.
The committee also focused on economic predictions and
amendments to provisions to account for the impact of any
potential adverse economic situations.
BRMC Meeting
Recommendation from
39th to 41st Meeting
Placed in the Board Meeting
627th Board Meeting held
on 09.01.2023
Future roadmap
BRMC meetings are always conducted on the basis of a
constructive dialogue, disseminating various suggestions and
recommendations to the management that are also placed
before the Board on a quarterly basis. BRMC has laid increased
emphasis on the impact of global economic scenarios as well
as major regulatory amendments. The committee is mindful
of the need to continue to foster its inquisitorial capacity into
stressed assets and recovery therefrom, and to maintain an
“effective and aware” risk culture and discipline.
Considering these, BRMC has revamped its focus on
implementing a risk control strategy to mitigate future
uncertainty. In 2023, the Committee will continue to monitor
Recommendations of the BRMC to the Board
the execution of the transition initiatives underway at the
The recommendations and decisions taken in the BRMC
meetings were placed to Board of Directors for their review.
Acknowledgements
Bank and its impact on the risk and control environment.
Placed in the Board Meeting
The Risk Management Committee of City Bank's Board of
Recommendation from
33rd Meeting
606th Board Meeting held
on 07.03.2022
the Board, the management team, and the Management Risk
Recommendation from
34th Meeting
610th Board Meeting held
on 28.04.2022
Recommendation from
35th Meeting
613th Board Meeting held
on 06.06.2022
Recommendation from
36th Meeting
614th Board Meeting held
on 21.06.2022
Recommendation from
37th Meeting
620th Board Meeting held
on 21.09.2022
Recommendation from
38th Meeting
623rd Board Meeting held
on 07.11.2022
BRMC Meeting
304
Annual Report 2022
Directors extends its heartfelt appreciation to the members of
Committee for their unwavering and constructive support. We
look forward to a continued period of cooperation and support
for strengthening the Bank’s risk governance and control
practices.
On behalf of the Board’s Risk Management Committee,
Hossain Khaled
Convenor, Board’s Risk Management Committee
Governance at City Bank
OUR CORPORATE
GOVERNANCE STRUCTURE
Digital Financial
Services
Brand &
Communications
and
Annual Report 2022
305
BANGLADESH BANK’S GUIDELINES
FOR CORPORATE GOVERNANCE AND
OUR COMPLIANCE STATUS
Status of Compliance of Bangladesh Bank’s Guidelines for Corporate Governance
(BRPD circular No. 6 dated 04.02.2010)
SL
Particulars
No.
1.
Responsibilities and authorities of the Board of Directors:
(a) Work-planning and strategic management
Compliance
Status
Complied
(i) The Board shall determine the objectives and goals and to this end shall chalk out strategies and workplans on annual basis. It shall specially engage itself in the affairs of making strategies consistent with
the determined objectives and goals and in the issues relating to structural change and reorganization
for enhancement of institutional efficiency and other relevant policy matters. It shall analyze/monitor at
quarterly rests the development of implementation of the work-plans
(ii) The Board shall have its analytical review incorporated in the Annual Report as regard the success/
failure in achieving the business and other targets as set out in its annual work-plan and shall appraise
the shareholders of its opinions/recommendations on future plans and strategies. It shall set the Key
Performance Indicators (KPIs) for the CEO and other senior executives and have it evaluated at times.
(b) Lending and risk management
Complied
(i) The policies, strategies, procedures etc. in respect of appraisal of loan/investment proposal, sanction,
disbursement, recovery, reschedulement and write-off thereof shall be made with the board’s approval
under the purview of the existing laws, rules and regulations. The Board shall specifically distribute the
power of sanction of loan/investment and such distribution should desirably be made among the CEO
and his subordinate executives as much as possible. No director, however, shall interfere, directly or
indirectly, into the process of loan approval.
(ii) The Board shall frame policies for risk management and get them complied with and shall monitor at
quarterly rests the compliance thereof.
(c) Internal control management
Complied
The Board shall be vigilant on the internal control system of the bank in order to attain and maintain
satisfactory qualitative standard of its loan/investment portfolio. It shall review at quarterly rests the
reports submitted by its audit committee regarding compliance of recommendations made in internal
and external audit reports and the Bangladesh Bank inspection reports.
(d) Human resources management and development
(i) Policies relating to recruitment, promotion, transfer, disciplinary and punitive measures, human
resources development etc. and service rules shall be framed and approved by the board. The Chairman
or the Directors shall in no way involve themselves or interfere into or influence over any administrative
affairs including recruitment, promotion, transfer and disciplinary measures as executed under the set
service rules. No member of the Board of Directors shall be included in the selection committees for
recruitment and promotion to different levels. Recruitment and promotion to the immediate two tiers
below the CEO shall,
306
Annual Report 2022
Complied
Compliance
Status
Particulars
however, rest upon the board. Such recruitment and promotion shall have to be carried out complying
with the service rules i.e. policies for recruitment and promotion.
Complied
(ii) The Board shall focus its special attention to the development of skills of bank’s staff in different fields
of its business activities including prudent appraisal of loan/investment proposals, and to the adoption
of modern electronic and information technologies and the introduction of effective Management
Information System (MIS). The Board shall get these programs incorporated in its annual work plan.
(e) Financial management
Complied
(i) The annual budget and the statutory financial statements shall finally be prepared with the approval
of the Board. It shall at quarterly rests review/ monitor the positions in respect of bank’s income,
expenditure, liquidity, non-performing asset, capital base and adequacy, and maintenance of loans. Loss
provision and steps taken for recovery of defaulted loans including legal measures.
(ii) The Board shall frame the policies and procedures for Bank’s purchase and procurement activities
and shall accordingly approve the distribution of power for making such expenditures. The maximum
possible delegation of such power shall rest on the CEO and his subordinates. The decision on matters
relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of
Bank’s business shall, however, be adopted with the approval of the board.
(f) Formation of supporting committee
Complied
For decision on urgent matters an executive committee, whatever name called, may be formed with
the directors. There shall be no committee or sub-committee of the Board other than the Executive
Committee and the Audit Committee. No alternate director shall be included in these committee.
(g) Appointment of CEO
Complied
(i) The Board shall appoint a competent CEO for the bank with the approval of the Bangladesh Bank.
2.
3.
(ii) The Board shall ensure fulfilling any other responsibility(ies) appropriately assigned by the Central
Bank.
Responsibilities of the Chairman and Board of Director
(a) Chairman of the Board of Directors (or Chairman of any committee formed by the Board or any
Director) does not personally possess the jurisdiction to apply policy making or executive authority, he
shall not participate in or interfere into the administrative or operational and routine affairs of the bank.
(b) The Chairman may conduct on-site inspection of any bank-branch or financing activities under the
purview of the oversight responsibilities of the board. He may call for any information relating to bank’s
operation or ask for investigation into any such affairs; he may submit such information or investigation
report to the meeting of the Board or the Executive Committee and if deemed necessary, with the
approval of the board, he shall effect necessary action thereon in accordance with the set rules through
the CEO. However, any complaint against the CEO shall have to be appraised to Bangladesh Bank through
the Board along with the statement of the CEO.
(c) The Chairman may be offered an office-room, a personal secretary/assistant, a telephone at the office
and a vehicle in the business-interest of the bank subject to the approval of the board.
Complied
Compliance
Complied
Responsibilities of Advisor
No such
The Advisor, whatever name called, shall advise the board of directors or the CEO on such issues only for
which he is engaged in terms of the conditions of his appointment. He shall neither have access to the Advisor at the
Bank.
process of decision-making nor shall have the scope of effecting executive authority in any matters of the
bank including financial, administrative or operational affairs.
Annual Report 2022
307
Governance at City Bank
SL
No.
SL
Particulars
No.
4.
Responsibilities and authorities of CEO
5.
6.
7.
308
Compliance
Status
The CEO of the bank, whatever name called, shall discharge the responsibilities and effect the authorities
as follows:
(a) In terms of the financial, business and administrative authorities vested upon him by the Board, the
CEO shall discharge his own responsibilities. He shall remain accountable for achievement of financial
and other business targets by means of business plan, efficient implementation thereof and prudent
administration and financial management.
(b) The CEO shall ensure compliance of the Bank Companies Act. 1991 and/or other relevant laws and
regulations in discharge of routine functions of the bank.
(c) The CEO shall clearly include any violation from Bank Companies Act, 1991 and/or any other related
laws/regulations in the Memo presented to the meeting of the Board or any other Committee(s) engaged
by the Board.
(d) The CEO shall report to Bangladesh Bank of issues in violation of the Bank Companies Act. 1991 or of
other laws/regulations and, if required, may apprise the Board post facto.
(e) The recruitment and promotion of all staff of the bank except those in the two tiers below him shall
rest on the CEO. He shall act in such cases in accordance with the approved service rules on the basis of
the human resources policies and sanction strength of employees as approved by the board. The Board
or the Chairman of any committee of the Board or any director shall not get involved or interfere into such
affairs. The authority relating to transfer of and disciplinary measures against the staff, except those at
one tier below the CEO, shall rest on him, which he shall apply in accordance with the approved service
rules. Besides, under the purview of the human resources policy as approved by the Board, he shall
nominate officers for training etc.
Complied
One meeting of the Board of Directors per month can be held usually but it can be more than one upon
necessity. No less than one meeting of the Board in three months to be held.
Complied
Number of members of EC cannot exceed 7 members as per BRPD Circular. Letter No. 2 dated February
15, 2010 and more than one member from one family shall not be included in the EC as per BRPD Circular
Letter No. 4 dated March 14, 2010
Complied
The Directors of the Board will acquire appropriate knowledge of the Banking Laws and other relevant
laws, rules and regulations to effectively discharge the responsibilities as a director of the Bank.
Complied
Meetings of the Board of Directors
Number of members of Executive Committee (EC) of the Board
Training of the Directors
Annual Report 2022
Complied
Complied
Complied
Complied
Complied
Governance at City Bank
309
Annual Report 2022
THE CITY BANK LIMITED CORPORATE
GOVERNANCE COMPLIANCE REPORT
Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commission’s (BSEC) through
Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated 03 June 2018, issued under section 2CC of the Securities and
Exchange Ordinance, 1969 is presented below:
Condition
No.
Title
1. Board of Directors
1.1 Board size
The number of Board Directors should not be less than 5 (five) and
more than 20 (twenty).
1.2 Independent Directors
(a)
At least one fifth (1/5) of the total number of Directors in
the Company’s board shall be independent directors.
(b)(i)
Who either does not hold any share or holds less than 1%
shares to the total paid-up shares of the Company;
(b)(ii)
Who is not a sponsor of the Company and is not connected
with the companies any sponsor or director or shareholder
who holds one percent (1%) or more share of the total
paid-up shares of the company on the basis of family
relationship.
(b)(iii)
(b)(iv)
(b)(iv)
(b)(vi)
(b)(vii)
310
Provided that spouse, son, daughter, father, mother,
brother, sister son-in-law and daughter-in-law shall be
considered as family members;
who has not been an executive of the Company in
immediately preceding 2 (two) financial years;
Who does not have any other relationship whether
pecuniary or otherwise, with the Company or its subsidiary/
associated companies or its subsidiary /associated
companies;
who is not a member or TREC (Trading Right Entitlement
Certificate) holder, director or officer of any stock exchange;
who is not a shareholder, director excepting independent
director or officer of any member or TREC holder of stock
exchange or an intermediary of the capital market;
who is not a partner or an executive or was not a partner or an
executive during the preceding 3 (three) years of the concerned
Company’s statutory audit firm or audit firm engaged in
internal audit services or audit firm conducting special audit or
professional certifying compliance of this Code;
Annual Report 2022
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
√
√
√
√
√
√
√
√
√
Remarks
(b) (viii)
(b) (ix)
(b) (x)
(c)
(d)
(e)
Title
Who is not independent director in more than 5 (five) listed
companies;
Who has not been convicted by a court of competent
jurisdiction as a defaulter in payment of any loan to a bank
or a Non-Bank Financial Institution (NBFI);
Who has not been convicted for a criminal offence involving
moral turpitude;
The independent director(s) shall be appointed by the
board of directors and approved by the shareholders in the
Annual General Meeting (AGM).
The post of independent director(s) cannot remain vacant
for more than 90 (ninety) days.
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
√
√
√
√
√
The tenure of office of an independent director shall be for
a period of 03 (three) years, which may be extended for 1
(one) tenure only:
Provided that a former independent director may be
considered for reappointment for another tenure after
a time gap of one tenure, i.e., three years from his or her
completion of consecutive two tenures
1.3 Qualification of Independent Director (ID)
(a)
Independent Director shall be a knowledgeable individual
with integrity who is able to ensure compliance with
financial, regulatory and corporate laws and can make
meaningful contribution to business.
(b)
Independent Director shall have following qualifications:
(b)(i)
Business Leader who is or was a promoter or director of
an unlisted company having minimum paid-up capital of
Tk. 100.00 million or any listed company or a member of
any national or international chamber of commerce or
business association;
(b)(ii)
Corporate Leader who is or was a top level executive not
lower than Chief Executive Officer or Managing Director or
Deputy Managing Director or Chief Financial Officer or Head
of Finance or Accounts or Company Secretary or Head of
Internal Audit and Compliance or Head of Legal Service or a
candidate with equivalent position of an unlisted company
having minimum paid-up capital of Tk. 100.00 million or of
a listed company;
√
√
Not applicable.
Not applicable.
Annual Report 2022
311
Condition
No.
(b)(iii)
(b)(iv)
Title
Former official of government or statutory or autonomous
or regulatory body in the position not below 5th Grade
of the national pay scale, who has at least educational
background of bachelor’s degree in economics or
commerce or business or Law;
University Teacher who has educational background in
Economics or Commerce or Business Studies or Law; or
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
√
√
(b) (v)
Professional who is or was an advocate practicing at least
in the High Court Division of Bangladesh Supreme Court
or a Chartered Accountant or Cost and Management
√
Accountant or Chartered Financial Analyst or Chartered
Certified Accountant or Certified Public Accountant or
Chartered Management Accountant or Chartered Secretary
or equivalent qualification.
(c)
The independent director shall have at least 10 (ten) years
√
of experiences in any field Mentioned in clause (b).
(d)
In special cases, the above qualifications or experiences
Not applicable
may be relaxed subject to prior approval of the Commission.
1.4 Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer
(a)
The positions of the Chairperson of the Board and the
Managing Director (MD) and/or Chief Executive Officer
√
(CEO) of the company shall be filled by different individuals
(b)
The Managing Director (MD) and/or Chief Executive Officer
(CEO) of a listed company shall not hold the same position
√
in another listed company.
(c)
The Chairperson of the Board shall be elected from among
√
the non-executive directors of the company.
(d)
The Board shall clearly define respective roles and
responsibilities of the Chairperson and the Managing
√
Director and/or Chief Executive Officer.
(e)
In the absence of the Chairperson of the Board, the
remaining members may elect one of themselves from
√
non­executive directors as Chairperson for that particular
Board’s meeting; the reason of absence of the regular
Chairperson shall be duly recorded in the minutes.
1.5 The Directors’ Report to Shareholders
(i)
Industry outlook and possible future development in the
√
industry.
(ii)
Segment-wise or product-wise performance.
√
(iii)
(iv)
312
Risks and concerns.
A discussion on Cost of Goods sold, Gross Profit Margin
and Net Profit Margin.
Annual Report 2022
√
√
Title
(v)
Discussion on continuity of any Extra-Ordinary gain or loss.
(vi)
A detailed discussion on related party transactions along
with a statement showing amount, nature of related party,
nature of transactions and basis of transactions of all
related party transactions.
A statement of utilization of proceeds raised through
public issues, rights issues and/or any other instruments
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
Remarks
Not applicable.
√
Not applicable as no such
events has occurred during
2022.
Not applicable as no such
events has occurred during
2022.
Not applicable as no
significant variance exists
between quarterly financial
performance and annual
financial statements.
An explanation if the financial results deteriorate after the
company goes for Initial Public Offering (IPO), Repeat Public
Offering (RPO), Rights Share Offer, Direct Listing, etc.
An explanation on any significant variance that occurs
between Quarterly Financial performances and Annual
Financial Statements
A statement of remuneration paid to the directors including
independent directors
A statement that the financial statements prepared by
the management of the issuer company present fairly its
state of affairs, the result of its operations, cash flows and
changes in equity
A statement that proper books of account of the issuer
company have been maintained
A statement that appropriate accounting policies have
been consistently applied in preparation of the financial
statements and that the accounting estimates are based
on reasonable and prudent judgment
A statement that International Accounting Standards
(IAS) or International Financial Reporting Standards
(IFRS), as applicable in Bangladesh, have been followed in
preparation of the financial statements and any departure
there from has been adequately disclosed
A statement that the system of internal control is sound
in design and has been effectively implemented and
monitored.
A statement that minority shareholders have been
protected from abusive actions by, or in the interest of,
controlling shareholders acting either directly or indirectly
and have effective means of redress.
A statement that there is no significant doubt upon the
issuer company’s ability to continue as a going concern, if
the issuer company is not considered to be a going concern,
the fact along with reasons there of shall be disclosed
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
√
√
√
√
√
√
√
√
Annual Report 2022
313
Condition
No.
Title
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
(xviii)
An explanation that significant deviations from the last
√
year’s operating results of the issuer company shall be
highlighted and the reasons thereof shall be explained
(xix)
A statement where key operating and financial data of at
√
least preceding 05 (five) years shall be summarized.
(xx)
An explanation on the reasons if the issuer company has
Not applicable
not declared dividend (cash or stock) for the year
Not applicable
(xxi)
Board’s statement to the effect that no bonus share or
stock dividend has been or shall be declared as interim
dividend.
(xxii)
The total number of Board meetings held during the year
√
and attendance by each director
(xxiii)
Pattern of shareholding and name wise details (disclosing aggregate number of shares):
(xxiii)(a) Parent or Subsidiary or Associated Companies and other
√
related parties (name-wise details)
(xxiii)(b) Directors, Chief Executive Officer, Company Secretary, Chief
Financial Officer, Head of Internal Audit and Compliance
√
and their spouses and minor children (name-wise details)
(xxiii)(c) Executives (top five salaried employees of the company,
other than the Directors, Chief Executive Officer, Company
√
Secretary, Chief Financial Officer and Head of Internal
Audit).
(xxiii)(d) Shareholders holding ten percent (10%) or more voting
√
interest in the company (name-wise details)
(xxiv)
In case of the appointment or re-appointment of a director, a disclosure on the following information to the
shareholders
(xxiv)(a) a brief resume of the director
√
(xxiv)(b) nature of his or her expertise in specific functional areas
√
(xxiv)(c) names of companies in which the person also holds the
directorship and the membership of committees of the
√
Board
(xxv)
Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s
position and operations along with a brief discussion of changes in the financial statements, among others,
focusing on
(xxv)(a) accounting policies and estimation for preparation of
√
financial statements.
(xxv) (b) changes in accounting policies and estimation, if any,
clearly describing the effect on financial performance
√
or results and financial position as well as cash flows in
absolute figure for such changes.
314
Annual Report 2022
Title
(xxv) (c) comparative analysis (including effects of inflation) of
financial performance or results and financial position
as well as cash flows for current financial year with
immediately preceding five years explaining reasons
thereof.
(xxv) (d) compare such financial performance or results and
financial position as well as cash flows with the peer
industry scenario.
(xxv) (e) briefly explain the financial and economic scenario of the
country and the globe.
(xxv) (f) risks and concerns issues related to the financial
statements, explaining such risk and concerns mitigation
plan of the company
(xxv) (g) future plan or projection or forecast for company’s
operation, performance and financial position, with
justification thereof, i.e., actual position shall be explained
to the shareholders in the next AGM.
(xxvi)
Declaration or certification by the CEO and the CFO to
the Board as required under condition No. 3(3) shall be
disclosed as per Annexure-A
(xxvii)
The report as well as certificate regarding compliance of
conditions of this Code as required under condition No. 9
shall be disclosed as per Annexure-B and Annexure-C.
1.6 Meetings of the Board of Directors
The company shall conduct its Board meetings and record
the minutes of the meetings as well as keep required
books and records in line with the provisions of the relevant
Bangladesh Secretarial Standards (BSS) as adopted by the
Institute of Chartered Secretaries of Bangladesh (ICSB) in
so far as those standards are not inconsistent with any
condition of this Code
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
√
√
√
√
√
√
√
√
Annual Report 2022
315
Compliance status
(Put √ in the
Condition
appropriate column)
Title
No.
Not
Complied
complied
1.7 Code of Conduct for the Chairperson, other Board members and Chief Executive Officer
√
(a)
The Board shall lay down a code of conduct, based on the
recommendation of the Nomination and Remuneration
Committee (NRC) at condition No. 6, for the Chairperson
of the Board, other board members and Chief Executive
Officer of the company.
√
(b)
The code of conduct as determined by the NRC shall be
posted on the website of the company including, among
others, prudent conduct and behavior ; confidentiality;
conflict of interest; compliance with laws, rules and
regulations; prohibition of insider trading; relationship with
environment, employees, customers and suppliers; and
independency.
2
(c)
(d)
(e)
316
NRC not formed.
As per BRPD Circular Letter
No.11, dated 27 October
2013 of Bangladesh Bank,
“Formation of committees
from the Board of Directors:
Each bank company can form
1 (one) executive committee,
1 (one) audit committee and
1 (one) risk management
committee with the directors.
Board can’t form any other
permanent, temporary or
sub-committee except the
above mentioned three
committees.
Governance of Board of Directors of Subsidiary Company
(a)
(b)
3
Remarks
Provisions relating to the composition of the Board of
the holding company shall be made applicable to the
composition of the Board of the subsidiary company.
At least 1 (one) independent director on the Board of the
holding company shall be a director on the Board of the
subsidiary company
The minutes of the Board meeting of the subsidiary
company shall be placed for review at the following Board
meeting of the holding company.
The minutes of the respective Board meeting of the holding
company shall state that they have reviewed the affairs of
the subsidiary company also.
The Audit Committee of the holding company shall
also review the financial statements, in particular the
investments made by the subsidiary company.
√
√
√
√
√
Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal
Audit and Compliance (HIAC) and Company Secretary (CS)
3.1
Appointment
(a)
The Board shall appoint a Managing Director (MD) or Chief
Executive Officer (CEO), a Company Secretary (CS), a Chief
Financial Officer (CFO) and a Head of Internal Audit and
Compliance (HIAC).
Annual Report 2022
√
(b)
(c)
(d)
(e)
3.2
3.3
(a)
(a)(i)
(a)(ii)
(b)
(c)
4
Title
The positions of the Managing Director (MD) or Chief
Executive Officer (CEO), Company Secretary (CS), Chief
Financial Officer (CFO) and Head of Internal Audit and
Compliance (HIAC) shall be filled by different individuals.
The MD or CEO, CS, CFO and HIAC of a listed company shall
not hold any executive position in any other company at
the same time.
The Board shall clearly define respective roles,
responsibilities and duties of the CFO, the HIAC and the CS.
The MD or CEO, CS, CFO and HIAC shall not be removed
from their position without approval of the Board as well
as immediate dissemination to the Commission and stock
exchange(s).
Remarks
√
√
√
√
Requirement to attend Board of Directors’ Meetings
The MD or CEO, CS, CFO and HIAC of the company shall
attend the meetings of the Board:
Provided that the CS, CFO and/or the HIAC shall not
√
attend such part of a meeting of the Board which involves
consideration of an agenda item relating to their personal
matters
Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and
that to the best of their knowledge and belief:
these statements do not contain any materially untrue
statement or omit any material fact or contain statements
√
that might be misleading.
these statements together present a true and fair view of
the company’s affairs and are in compliance with existing
√
accounting standards and applicable laws.
The MD or CEO and CFO shall also certify that there are,
to the best of knowledge and belief, no transactions
√
entered into by the company during the year which are
fraudulent, illegal or in violation of the code of conduct for
the company’s Board or its members.
The certification of the MD or CEO and CFO shall be
√
disclosed in the Annual Report.
Board of Directors’ Committee
(i)
(ii)
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Audit Committee
Nomination and Remuneration Committee
√
√
NRC not formed. Explanation
Mentioned in 1.7.
Annual Report 2022
317
Condition
No.
5
Audit Committee
5.1
(a)
(b)
(c)
5.2
(a)
(b)
(c)
(d)
(e)
(f)
5.3
(a)
318
Title
Responsibility to the Board of Directors
The company shall have an Audit Committee as a
subcommittee of the Board.
The Audit Committee shall assist the Board in ensuring
that the financial statements reflect true and fair view of
the state of affairs of the company and in ensuring a good
monitoring system within the business.
The Audit Committee shall be responsible to the Board; the
duties of the Audit Committee shall be clearly set forth in
writing.
Constitution of the Audit Committee
The Audit Committee shall be composed of at least 3
(three) members
The Board shall appoint members of the Audit Committee
who shall be non-executive directors of the company
excepting Chairperson of the Board and shall include at
least 1 (one) independent director.
All members of the audit committee should be “financially
literate” and at least 1 (one) member shall have accounting
or related financial management background and 10 (ten)
years of such experience.
When the term of service of any Committee member
expires or there is any circumstance causing any Committee
member to be unable to hold office before expiration of the
term of service, thus making the number of the Committee
members to be lower than the prescribed number of
3 (three) persons, the Board shall appoint the new
Committee member to fill up the vacancy immediately or
not later than 1 (one) month from the date of vacancy in
the Committee to ensure continuity of the performance of
work of the Audit Committee.
The company secretary shall act as the secretary of the
Committee.
The quorum of the Audit Committee meeting shall not
constitute without at least 1 (one) independent director.
Chairperson of the Audit Committee
The Board shall select 1 (one) member of the Audit
Committee to be Chairperson of the Audit Committee, who
shall be an independent director
Annual Report 2022
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
√
√
√
√
√
√
Not Applicable
√
√
√
(b)
(c)
5.4
(a)
(b)
5.5
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
Title
In the absence of the Chairperson of the Audit
Committee, the remaining members may elect one of
themselves as Chairperson for that particular meeting,
in that case there shall be no problem of constituting a
quorum as required under condition No. 5(4)(b) and the
reason of absence of the regular Chairperson shall be
duly recorded in the minutes
Chairperson of the Audit Committee shall remain present
in the Annual General Meeting (AGM).
Meeting of the Audit Committee
The Audit Committee shall conduct at least its four
meetings in a financial year.
The quorum of the meeting of the Audit Committee
shall be constituted in presence of either two members
or two-third of the members of the Audit Committee,
whichever is higher, where presence of an independent
director is a must
Role of Audit Committee
Oversee the financial reporting process
monitor choice of accounting policies and principles
monitor Internal Audit and Compliance process to ensure
that it is adequately resourced, including approval of the
Internal Audit and Compliance Plan and review of the
Internal Audit and Compliance Report
oversee hiring and performance of external auditors
hold meeting with the external or statutory auditors
for review of the annual financial statements before
submission to the Board for approval or adoption
review along with the management, the annual financial
statements before submission to the Board for approval
review along with the management, the quarterly and
half yearly financial statements before submission to the
Board for approval
review the adequacy of internal audit function
review the Management’s Discussion and Analysis before
disclosing in the Annual Report
review statement of all related party transactions
submitted by the management
review Management Letters or Letter of Internal Control
weakness issued by statutory auditors
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Annual Report 2022
319
Condition
No.
(l)
(m)
5.6
(a)
(a)(i)
(a)(ii)
(a)(ii)(a)
(a)(ii)(b)
(a)(ii)(c)
(a)(ii)(d)
(b)
5.7
320
Title
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
oversee the determination of audit fees based on scope
and magnitude, level of expertise deployed and time
√
required for effective audit and evaluate the performance
of external auditors; and
Not applicable as no
oversee whether the proceeds raised through Initial Public
events occurred.
Offering (IPO) or Repeat Public Offering (RPO) or Rights
Share Offer have been utilized as per the purposes stated
in relevant offer document or prospectus approved by the
Commission.
Reporting of the Audit Committee
Reporting to the Board of Directors
The Audit Committee shall report on its activities to the
√
Board
The Audit Committee shall immediately report to the Board on the following findings, if any:
report on conflicts of interests
Not applicable as no
events occurred yet.
Not applicable as no
suspected or presumed fraud or irregularity or material
events occurred yet.
defect identified in the internal audit and compliance
process or in the financial statements
suspected infringement of laws, regulatory compliances
Not applicable as no
including securities related laws, rules and regulations
events occurred yet.
any other matter which the Audit Committee deems
Not applicable as no
necessary shall be disclosed to the Board immediately
events occurred yet.
Reporting to the Authorities
Not applicable as no
If the Audit Committee has reported to the Board about
events occurred yet.
anything which has material impact on the financial
condition and results of operation and has discussed with
the Board and the management that any rectification
is necessary and if the Audit Committee finds that such
rectification has been unreasonably ignored, the Audit
Committee shall report such finding to the Commission,
upon reporting of such matters to the Board for three
times or completion of a period of 6 (six) months from the
date of first reporting to the Board, whichever is earlier
Reporting to the Shareholders and General Investors
Not applicable as no
Report on activities carried out by the Audit Committee,
events occurred yet.
including any report made to the Board under condition
No. 5(6)(a)(ii) above during the year, shall be signed by the
Chairperson of the Audit Committee and disclosed in the
annual report of the issuer company.
Annual Report 2022
such
such
such
such
such
such
such
6
Title
Nomination and Remuneration Committee (NRC)
6.1
(a)
(b)
(c)
6.2
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Responsibility to the Board of Directors
The company shall have a Nomination and Remuneration
Committee (NRC) as a sub-committee of the Board
The NRC shall assist the Board in formulation of the
nomination criteria or policy for determining qualifications,
positive attributes, experiences and independence of
directors and top level executive as well as a policy for
formal process of considering remuneration of directors,
top level executive
The Terms of Reference (ToR) of the NRC shall be clearly set
forth in writing covering the areas stated at the condition
No. 6(5)(b).
Constitution of the NRC
The Committee shall comprise of at least three members
including an independent director
All members of the Committee shall be non-executive
directors
Members of the Committee shall be nominated and
appointed by the Board
The Board shall have authority to remove and appoint any
member of the Committee
In case of death, resignation, disqualification, or removal
of any member of the Committee or in any other cases
of vacancies, the board shall fill the vacancy within 180
(one hundred eighty) days of occurring such vacancy in the
Committee.
The Chairperson of the Committee may appoint or coopt any external expert and/or member(s) of staff to the
Committee as advisor who shall be non-voting member, if
the Chairperson feels that advice or suggestion from such
external expert and/or member(s) of staff shall be required
or valuable for the Committee
The company secretary shall act as the secretary of the
Committee
The quorum of the NRC meeting shall not constitute
without attendance of at least an independent director
No member of the NRC shall receive, either directly or
indirectly, any remuneration for any advisory or consultancy
role or otherwise, other than Director’s fees or honorarium
from the company
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
Remarks
NRC not formed as
Mentioned in 1.7.
√
√
√
√
√
√
√
√
√
√
√
√
Annual Report 2022
321
Condition
No.
6.3
(a)
(b)
(c)
6.4
(a)
(b)
(c)
(d)
6.5
(a)
(b)
(b)(i)
(b)(i)(a)
(b)(i)(b)
322
Title
Chairperson of the NRC
The Board shall select 1 (one) member of the NRC to
be Chairperson of the Committee, who shall be an
independent director
In the absence of the Chairperson of the NRC, the remaining
members may elect one of themselves as Chairperson
for that particular meeting, the reason of absence of the
regular Chairperson shall be duly recorded in the minutes
The Chairperson of the NRC shall attend the annual general
meeting (AGM) to answer the queries of the shareholders
Provided that in absence of Chairperson of the NRC,
any other member from the NRC shall be selected to be
present in the annual general meeting (AGM) for answering
the shareholder’s queries and reason for absence of the
Chairperson of the NRC shall be recorded in the minutes
of the AGM
Meeting of the NRC
The NRC shall conduct at least one meeting in a financial
year
The Chairperson of the NRC may convene any emergency
meeting upon request by any member of the NRC
The quorum of the meeting of the NRC shall be constituted
in presence of either two members or two third of the
members of the Committee, whichever is higher, where
presence of an independent director is must as required
under condition No. 6(2)(h)
The proceedings of each meeting of the NRC shall duly
be recorded in the minutes and such minutes shall be
confirmed in the next meeting of the NRC
Role of the NRC
NRC shall be independent and responsible or accountable
to the Board and to the shareholders
NRC shall oversee, among others, the following matters
and make report with recommendation to the Board
formulating the criteria for determining qualifications,
positive attributes and independence of a director
and recommend a policy to the Board, relating to the
remuneration of the directors, top level executive,
considering the following
the level and composition of remuneration is reasonable
and sufficient to attract, retain and motivate suitable
directors to run the company successfully
the relationship of remuneration to performance is clear
and meets appropriate performance benchmarks
Annual Report 2022
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
√
√
√
√
√
√
√
√
√
√
√
√
Remarks
(b)(i)(c)
(b)(ii)
(b)(iii)
(b)(iv)
(b)(v)
(b)(vi)
7
Governance at City Bank
Condition
No.
Compliance status
(Put √ in the
appropriate column)
Title
Not
Complied
complied
√
remuneration to directors, top level executive involves a
balance between fixed and incentive pay reflecting short
and long-term performance objectives appropriate to the
working of the company and its goals
√
devising a policy on Board’s diversity taking into
consideration age, gender, experience, ethnicity,
educational background and nationality
√
identifying persons who are qualified to become directors
and who may be appointed in top level executive position
in accordance with the criteria laid down, and recommend
their appointment and removal to the Board.
formulating the criteria for evaluation of performance of
√
independent directors and the Board
√
identifying the company’s needs for employees at
different levels and determine their selection, transfer or
replacement and promotion criteria
developing, recommending and reviewing annually the
√
company’s human resources and training policies
Remarks
External or Statutory Auditors
7.1
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
7.2
7.3
The issuer company shall not engage its external or statutory auditors to perform the following services of the
company
appraisal or valuation services or fairness opinions
√
financial information systems design and implementation
√
book-keeping or other services related to the accounting
√
records or financial statements
broker-dealer services
√
actuarial services
√
internal audit services or special audit services
√
any service that the Audit Committee determines
√
audit or certification services on compliance of corporate
√
governance as required under condition No. 9(1)
any other service that creates conflict of interest
√
No partner or employees of the external audit firms
shall possess any share of the company they audit at
least during the tenure of their audit assignment of that
company; his or her family members also shall not hold
√
any shares in the said company
Provided that spouse, son, daughter, father, mother,
brother, sister, son-in-law and daughter-in-law shall be
considered as family members
Representative of external or statutory auditors shall
remain present in the Shareholders’ Meeting (Annual
General Meeting or Extraordinary General Meeting) to
answer the queries of the shareholders
√
Annual Report 2022
323
Condition
No.
8
Maintaining a website by the Company
8.1
8.2
8.3
9
The company shall have an official website linked with the
website of the stock exchange.
The company shall keep the website functional from the
date of listing.
The company shall make available the detailed disclosures
on its website as required under the listing regulations of
the concerned stock exchange(s).
√
√
√
Reporting and Compliance of Corporate Governance
9.1
9.2
9.3
324
Title
Compliance status
(Put √ in the
appropriate column)
Not
Complied
complied
The company shall obtain a certificate from a practicing
Professional Accountant or Secretary (Chartered
Accountant or Cost and Management Accountant or
Chartered Secretary) other than its statutory auditors
or audit firm on yearly basis regarding compliance
of conditions of Corporate Governance Code of the
Commission and shall such certificate shall be disclosed in
the Annual Report
The professional who will provide the certificate on
compliance of this Corporate Governance Code shall be
appointed by the shareholders in the annual general
meeting
The directors of the company shall state, in accordance
with the Annexure-C attached, in the directors’ report
whether the company has complied with these conditions
or not
Annual Report 2022
√
√
√
Remarks
Financial Statements 2022
Financial Statements of
the City Bank Limited 2022
Annual Report 2022
325
Independent Auditor’s Report
TO THE SHAREHOLDERS OF THE CITY BANK LIMITED
Report on the Audit of the Consolidated and Separate Financial Statements
Opinion
We have audited the consolidated financial statements of The City Bank Limited and its subsidiaries (the "Group") as well as the separate financial
statements of The City Bank Limited (the "Bank"), which comprise the consolidated and separate Balance Sheets as at 31 December 2022, and
consolidated and separate Profit and Loss Accounts, consolidated and separate statement of Changes in Equity, and consolidated and separate
Cash Flow Statements for the year then ended, and notes to consolidated and separate financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Bank give a true and
fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2022, and of
its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRSs) as explained in note 2.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We
are independent of the Group and the Bank in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for
Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC), and Bangladesh Bank, and we have fulfilled our
other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye-Laws. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial
statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.
Description of key audit matters
Our response and result to key audit matters
Measurement of provision for loans and advances
The process for estimating the provision for loans, advances We tested the design and operating effectiveness of key controls focusing on
and leases portfolio associated with credit risk is significant the following:
and complex.
•
Credit appraisal, loan disbursement procedures, monitoring and
For the individual analysis for large exposure, provision
provisioning process;
calculation considers the estimates of future business
Identification of loss events, including early warning and default warning
performance and the market value of the collateral provided •
indicators;
for credit transactions.
For the collective analysis of exposure on a portfolio basis, •
provision calculation and reporting are manually processed
that deal with voluminous databases, assumptions and
estimates.
Due to the high level of judgment involved and using manual
process in estimating the provision for loans and advances,
•
we considered this to be a key audit matter.
At year end the Group and Bank reported total gross loans
and advances of BDT 356,295 million (2021: BDT 288,317
million) and BDT 354,774 million (2021: BDT 286,380 million) •
respectively and provision for loans and advances of BDT
12,372 million (2021: BDT 10,596 million) and BDT 12,362 •
million (2021: BDT 10,575 million)
326
Annual Report 2022
Reviewed the adequacy of transfer of interests to the Income account
appropriate approvals in line with the Bangladesh Bank’s guidelines.
Reviewed the adequacy of the general and specific provisions in line
with related Bangladesh Bank guidelines. Reviewed the grounds for
recommendations for approvals in cases of transfer of interests to
Income account;
Assessed the methodologies on which the provision amounts are based,
recalculated the provisions, and tested the completeness and accuracy of
the underlying information;
Evaluated the appropriateness and presentation of disclosures against
relevant accounting standards and Bangladesh Bank guidelines;
Finally, compared the amount of provision requirement as determined by
the Bangladesh Bank inspection team to the actual amount of provision
maintained.
Our response and result to key audit matters
Our results: Based on our procedure performed we have concluded that the
provision for loans and advances disclosed in the financial statements are
adequate.
See note nos. 8 and 16.a.1 to the financial statements
Description of key audit matters
Our response and result to key audit matters
Recognition of interest income on loans and advances
Recognition of interest income has significant and wide We tested the design and operating e¬ffectiveness of key controls over
influence on financial statements. Recognition and recognition and measurement of interest on loans and advances.
measurement of interest income has involvement of complex
We performed test of operating e¬ffectiveness on automated control in place
IT environments.
to measure and recognise interest income.
We identify recognition of interest income from loans and
advances as a key audit matter because this is one of the key We have also performed substantive procedure to check whether interest
performance indicators of the Bank and therefore there is an income is recognised completely and accurately.
inherent risk of fraud and error in recognition of interest by We assessed the appropriateness and presentation of disclosure against
management to meet specific targets or expectations.
relevant accounting standards and Bangladesh Bank guidelines.
Our results: Based on our procedure performed we have concluded that the
recognition of interest income on loans and advances disclosed in the financial
statements are in line with Bangladesh Bank Circular.
See note no. 26 to the financial statements
Description of key audit matters
Our response and result to key audit matters
Valuation of treasury bill and treasury bond
The classification and measurement of T-Bill and T-Bond We assessed the processes and controls put in place by the Bank to identify
require judgment and complex estimates.
and confirm the existence of treasury bills and bonds.
In the absence of a quoted price in an active market, the fair
value of T-Bills and T-Bonds is determined using complex
valuation techniques which may take into consideration direct
or indirect unobservable market data and complex pricing
models which require an elevated level of judgment.
We obtained an understanding, evaluated the design and tested the operating
effectiveness of the key controls over the treasury bills and bonds valuation
processes, including controls over market data inputs into valuation models,
model governance and valuation adjustments.
We tested a sample of the valuation models and the inputs used in those
models, using a variety of techniques, including comparing inputs to available
market data.
Finally assessed the appropriateness and presentation of disclosures against
relevant accounting standards and Bangladesh Bank guidelines.
Our results: Based on our procedure performed we concluded that the
valuation of Treasury Bills and Bonds disclosed in the financial statements are
in line with Bangladesh Bank Circular.
See note nos. 7 to the financial statements
Description of key audit matters
Our response and result to key audit matters
Measurement of Deferred Tax
We identified the measurement of deferred tax assets/ Our procedures in relation to management’s assessment about the
liabilities as a key audit matter due to the recognition of these measurement of deferred tax assets/liabilities included:
assets/liabilities involving judgement by management as to
Evaluating management’s assessment on the sufficiency of future
the likelihood of the realization of these deferred tax assets/ •
taxable profits in support of the recognition of deferred tax by comparing
liabilities, which is based on a number of factors including
management’s forecasts of future profits to historical results and
whether there will be sufficient taxable profits in future
evaluating the assumptions used in those forecasts; and
periods to support recognition.
•
Obtaining the communications between the Bank and taxation authorities
regarding tax positions.
Annual Report 2022
327
Financial Statements 2022
Description of key audit matters
Description of key audit matters
Our response and result to key audit matters
At year end the Group and Bank reported total Deferred Tax
Assets of BDT 1,075 million (2021: BDT 1,109 million) and
BDT 1,087 million (2021: BDT 1,129 million) respectively and
Deferred tax (income)/expense of BDT 217 million (2021: BDT
(809) million) and BDT 225 Million (2021: BDT (803) million)
Our results: Based on our procedure performed we concluded that the
Recognition of Deferred Tax Assets disclosed in the financial statements are
in line with International Accounting Standards (IASs) and Bangladesh Bank
guideline.
See note nos. 11.a.5 and 41 to the financial statements
Description of key audit matters
Our response and result to key audit matters
IT systems and controls
Our audit procedures have a focus on IT systems and
controls due to the pervasive nature and complexity of the IT
environment, the large volume of transactions processed in
numerous locations daily and the reliance on automated and
IT dependent manual controls.
We tested the design and operating effectiveness of the Bank’s IT access
controls over the information systems that are critical to financial reporting.
We tested IT general controls (logical access, changes management and
aspects of IT operational controls). This included testing that requests for
access to systems were appropriately reviewed and authorized.
Our areas of audit focus included user access management,
developer access to the production environment and changes We tested the Bank’s periodic review of access rights and reviewed requests of
to the IT environment. These are key to ensuring IT dependent changes to systems for appropriate approval and authorization.
and application-based controls are operating effectively.
We considered the control environment relating to various interfaces,
configurations and other application layer controls identified as key to our audit.
We performed the Tests of IT General Controls to evaluate the Application
Development and Database, Hosting Platforms and segregation of incompatible
duties relevant to application and database change management.
Our results: Based on the procedure performed, we have considered the
change managements, segregation of duties, controls, and outputs in relation
to financial accounting and reporting systems to be acceptable.
Other Matters
The financial statements of the Bank for the period ended 31 December 2021 were audited by Rahman Rahman Huq, Chartered Accountants who
expressed a unmodified opinion on those statements on 7th April 2022.
Other information
Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the
consolidated and separate financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after
the date of this auditor's report.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the
board of directors of the Bank.
Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements
and Internal Controls
Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Group and also separate
financial statements of the Bank in accordance with IFRSs as explained in note 2 and for such internal control as management determines is
necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due
to fraud or error. The Bank Company Act, 1991 and the Bangladesh Bank Regulations require the Management to ensure effective internal audit,
internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of
anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.
328
Annual Report 2022
Those charged with governance are responsible for overseeing the Group's and the Bank's financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
•
Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
•
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Bank's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group and the Bank to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and
whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Annual Report 2022
329
Financial Statements 2022
In preparing the consolidated and separate financial statements, management is responsible for assessing the Group's and the Bank's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Group and the Bank or to cease operations, or has no realistic alternative but to do so.
Report on other Legal and Regulatory Requirements
In accordance with the Companies Act 1994, the Securities and Exchange Rules 2020, the Bank Company Act 1991 (as amended up to date), the
Financial Reporting Act 2015, and the rules and regulations issued by Bangladesh Bank, we also report that:
(i)
we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our
audit and made due verification thereof;
(ii)
to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility section in forming
the above opinion on the consolidated financial statements and considering the reports of the Management to Bangladesh Bank on antifraud internal controls and instances of fraud and forgeries as stated under the Management's Responsibility for the financial statements
and internal control:
(a)
internal audit, internal control and risk management arrangements of the Group as disclosed in the financial statements appeared to
be materially adequate;
(b)
nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or
anything detrimental committed by employees of the Group and its related entities (other than matters disclosed in these financial
statements);
(iii)
financial statements for the year ended 31 December 2022 of four subsidiaries namely City Brokerage Limited, City Bank Capital Resources
Limited, CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited have been audited by S.F. Ahmed & Co. Chartered Accountants, Hoda
Vasi Chowdhury & Co, Chartered Accountants, Nasharuddin Wong & Co, Chartered Accountants and T. O. YIP & Co. Limited, Certified Public
Accountants respectively and have been properly reflected in the consolidated financial statements;
(iv)
in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our
examination of those books;
(v)
the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;
(vi)
the consolidated balance sheet and consolidated profit and loss account together with the annexed notes dealt with by the report are in
agreement with the books of account and returns;
(vii) the expenditures incurred were for the purpose of the Bank's business for the year;
(viii) the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with
prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank;
(ix)
adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery;
(x)
the information and explanations required by us have been received and found satisfactory;
(xi)
we have reviewed over 80% of the risk weighted assets of the Bank and spent over 2,130 person hours; and
(xii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank has been maintained adequately during the year.
Muhammad Farooq, FCA
Managing Partner
Enrollment Number: 0521
Howladar Yunus & Co.; Chartered Accountants
Firm’s Registration No.: [N/A]
DVC: 2304110521AS582310
330
Annual Report 2022
Financial Statements 2022
The City Bank Limited and its subsidiaries
CONSOLIDATED BALANCE SHEET
as at 31 December 2022
Note
PROPERTY AND ASSETS
Cash
In hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies)
4
4.a.2
Balance with other banks and financial institutions
In Bangladesh
Outside Bangladesh
5
Money at call on short notice
Investments
Government
Others
6
7
Loans and advances/investments
Loans, cash credits, overdrafts, etc./investments
Bills purchased and discounted
8
Fixed assets including premises, furniture and fixtures
Other assets
Non-banking assets
Total assets
10
11
12
2022
Taka
2021
Taka
8,363,152,244
7,083,119,426
23,661,679,377
32,024,831,621
23,142,429,928
30,225,549,354
29,219,561,299
3,914,475,954
33,134,037,253
-
22,015,096,557
1,144,252,355
23,159,348,912
-
52,745,133,490
13,394,671,489
66,139,804,979
48,091,329,448
12,498,728,395
60,590,057,843
353,838,489,476
2,456,138,892
356,294,628,368
10,937,381,392
15,718,605,514
662,550,998
514,911,840,125
285,573,417,550
2,743,385,036
288,316,802,586
7,402,854,102
14,436,059,612
783,763,872
424,914,436,281
16,225,000,000
83,389,925,882
11,690,000,000
55,926,728,459
86,690,515,754
2,584,084,769
80,589,303,162
162,021,883,234
331,885,786,919
49,536,770,654
481,037,483,455
54,975,876,300
2,683,162,726
72,477,566,128
152,070,395,538
282,207,000,692
42,353,110,820
392,176,839,971
12,006,067,430
10,501,678,633
1,504,388,797
530,786,630
1,165,967,585
8,165,314,751
33,874,203,826
152,844
33,874,356,670
10,672,059,940
9,167,671,143
1,504,388,797
530,786,630
2,620,296,269
8,242,246,773
32,737,449,552
146,758
32,737,596,310
514,911,840,125
424,914,436,281
LIABILITIES AND CAPITAL
Liabilities
Bond
Borrowings from other banks, financial institutions and agents
Deposits and other accounts
Current accounts and other accounts
Bills payable
Savings bank deposits
Fixed deposits
Bearer certificate of deposit
Other liabilities
Total liabilities
Capital/shareholders' equity
Paid up capital
Statutory reserve
Share premium
Dividend equalisation reserve
Other reserve
Surplus in profit and loss account
Total shareholders' equity
Non controlling interest
Total equity
Total liabilities and shareholders' equity
13
14
15
16
17.2
18
19
20
21
22
23
Annual Report 2022
331
2022
Taka
Note
OFF-BALANCE SHEET ITEMS
2021
Taka
Contingent liabilities
Acceptances and endorsements
Letters of guarantee
24.1
103,014,041,313
81,111,590,146
25,526,642,590
24,420,021,066
Irrevocable letters of credit
24.2
50,918,958,350
59,896,332,677
Bills for collection
24.3
19,923,213,242
11,405,739,898
Other contingent liabilities for ECA financing
Total
12,318,316,817
10,174,155,401
211,701,172,312
187,007,839,188
-
-
Other commitments
Documentary credits and short term trade-related transactions
7,067,645,915
41,603,304,800
Undrawn note issuance and revolving underwriting facilities
Forward assets purchased and forward deposits placed
24.4
-
-
Undrawn formal standby facilities, credit lines and other commitments
-
-
Other commitments
-
-
Total
Total off-balance sheet items including contingent liabilities
Net Assets Value (NAV) per share
7,067,645,915
41,603,304,800
218,768,818,227
228,611,143,988
28.21
27.27
49
The annexed notes 1 to 53 form an integral part of these financial statements.
Managing Director & CEO
Director
Director
Chairman
As per our report of same date.
Dhaka, 11 April 2023
332
Annual Report 2022
Auditor
Muhammad Farooq, FCA
Managing Partner
Enrollment Number: 0521
Howladar Yunus & Co.;
Chartered Accountants
Firm’s Registration No.: [N/A]
DVC: 2304110521AS582310
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2022
Note
2022
Taka
2021
Taka
Interest income/profit on investments
Interest paid/profit shared on deposits and borrowings etc.
Net interest income/profit on investments
26
27
25,833,360,887
13,225,891,143
12,607,469,744
21,053,274,613
8,726,480,778
12,326,793,835
Investment income
Commission, exchange and brokerage
Other operating income
28
29
30
3,767,626,961
7,377,540,118
1,906,293,986
13,051,461,065
25,658,930,809
2,862,413,580
5,712,723,956
2,105,410,504
10,680,548,040
23,007,341,875
31
32
33
34
35
36
37
7,233,372,280
799,824,315
76,105,462
136,723,234
588,525,842
24,545,807
7,322,107
3,951,988
2,148,864,480
2,272,802,262
13,292,037,777
12,366,893,032
6,330,980,879
632,552,825
30,625,753
108,138,815
482,065,681
20,301,212
6,446,544
3,590,527
1,893,528,557
1,414,397,582
10,922,628,375
12,084,713,500
2,941,583,756
47,277,401
2,988,861,157
9,378,031,875
1,757,890,729
749,527,841
33,327,131
2,540,745,701
9,543,967,799
4,379,411,801
217,355,085
4,596,766,886
4,781,264,989
4,859,063,030
(809,252,658)
4,049,810,372
5,494,157,427
4,781,258,903
6,086
4,781,264,989
5,494,124,449
32,978
5,494,157,427
1,334,007,490
45,077,667
245,232,869
296,613,111
1,920,931,137
2,860,327,766
3.98
508,193,330
87,552,311
297,745,555
893,491,196
4,600,633,253
4.58
Total operating income (A)
Operating expenses
Salaries and allowances
Rent, taxes, insurance, electricity, etc.
Legal expenses
Postage, stamp, telecommunication, etc.
Stationery, printing, advertisements, etc.
Chief executive's salary and fees
Directors' fees
Auditors' fees
Depreciation and repair
Other expenses
Total operating expenses (B)
Profit before provision (C = A-B)
38
39
Provision for loans and advances/investments
Provision for off-balance sheet exposures
Provision for diminution in value of investments
Other provision
Total provision (D)
Total profit before tax (E = C-D)
Provision for taxation (F)
Current tax expense
Deferred tax (income)/expense
Total provision for tax
Net profit after tax (G = E-F)
Net profit after tax attributable to:
Equity holders of the bank
Non-controlling interest
40
40.b
41
Appropriations
Statutory reserve
Start up fund
Transfer to CSR fund
Coupon/dividend on perpetual bond
General reserve
Retained surplus for the year
Earnings per share (EPS)
47
The annexed notes 1 to 53 form an integral part of these financial statements.
Managing Director & CEO
Director
Director
Chairman
As per our report of same date.
Dhaka, 11 April 2023
Auditor
Muhammad Farooq, FCA
Managing Partner
Enrollment Number: 0521
Howladar Yunus & Co.; Chartered Accountants
Firm’s Registration No.: [N/A]
DVC: 2304110521AS582310
Annual Report 2022
333
Financial Statements 2022
The City Bank Limited and its subsidiaries
334
Annual Report 2022
-
-
-
-
Transfer to start up fund
Balance as at 31 December 2022
Transfer to CSR fund
-
-
Coupon/dividend on perpetual
bonds
12,006,067,430
10,501,678,633
-
-
-
-
-
-
-
1,334,007,490
Transfer to capital reserve
Transfer to statutory reserve
-
-
Remeasurements gain/(loss)
due to actuarial valuation
Deferred tax income arise from
remeasurement
-
Adjustment for cash dividend
receipts from subsidiary
1,334,007,490
-
Dividend (Bonus Share)
Dividend (Cash)
-
-
Currency translation differences
Net profit/(loss) for the year
-
-
Surplus/(deficit) on account of
revaluation of investments
9,167,671,143
Taka
1,504,388,797
-
-
-
-
-
-
-
-
-
-
-
-
-
1,504,388,797
Taka
11,394,928
-
-
-
-
-
-
-
-
-
-
-
-
-
11,394,928
2,608,901,341
Taka
reserve
Revaluation
-
-
-
-
-
-
-
-
-
38,307,621
-
-
1,116,265,036
-
-
-
-
-
-
-
-
-
-
-
-
- (1,492,636,305)
-
38,307,621
Taka
reserve
eserve
Taka
Capital
General
Attributable to the equity holders of the Bank
Statutory reserve Share Premium
10,672,059,940
Taka
Paid up capital
Balance as at 1 January 2022
Particulars
for the year ended 31 December 2022
4,781,258,903
(23,238,261)
4,781,258,903
(23,238,261)
- (1,492,636,305)
8,242,246,773 32,737,449,552
Taka
Total
110,498,050
530,786,630
-
-
-
-
-
-
(245,232,869)
(45,077,667)
(296,613,111)
-
183,237,615
(488,633,640)
-
110,498,050
-
8,165,314,751 33,874,203,826
(245,232,869)
(45,077,667)
(296,613,111)
(38,307,621)
183,237,615
(488,633,640)
- (1,334,007,490)
-
- (1,334,007,490)
- (1,346,808,441) (1,346,808,441)
-
-
-
530,786,630
Taka
account
reserve
Taka
profit and loss
Surplus in
equalisation
Dividend
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
The City Bank Limited and its subsidiaries
Non
Taka
Total equity
(23,238,261)
4,781,264,989
(245,232,869)
(45,077,667)
(296,613,111)
-
183,237,615
(488,633,640)
-
110,498,050
-
152,844 33,874,356,670
-
-
-
-
-
-
-
-
- (1,346,808,441)
6,086
-
- (1,492,636,305)
146,758 32,737,596,310
Taka
interest
controlling
-
Changes in revaluation reserve for alignment with
parent company's policy
Net profit/(loss) for the year
Dividend (Cash)
-
-
-
-
-
-
Taka
General
reserve
Taka
Revaluation
reserve
Taka
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (214,917,023)
Taka
Total
5,494,124,449
98,213,768
(4,081,253)
-
5,494,124,449
98,213,768
(4,081,253)
(214,917,023)
5,809,239,365 29,502,972,507
Taka
Surplus in
profit and loss
account
-
-
-
-
-
(87,552,311)
(297,745,555)
42,179,559
-
-
8,242,246,773 32,737,449,552
(87,552,311)
(297,745,555)
42,179,559
(508,193,330)
(508,193,330)
- (1,795,744,589) (1,795,744,589)
-
-
-
-
9,167,671,143 1,504,388,797 11,394,928 2,608,901,341 530,786,630
-
-
-
508,193,330
The annexed notes 1 to 53 form an integral part of these financial statements.
10,672,059,940
-
Transfer to start up fund
Balance as at 31 December 2021
-
Coupon/dividend on perpetual bonds
-
Remeasurements gain/(loss) due to actuarial
valuation
Transfer to statutory reserve
508,193,330
-
Dividend (Bonus Share)
-
Currency translation differences
Taka
Share Premium
Dividend
equalisation
reserve
Attributable to the equity holders of the Bank
8,659,477,813 1,504,388,797 11,394,928 2,823,818,364 530,786,630
Taka
Taka
10,163,866,610
Statutory
reserve
Paid up capital
Surplus/(deficit) on account of revaluation of
investments
Balance as at 1 January 2021
Particulars
for the year ended 31 December 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
The City Bank Limited and its subsidiaries
Taka
Total equity
5,494,157,427
98,213,768
(4,081,253)
(214,917,023)
(87,552,311)
(297,745,555)
42,179,559
-
-
146,758 32,737,596,310
-
-
-
-
-
- (1,795,744,589)
32,978
-
-
-
113,780 29,503,086,287
Taka
Non
controlling
interest
Financial Statements 2022
Annual Report 2022
335
The City Bank Limited and its subsidiaries
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2022
Note
A)
Cash flows from operating activities
Interest/investment income receipts in cash
Interest/profit paid on deposits
Dividend receipts
Fees and commission receipts in cash
Recoveries of loans previously written-off
Cash payments to employees
Cash payments to suppliers
Income taxes paid
Receipts from other operating activities
Payments for other operating activities
Cash generated from operating activities before changes in
operating assets and liabilities (i)
Increase/decrease in operating assets and liabilities
Loans and advances to customers
Other assets
Deposits from other banks/borrowings
Deposits from customers
Other liabilities
Cash generated from operating assets and liabilities (ii)
Net cash flow from operating activities (i+ii)
B)
16.a.1
43
44
45
46
Cash flows from investing activities
Net payment for sale/(purchase) of shares
Net payment for sale/(purchase) of securities
Net payment for sale/(purchase) of fixed assets
Net cash used in investing activities
C)
Cash flows from financing activities
Issuance of perpetual bonds
Issuance/(redemption) of subordinated bonds
Dividends paid
Coupon/dividend paid on perpetual bonds
Net cash from financing activities
D)
Net increase in cash and cash equivalents (A+B+C)
E)
Effects of exchange rate changes on cash and cash equivalents
F)
Cash and cash equivalents at beginning of the year
G)
Cash and cash equivalents at end of the year (D+E+F)
Cash and cash equivalents at end of the year consists of:
Cash in hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies)
Balance with other banks and financial institutions
Money at call on short notice
Government securities
42
Net operating cash flow per share (NOCFPS)
48
The annexed notes 1 to 53 form an integral part of these financial statements.
336
Annual Report 2022
2022
Taka
2021
Taka
24,977,543,851
(12,818,280,217)
234,698,182
4,054,981,990
535,197,471
(7,749,524,657)
(271,004,145)
(4,105,846,701)
5,266,853,232
(4,361,637,015)
20,655,187,597
(9,175,623,187)
224,218,321
4,255,746,621
880,049,586
(5,749,022,559)
(191,680,550)
(2,185,741,391)
4,601,336,910
(3,961,886,408)
5,762,981,991
9,352,584,940
(67,977,825,782)
(1,968,278,583)
27,452,315,270
49,689,668,381
1,028,875,764
8,224,755,050
13,987,737,041
(19,049,222,530)
(894,077,822)
(747,378,298)
24,655,682,929
850,872,137
4,815,876,416
14,168,461,356
(2,369,605,277)
(11,505,326,757)
(1,415,975,186)
(15,290,907,220)
(2,473,631,287)
(5,024,721,325)
(1,098,357,996)
(8,596,710,608)
4,535,000,000
(1,346,808,441)
(296,613,111)
2,891,578,448
1,600,000,000
(1,510,000,000)
(1,795,744,589)
(300,190,000)
(2,005,934,589)
1,588,408,269
3,565,816,159
3,353,013,743
1,460,747,506
67,750,269,444
62,723,705,779
72,691,691,456
67,750,269,444
8,363,152,244
23,661,679,377
7,083,119,426
23,142,429,928
33,134,037,253
7,532,822,582
72,691,691,456
23,159,348,912
14,365,371,178
67,750,269,444
11.65
11.80
Financial Statements 2022
The City Bank Limited
BALANCE SHEET
as at 31 December 2022
PROPERTY AND ASSETS
Cash
In hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies)
Note
2022
Taka
2021
Taka
4.a.1
8,361,643,776
7,081,963,793
4.a.2
23,661,679,377
32,023,323,153
23,142,429,928
30,224,393,721
28,911,665,052
3,813,382,638
32,725,047,690
-
21,713,194,953
1,080,856,199
22,794,051,152
-
52,745,133,490
8,359,816,029
61,104,949,519
48,091,329,448
6,829,061,460
54,920,390,908
352,785,943,537
1,987,742,717
354,773,686,254
9,749,161,523
15,808,243,910
662,550,998
506,846,963,047
284,109,052,056
2,270,626,420
286,379,678,476
6,464,783,605
15,335,299,156
783,763,872
416,902,360,890
16,225,000,000
82,390,242,355
11,690,000,000
54,895,161,717
86,013,626,245
2,584,084,769
80,589,303,162
162,703,370,198
331,890,384,374
43,496,438,724
474,002,065,453
53,813,032,058
2,683,162,726
72,477,566,128
153,089,871,504
282,063,632,416
37,029,122,486
385,677,916,619
12,006,067,430
10,501,678,633
1,504,388,797
530,786,630
1,014,361,820
7,287,614,284
32,844,897,594
506,846,963,047
10,672,059,940
9,167,671,143
1,504,388,797
530,786,630
1,662,547,071
7,686,990,690
31,224,444,271
416,902,360,890
Balance with other banks and financial institutions
In Bangladesh
Outside Bangladesh
5.a
Money at call on short notice
Investments
Government
Others
6
7.a
Loans and advances/investments
Loans, cash credits, overdrafts, etc./investments
Bills purchased and discounted
8.a
Fixed assets including premises, furniture and fixtures
Other assets
Non-banking assets
Total assets
10.a
11.a
12
9
LIABILITIES AND CAPITAL
Liabilities
Bond
Borrowings from other banks, financial institutions and agents
Deposits and other accounts
Current accounts and other accounts
Bills payable
Savings bank deposits
Fixed deposits
Bearer certificate of deposit
Other liabilities
Total liabilities
Capital/shareholders' equity
Paid up capital
Statutory reserve
Share premium
Dividend equalisation reserve
Other reserve
Surplus in profit and loss account
Total shareholders' equity
Total liabilities and shareholders' equity
13
14.a
15.a
16.a
17.2
18
19
20
21.a
22.a
Annual Report 2022
337
2022
Taka
Note
2021
Taka
OFF-BALANCE SHEET ITEMS
Contingent liabilities
Acceptances and endorsements
Letters of guarantee
24.1
Irrevocable letters of credit
Bills for collection
103,014,041,313
81,111,590,146
25,526,642,590
24,420,021,066
24.2
50,918,958,350
59,896,332,677
24.3.a
19,402,381,269
10,859,176,989
Other contingent liabilities for ECA financing
Total
12,318,316,817
10,174,155,401
211,180,340,339
186,461,276,279
-
-
Other commitments
Documentary credits and short term trade-related transactions
7,067,645,915
41,603,304,800
Undrawn note issuance and revolving underwriting facilities
Forward assets purchased and forward deposits placed
24.4
-
-
Undrawn formal standby facilities, credit lines and other commitments
-
-
Other commitments
-
-
Total
Total off-balance sheet items including contingent liabilities
Net Assets Value (NAV) per share
7,067,645,915
41,603,304,800
218,247,986,254
228,064,581,079
27.36
26.01
49.a
The annexed notes 1 to 53 form an integral part of these financial statements.
Managing Director & CEO
Director
Director
Chairman
As per our report of same date.
Dhaka, 11 April 2023
338
Annual Report 2022
Auditor
Muhammad Farooq, FCA
Managing Partner
Enrollment Number: 0521
Howladar Yunus & Co.;
Chartered Accountants
Firm’s Registration No.: [N/A]
DVC: 2304110521AS582310
PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2022
2022
Taka
Note
Interest income/profit on investments
Interest paid/profit shared on deposits and borrowings etc.
Net interest income/profit on investments
Investment income
Commission, exchange and brokerage
Other operating income
Total operating income (A)
Salaries and allowances
Rent, taxes, insurance, electricity, etc.
Legal expenses
Postage, stamp, telecommunication, etc.
Stationery, printing, advertisements, etc.
Chief executive's salary and fees
Directors' fees
Auditors' fees
Depreciation and repair of bank's assets
Other expenses
Total operating expenses (B)
Profit before provision (C = A-B)
Provision for loans and advances/investments
Provision for off-balance sheet exposures
Provision for diminution in value of investments
Other provision
Total provision (D)
Total profit before taxes (E = C-D)
Provision for taxation (F)
Current tax expense
Deferred tax (income)/expense
Total provision for tax
Net profit after tax (G = E-F)
26.a
27.a
28.a
29.a
30.a
31
32.a
33.a
34.a
35.a
36
37.a
38.a
39.a
40.a
40.c
41.a
25,556,953,427
13,197,502,626
12,359,450,801
3,605,367,405
6,728,818,966
1,894,729,305
12,228,915,676
24,588,366,477
6,977,238,560
717,433,874
72,067,327
128,451,313
548,404,666
24,545,807
2,729,400
3,231,250
2,035,654,741
2,251,496,216
12,761,253,154
11,827,113,323
2,942,526,639
122,273
2,942,648,912
8,884,464,411
20,725,354,751
8,677,554,766
12,047,799,985
2,578,967,388
4,674,253,919
2,102,242,902
9,355,464,209
21,403,264,194
6,073,630,989
526,581,475
28,839,747
99,990,203
446,014,582
20,301,212
2,440,000
2,423,200
1,806,320,600
1,396,175,258
10,402,717,266
11,000,546,928
1,796,165,414
749,527,841
2,545,693,255
8,454,853,673
4,152,175,971
224,521,753
4,376,697,724
4,507,766,687
4,514,834,343
(803,040,537)
3,711,793,806
4,743,059,867
1,334,007,490
45,077,667
245,232,869
296,613,111
1,920,931,137
2,586,835,550
3.75
508,193,330
87,552,311
297,745,555
893,491,196
3,849,568,671
3.95
Appropriations
Statutory reserve
Start up fund
Transfer to CSR fund
Coupon/dividend on perpetual bond
General reserve
Retained surplus for the year
Earnings per share (EPS)
2021
Taka
47.a
The annexed notes 1 to 53 form an integral part of these financial statements.
Managing Director & CEO
Director
Director
Chairman
As per our report of same date.
Dhaka, 11 April 2023
Auditor
Muhammad Farooq, FCA
Managing Partner
Enrollment Number: 0521
Howladar Yunus & Co.;
Chartered Accountants
Firm’s Registration No.: [N/A]
DVC: 2304110521AS582310
Annual Report 2022
339
Financial Statements 2022
The City Bank Limited
340
Annual Report 2022
-
Dividend (Cash)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (648,185,251)
530,786,630
-
-
-
-
-
-
-
-
-
(45,077,667)
(296,613,111)
183,237,615
(488,633,640)
(1,334,007,490)
(1,334,007,490)
(1,346,808,441)
4,507,766,687
-
7,686,990,690
Taka
Surplus in profit
and loss account
7,287,614,284
-
-
-
-
-
-
-
-
-
12,006,067,430 10,501,678,633 1,504,388,797 11,394,928 1,002,966,892
Transfer to start up fund
-
-
-
1,334,007,490
-
-
-
-
530,786,630
Taka
Dividend
equalisation
reserve
Balance as at 31 December 2022
-
Coupon/dividend on perpetual bonds
Taka
Revaluation
reserve
(245,232,869)
-
Deferred tax income arise from remeasurement
Taka
General
reserve
Transfer to CSR fund
-
Remeasurements gain/(loss) due to actuarial
valuation
-
Transfer to statutory reserve
1,334,007,490
-
Net profit for the year
Dividend (Bonus Share)
-
Taka
Share premium
9,167,671,143 1,504,388,797 11,394,928 1,651,152,143
Taka
Taka
10,672,059,940
Statutory
reserve
Paid-up capital
Surplus/(deficit) on account of revaluation of
investments
Balance as at 1 January 2022
Particulars
for the year ended 31 December 2022
STATEMENT OF CHANGES IN EQUITY
The City Bank Limited
32,844,897,594
(245,232,869)
(45,077,667)
(296,613,111)
183,237,615
(488,633,640)
-
-
(1,346,808,441)
4,507,766,687
(648,185,251)
31,224,444,271
Taka
Total equity
-
Dividend (Cash)
-
Coupon/dividend on perpetual bonds
Transfer to start up fund
-
-
-
-
Taka
General
reserve
Taka
Revaluation
reserve
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (198,082,328)
9,167,671,143 1,504,388,797 11,394,928 1,651,152,143
-
-
-
508,193,330
The annexed notes 1 to 53 form an integral part of these financial statements.
10,672,059,940
-
Remeasurements gain/(loss) due to actuarial
valuation
Balance as at 31 December 2021
-
Transfer to statutory reserve
508,193,330
-
Net profit for the year
Dividend (Bonus Share)
-
Taka
Share premium
8,659,477,813 1,504,388,797 11,394,928 1,849,234,471
Taka
Taka
10,163,866,610
Statutory
reserve
Paid-up capital
Surplus/(deficit) on account of revaluation of
investments
Balance as at 1 January 2021
Particulars
for the year ended 31 December 2021
STATEMENT OF CHANGES IN EQUITY
The City Bank Limited
530,786,630
-
-
-
-
-
-
-
-
530,786,630
Taka
Dividend
equalisation
reserve
7,686,990,690
(87,552,311)
(297,745,555)
42,179,559
(508,193,330)
(508,193,330)
(1,795,744,589)
4,743,059,867
-
6,099,180,379
Taka
Surplus in profit
and loss account
31,224,444,271
(87,552,311)
(297,745,555)
42,179,559
-
-
(1,795,744,589)
4,743,059,867
(198,082,328)
28,818,329,628
Taka
Total equity
Financial Statements 2022
Annual Report 2022
341
The City Bank Limited
CASH FLOW STATEMENT
for the year ended 31 December 2022
Note
A)
Cash flows from operating activities
Interest/investment income receipts in cash
Interest/profit paid on deposits
Dividend receipts
Fees and commission receipts in cash
Recoveries of loans previously written off
Cash payments to employees
Cash payments to suppliers
Income taxes paid
Receipts from other operating activities
Payments for other operating activities
Cash generated from operating activities before changes in
operating assets and liabilities (i)
Increase/decrease in operating assets and liabilities
Loans and advances to customers
Other assets
Deposits from other banks/borrowings
Deposits from customers
Other liabilities
Cash generated from operating assets and liabilities (ii)
Net cash from operating activities (i+ii)
B)
16.a.1
11.a.4
43.a
44.a
45.a
46.a
Cash flows from investing activities
Net payment for sale/(purchase) of shares
Net payment for sale/(purchase) of securities
Net payment for sale/(purchase) of fixed assets
Investment in subsidiaries
Net cash (used in)/generated from investing activities
2022
Taka
2021
Taka
24,696,052,032
(12,792,965,793)
212,252,494
3,560,229,072
535,197,471
(7,484,586,766)
(259,982,141)
(3,807,605,135)
5,119,222,835
(4,128,599,610)
20,327,180,494
(9,133,700,865)
97,100,699
3,355,820,899
880,049,586
(5,491,631,428)
(177,302,026)
(1,956,252,307)
4,443,517,881
(3,759,928,342)
5,649,214,459
8,584,854,591
(68,394,007,778)
(1,642,379,795)
27,484,198,486
49,837,634,110
755,135,385
8,040,580,408
13,689,794,867
(18,178,157,915)
(51,242,078)
(818,798,161)
24,227,474,698
78,336,700
5,257,613,244
13,842,467,835
(2,159,965,697)
(11,505,326,757)
(1,187,293,381)
(14,852,585,835)
(2,495,094,058)
(5,024,721,325)
(799,610,438)
(8,319,425,821)
4,535,000,000
(1,346,808,441)
(296,613,111)
2,891,578,448
1,600,000,000
(1,510,000,000)
(1,795,744,589)
(300,190,000)
(2,005,934,589)
C)
Cash flows from financing activities
Issuance of perpetual bonds
Issuance/(redemption) of subordinated bonds
Dividends paid
Coupon/dividend paid on perpetual bonds
Net cash used in financing activities
D)
Net increase in cash and cash equivalents (A+B+C)
1,728,787,480
3,517,107,425
E)
Effects of exchange rate changes on cash and cash equivalents
3,168,589,894
1,318,433,020
F)
Cash and cash equivalents at beginning of the year
67,383,816,051
62,548,275,606
G)
Cash and cash equivalents at end of the year (D+E+F)
72,281,193,425
67,383,816,051
8,361,643,776
23,661,679,377
7,081,963,793
23,142,429,928
32,725,047,690
7,532,822,582
72,281,193,425
22,794,051,152
14,365,371,178
67,383,816,051
11.40
11.53
Cash and cash equivalents at end of the year consists of:
Cash in hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies)
Balance with other banks and financial institutions
Money at call on short notice
Government securities
42.a
Net operating cash flow per share (NOCFPS)
48.a
The annexed notes 1 to 53 form an integral part of these financial statements.
342
Annual Report 2022
Financial Statements 2022
The City Bank Limited and its subsidiaries
NOTES TO THE FINANCIAL STATEMENTS
as at and for the year ended 31 December 2022
1.
Reporting entity - The Bank and its activities
1.1
Legal Status and nature of the entity
The City Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under The Companies Act 1913. It
commenced its banking business from 23 March 1983 under the license issued by Bangladesh Bank. The Bank has 122 branches
(2021:121), 11 SME/Agri branches (2021: 11), 12 sub branches (2021: 11) and 690 agent banking outlets (2021: 1,183) across
Bangladesh as at 31 December 2022. The Bank had no overseas branches as at 31 December 2022. Out of the above 133 branches
and 12 sub branches, 1 branch is designated as Islamic Banking Branch complying with the rules of Islamic Shariah, the modus operandi
of which is substantially different from other branches run on conventional basis. It has 351 ATMs (2021: 338) and 64 CDMs (2021:
64) as at 31 December 2022. The Bank was listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a
publicly traded company on 03 February 1987 and 27 December 1995. It is operating as City Bank Group with it's four subsidiaries.
The registered office of the Bank is located at 136, Bir Uttam Mir Shawkat Sarak (Gulshan Avenue), Gulshan-2, Dhaka-1212.
The consolidated financial statements of the Bank as at and for the year ended 31 December 2022 comprise the Bank and its
subsidiaries (collectively the 'Group' and individually 'Group entities').
1.2
Principal activities of the bank
The principal activities of the Bank are to provide wide array of financial products (loans and deposits) and services that includes all
kinds of conventional and Islamic banking services to its customers. It offers commercial banking, consumer banking, trade services,
cash management, treasury, SME, retail, custodial and clearing services to its customers. These activities are conducted through its
branches, SME/Agri branches, sub-branches, islamic windows, agent banking outlets and vibrant alternative delivery channels (ATM
booths, internet banking) in Bangladesh. City Touch Digital Banking Service is the bank’s flagship product to provide internet based
banking solutions. City Touch offers online banking facilities like - FDR/Monthly deposit accounts opening, quick loan facilities to
customers, fund transfer, utility bills payment, buying air tickets, paying bills of mobile phones, credit cards, and insurance premiums
and then tracking of accounts and even shopping from over 100 retailers. City Touch is integrated with bKash payment system as
well. Through bKash payment system, the Bank is offering nano loan facilities to customers. The Bank also provides off-shore banking
services through its Off-Shore Banking Units (OBU) and islami banking services through its Islamic Bank branch.
1.3
Offshore Banking
Offshore Banking Unit (OBU) is a separate business unit of the Bank, operates its business through a separate counter as governed
under the rules and guidelines vide Bangladesh Bank's letter reference no. BRPD(P-3)744(101)/2010-4129 dated 10 November 2009
and a Policy for Offshore Banking Operation issued by Bangladesh Bank through BRPD circular no. 02, dated 25 February 2019 and
BRPD circular letter no. 09, dated 27 May 2019. It gives loans (on and off-balance sheet exposures) and takes deposits in freely
convertible foreign currencies to and from person/institution not resident in Bangladesh and Type-A (wholly foreign owned) units in
EPZs in Bangladesh. It also gives long term loans to industrial units outside EPZs and Type-B and Type-C industrial units within the
EPZs subject to compliance by the industrial units with the guidelines of Bangladesh Investment Development Authority (BIDA) and
Bangladesh Bank. Besides, this unit provides bill discounting/financing facilities accepted by Authorised Dealer (AD) in Bangladesh
against usance LCs in accordance with Bangladesh Bank (BB) guidelines. Separate financial statements of Off-Shore Banking Units are
shown in Annexures J(1) and J(2).
1.4
Islamic Banking
The Bank obtained permission for Islamic Banking Branch from Bangladesh Bank vide letter no. BL/DA/6852/2003 dated 16 July
2003. Through the Islamic Banking Branch, the Bank extends all types of Islamic Shariah compliant finance like lease, hire purchase
shirkatul melk (HPSM), bai muazzal, household scheme etc. and different types of deposits like mudaraba/manarah savings deposits,
mudaraba/manarah term deposits, al-wadeeah current deposits, monthly/quarterly profit paying scheme etc. Separate financial
statements of Islamic Banking Branch are shown in Annexures I(1) and I(2).
Annual Report 2022
343
1.5
Agent Banking
The Bank has started agent banking operation in 2017 with a view to reach unbanked population particularly in the geographically
dispersed area and offer banking services to potential customers who are currently out of traditional banking periphery. City Bank has
launched this banking service with 20 outlets in 2017, which is now 690 across the country with thousands of new customers. This
service includes offering all types of deposit accounts, micro credit facilities and other banking transactions including bill payments,
inward foreign remittance payment, fund transfer etc.
1.6
Custodian Service
The Bank obtained permission to work as a security custodian from Bangladesh Securities and Exchange Commission vide its
certificate no. SC-09/2009, dated 17 June 2009 under the Securities and Exchange Commission (Securities Custodian Service) Rules
2003. Financial performance of Security Custodial Services have been separately reported in Annexure K along with Bank’s audited
financial statements in compliance with the requirement u/s 10(2) of Security Custodial Services Rules 2003. The due certificate from
external auditors has been obtained on internal control and financial statements of security custodial operations of the Bank.
1.7
Subsidiaries of the Bank
The Bank has four subsidiaries. All of them have been in operations on the reporting date. These are City Brokerage Limited, City Bank
Capital Resources Limited, CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited. Details of the subsidiaries have been presented
in note no. 1.7.1 to 1.7.4.
1.7.1
City Brokerage Limited
City Brokerage Limited ('the Company') was incorporated in Bangladesh as a private limited company on 31 March 2010 vide registration
no. C-83616/10 under the Companies Act 1994. The legal status of the Company has been converted into public limited company from
private limited company in June 2012 in compliance with Bangladesh Securities and Exchange Commission Rules 2000. Previously the
Bank launched its brokerage division on 4 August 2009 which was subsequently separated from the Bank on 15 November 2010. On
31 December 2022 the Bank held 99.9963% shares of the company.
The financial statements, audited by S.F. Ahmed & Co, Chartered Accountants, have been enclosed in Appendix A.
1.7.2
City Bank Capital Resources Limited (CBCRL)
City Bank Capital Resources Limited ('the Company') was incorporated in Bangladesh as a private limited company on 17 August 2009
vide registration no. C-79186/09 under the Companies Act, 1994. The registered office of CBCRL is at 90/1, City Center (13th Floor),
Motijheel Commercial Area, Dhaka-1000. CBCRL delivers a whole range of investment banking services including merchant banking
activities such as issue management, underwriting, portfolio management and corporate advisory. On 31 December 2022 the Bank
held 99.9933% shares of CBCRL.
The financial statements, audited by Hoda Vasi Chowdhury & Co., Chartered Accountants, have been enclosed in Appendix B.
1.7.3
CBL Money Transfer Sdn. Bhd. (CMTS)
CBL Money Transfer Sdn. Bhd. ('the Company') is a private limited company by shares incorporated under the laws of Malaysia and
registered with the Companies Commission of Malaysia with Registration No. 769212M carrying on money services business under
the Money Services Business Act 2011 under a Class B License No. 00127 from the Bank Negara Malaysia. CMTS is principally engaged
as inbound and outbound remittance service provider.
The Bank entered into an agreement on 4 April 2013 to purchase 75% of ordinary shares of CMTS with an agreement to acquire 100%
shares of CMTS ultimately and the company became and started as subsidiary of the Bank since 5 August 2013. On 31 December 2022
the Bank held 100% shares of CMTS.
The financial statements of CMTS, audited by Nasharuddin Wong & Co, Chartered Accountants, have been enclosed in Appendix C.
1.7.4
City Hong Kong Limited
City Hong Kong Limited ('the Company') is incorporated and domiciled in Hong Kong and has its registered office and principal place of business
at Units 904 & 906, 9th Floor, Austin Tower, Nos. 22-26 Austin Avenue, Tsimshatsui, Kowloon, Hong Kong. City Hong Kong Limited is a fully
owned (100% shares) subsidiary of The City Bank Limited established at the end of 2019 to facilitate international trade business through
advising letter of credits, handling documentary collections and bill financing (discounting) against letters of credit.
344
Annual Report 2022
2.
Basis of preparation of financial statements
The separate financial statements of the Bank as at and for the year ended 31 December 2022 comprise those of Domestic Banking
Unit (Main operations) and Offshore Banking Unit (OBU), and the consolidated financial statements of the group comprise those of 'the
Bank' (parent company) and its subsidiaries. There were no significant changes in the nature of principal business activities of the Bank
and the subsidiaries during the financial year.
2.1
Statement of compliance
The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) was formed in 2017
and has since then adopted International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) as the
applicable Financial Reporting Standards for public interest entities such as banks with effect from 2 November 2020.
Accordingly, the financial statements of the Bank are prepared in accordance with IFRSs (including IASs) and the requirements of the
Bank Company Act, 1991 (amendment up to 2018), the rules and regulations issued by Bangladesh Bank, the Companies Act 1994,
The Securities and Exchange Ordinance 1969, Bangladesh Securities and Exchange Commission Act 1993, Bangladesh Securities and
Exchange Commission (Public Issues) Rules 2020, Income Tax Ordinance and Rules 1984, The Value Added Tax and Supplementary Duty
Act 2012, The Value Added Tax and Supplementary Duty Rules 2016, Financial Reporting Act, 2015, Dhaka Stock Exchange Ltd. (DSE),
Chittagong Stock Exchange Ltd. (CSE) and Central Depository Bangladesh Ltd. (CDBL) rules and regulations. In case any requirement of
the Bank Company Act, 1991 (amendment up to 2018), provisions, circulars and guidelines issued by Bangladesh Bank differ with those
of IFRSs (including IASs), the requirements of the Bank Company Act, 1991 (amendment up to 2018), provisions, circulars and guidelines
issued by Bangladesh Bank shall prevail. Material departures from the requirements of IFRS are mentioned in i to xx:
In addition to foregoing directives and standards, the operation of Islamic Banking branches is accounted for in accordance with
Financial Accounting Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions, Bahrain, and
BRPD circular no. 15, dated 09 November 2009. A separate balance sheet, profit and loss account and a statement of profit paid on
deposits are shown in Annexure-I(1) and I(2) and the figures appearing in the annexure have been incorporated in the related heads of
these financial statements as recommended by the Central Shariah Board for Islamic Banks in Bangladesh.
i) Presentation of financial statements
IFRS: As per IAS 1, a complete set of financial statements comprises a statement of financial position, a statement of profit and
loss and other comprehensive income, a statement of changes in equity, a statement of cash flows, notes comprising a summary
of significant accounting policies and other explanatory information and comparative information. IAS 1 has also stated the entity to
disclose assets and liabilities under current and non-current classification separately in its statement of financial position.
Bangladesh Bank: The presentation of these financial statements in prescribed format (i.e. balance sheet, profit and loss account, cash
flow statement, statement of changes in equity, liquidity statement) and certain disclosures therein are guided by the First Schedule
(section-38) of the Bank Companies Act, 1991 (amended up to 2018) and BRPD circular no. 14 dated 25 June 2003 and subsequent
guidelines of Bangladesh Bank. In the prescribed format there is no option to present assets and liabilities under current and noncurrent classification.
ii) Investment in shares, mutual fund and other securities
IFRS: As per requirements of IFRS 9, classification and measurement of investment in shares and securities will depend on how these
are managed (the entity’s business model) and their contractual cash flow characteristics. Based on these factors it would generally
fall either under “at fair value through profit or loss account” or under “at fair value through other comprehensive income” where
any change in the fair value (as measured in accordance with IFRS 13) at the year-end is taken to profit and loss account or other
comprehensive income respectively.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted and unquoted shares are revalued on the
basis of year-end market price and Net Assets Value (NAV) of last audited balance sheet respectively. As per instruction of DOS circular
letter no. 3 dated 12 March 2015, investment in mutual fund (close-end) is revalued at lower of cost and higher of market value and
85% of NAV and another DOS circular letter no. 10 dated 28 June 2015, investment in mutual fund (open-end) is revalued at lower of
cost and higher of market value and 95% of NAV. As such, provision is made for any loss arising from diminution in value of investments
(portfolio basis); otherwise investments are recognised at costs.
Annual Report 2022
345
Financial Statements 2022
The financial statements of City Hong Kong Ltd, audited by T. O. Yip & Co Limited, Certified Public Accountants, have been enclosed in
Appendix D.
iii) Revaluation gain/loss on government securities
IFRS: Government securities refer primarily various debt instruments which include both bonds and bills. As per requirements of IFRS
9 Financial Instruments, bonds can be categorised as “Amortised Cost (AC)” or “Fair Value Through Profit or Loss (FVTPL)” or “Fair Value
through Other Comprehensive Income (FVOCI)”. Bonds designated as Amortised Cost are measured at amortised cost method and
interest income is recognised through profit and loss account. Any changes in fair value of bonds designated as FVTPL is recognised
in profit and loss account. Any changes in fair value of bonds designated as FVOCI is recognised in other reserve as a part of equity.
As per requirements of IFRS 9, bills can be categorised either as “Fair Value Through Profit or Loss (FVTPL)” or “Fair Value through Other
Comprehensive Income (FVOCI)”. Any change in fair value of bills is recognised in profit and loss or other reserve as a part of equity respectively.
Bangladesh Bank: According to DOS circular no. 5 dated 26 May 2008 and subsequent clarification in DOS circular no. 5 dated 28
January 2008, Government securities/bills are classified into Held for Trading (HFT) and Held to Maturity (HTM), HFT securities are
revalued on the basis of mark to market and any gains on revaluation of securities which have not matured as at the balance sheet
date are recognised in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at
the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortisation of discount is
recognised in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortised and gains
or losses on amortisation are recognised in other reserve as a part of equity.
iv) Repo and reverse repo transactions
IFRS: As per IFRS 9 when an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or
a similar asset) at a fixed price on a future date (repo), the arrangement is treated as a loan and the underlying asset continues to be
recognised at amortised cost in the entity’s financial statements. The difference between selling price and repurchase price will be
treated as interest expense. The same rule applies to the opposite side of the transaction (reverse repo).
Bangladesh Bank: As per Department of Off-Site Supervision (DOS) Circular letter no. 06 dated 15 July 2010 and subsequent clarification
in DOS circular no. 02 dated 23 January 2013, when a bank sells a financial asset and simultaneously enters into an agreement to
repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a
normal sales transaction and the financial asset is derecognised in the seller’s book and recognised in the buyer’s book.
However, as per DMD circular letter no. 7 dated 29 July 2012, non primary dealer banks are eligible to participate in the Assured
Liquidity Support (ALS) programme, whereby such banks may enter collateralised repo arrangements with Bangladesh Bank. Here the
selling bank accounts for the arrangement as a loan, thereby continuing to recognize the asset.
v) Provision on loans and advances
IFRS: As per IFRS 9 an entity shall recognise an impairment allowance on loans and advances based on expected credit losses. At each
reporting date, an entity shall measure the impairment allowance for loans and advances at an amount equal to the lifetime expected
credit losses if the credit risk on these loans and advances has increased significantly since initial recognition whether assessed on
an individual or collective basis considering all reasonable information, including that which is forward-looking. For those loans and
advances for which the credit risk has not increased significantly since initial recognition, at each reporting date, an entity shall measure
the impairment allowance at an amount equal to 12 month expected credit losses that may result from default events on such loans
and advances that are possible within 12 months after reporting date.
Bangladesh Bank: As per BRPD circular no. 53 (22 December 2022), BRPD circular no. 51 (18 December 2022), BRPD circular no.
14 (22 June 2022), BRPD circular no. 53 (30 December 2021), BRPD circular no. 52 (29 December 2021), BRPD circular no. 51 (29
December 2021), BRPD circular no. 50 (14 December 2021), BRPD circular no. 45 (04 October 2021),BRPD circular no. 19 (26 August
2021), BRPD circular no. 05 (24 March 2021), BRPD circular no. 13 (27 June 2021), BRPD circular no. 03 (31 January 2021), BRPD
circular no. 56 (10 December 2020), BRPD circular no. 52 (20 October 2020), BRPD circular no.16 (21 July 2020), BRPD circular no. 3
(23 April 2019), BRPD circular no. 1 (20 February 2018), BRPD circular no.15 (27 September 2017), BRPD circular no. 16 (18 November
2014), BRPD circular no. 05 (29 May 2013), BRPD circular no. 19 (27 December 2012) and BRPD circular no.14 (23 September 2012) a
general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless
of objective evidence of impairment. And specific provision (other than short -term agricultural and micro-credits) for sub-standard
loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on the
duration of overdue. Moreover, a provision for Short-Term Agricultural and Micro-Credits has to be provided for 'sub-standard' and
'doubtful' loans at the rate of 5%, 20% and a 100% provision for the 'bad/Loss' loans. Such provision policies are not specifically in line
with those prescribed by IFRS 9.
vi) Recognition of interest in suspense
IFRS: Loans and advances to customers are generally classified at amortised cost as per IFRS 9 and interest income is recognised by
using the effective interest rate method to the gross carrying amount over the term of the loan. Once a loan subsequently becomes
credit-impaired, the entity shall apply the effective interest rate to the amortised cost of these loans and advances.
346
Annual Report 2022
vii) Other comprehensive income
IFRS: As per IAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of Other Comprehensive
Income are to be included in a Single Comprehensive Income (SCI) Statement.
Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which are required to be followed by all banks. The
templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other
Comprehensive Income allowed to be included in a Single Comprehensive Income (SCI) Statement. As such the Bank does not prepare the
other comprehensive income statement. However, elements of OCI, if any, are shown in the statements of changes in equity.
viii) Financial instruments – presentation and disclosure
In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently from those
prescribed in IFRS 9. As such full disclosure and presentation requirements of IFRS 7 and IAS 32 cannot be made in the financial
statements.
ix) Financial guarantees
IFRS: As per IFRS 9, financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for
a loss it incurs because a specified debtors fails to make payment when due in accordance with the original or modified terms of a debt
instrument. Financial guarantee liabilities are recognised initially at their fair value plus transaction costs that are directly attributable
to the issue of the financial liabilities. The financial guarantee liability is subsequently measured at the higher of the amount of loss
allowance for expected credit losses as per impairment requirement and the amount initially recognised less, income recognised in
accordance with the principles of IFRS 15. Financial guarantees are included within other liabilities.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as letter of credit and letter of guarantee
will be treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin. As per BRPD Circular
no.01 dated 3 January 2018 and BRPD Circular no.14 dated 23 September 2012, the Bank is required to maintain provision at 1%
against gross off-balance sheet exposures.
x) Cash and cash equivalents
IFRS: Cash and cash equivalent items should be reported as cash item as per IAS 7.
Bangladesh Bank: Some highly liquid assets such as money at call and short notice, T-bills/T-bonds, prize bonds are not prescribed to
be shown as cash and cash equivalents rather shown as face item in the balance sheet. However, in the cash flow statement, money
at call and short notice and prize bonds are shown as cash and cash equivalents beside cash in hand, balance with Bangladesh Bank
and other banks.
xi) Non-banking asset
IFRS: No indication of Non-banking asset is found in any IFRS.
Bangladesh Bank: As per BRPD circular no. 22 dated 20 September 2021 and BRPD circular no. 14 dated 25 June 2003, there is a
separate balance sheet item named non-banking assets existed in the standard format.
xii) Cash flow statement
IFRS: Cash flow statement can be prepared either direct method or indirect method as per IAS 7. The presentation is selected to
present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently.
Bangladesh Bank: As per BRPD circular no 14, dated 25 June 2003, cash flows statement has been prepared following a mixture of
direct and indirect methods.
Annual Report 2022
347
Financial Statements 2022
Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified as impaired, interest on such loans
are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest in suspense account,
which is presented as a liability in the balance sheet.
xiii) Balance with Bangladesh Bank: (Cash Reserve Ratio - CRR)
IFRS: CRR maintained with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as
per IAS 7.
Bangladesh Bank: Balance with Bangladesh Bank including CRR is treated as cash and cash equivalents.
xiv) Presentation of intangible asset
IFRS: Intangible asset must be identified and recognised, and the disclosure must be given as per IAS 38.
Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD circular no. 14 dated 23 September 2012.
xv) Off-balance sheet items
IFRS: As per IFRS, there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, off balance sheet items (e.g. letter of credit, letter of guarantee etc.)
must be disclosed separately on the face of the balance sheet.
xvi) Disclosure of appropriation of profit
IFRS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face of profit
and loss account.
xvii) Loans and advances/investments net of provision
IFRS: Loans and advances/investments should be presented net of provisions.
Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, provision on loans and advances are presented separately
as liability and cannot be netted off against loans and advances.
xviii) Disclosure of IAS 19 and related provision
IFRS: As per IAS 19, actuarial valuation is needed to determine the net defined benefit obligation and provision should be made
accordingly.
Bangladesh Bank: As per minutes of tripartite meeting held on 23 March 2022, net defined benefit obligation suggested by Bangladesh
Bank inspection team is more than provision required as per actuarial valuation report. However, the management accepted the
provision suggested by the regulator.
xix) Interest on perpetual bond
IFRS: As per IAS 32, interest on perpetual bond should be recognised as interest expenses.
Bangladesh Bank: As per letter no. BRPD(BS)661/14B(P)/2022-3260 dated 30 March 2022, interest on perpetual bond is recognised
as appropriation of retained earnings instead of recognising as interest expenses.
xx) Income tax on income from treasury bills/bonds
IFRS: Current tax and deferred tax is computed considering the relevant tax law enacted in the country where the entity operates and
should be recognised as per the requirements of IAS 12.
Bangladesh Bank: As per minutes of tripartite meeting held on 23 March 2022, income tax on interest from treasury bills/bonds is
considered on accrual basis while making provision for income tax which was previously considered on cash basis. Accordingly, current
tax expenses is recognised for income from treasury bills/bonds which was previously recongnised as deferred tax.
348
Annual Report 2022
Basis of measurement
The financial statements of the Group have been prepared on historical cost basis except for the following:
- Government Treasury Bills and Bonds designated as 'Held for Trading (HFT)' are present at value using marking to market concept
with gain crediting to revaluation reserve;
- Government Treasury Bills and Bonds designated as 'Held to Maturity (HTM)' are carried at amortised cost; and
- Investment in shares of listed companies are prepared at market value with gain credited to revaluation reserve.
2.3
Going concern
The accompanying financial statements have been prepared on a going concern assumption that the Bank will continue in operation
over the foreseeable future. The Bank has neither any intention nor any legal or regulatory compulsion to liquidate or curtail materially
the scale of any of its operations. Key financial parameters (including liquidity, profitability, asset quality, provision sufficiency and
capital adequacy) of the bank continued to demonstrate a healthy trend for a couple of years. The Bank has been awarded AA1 in long
term and ST-1 in short term by Credit Rating Agency of Bangladesh (CRAB). The Bank has also being rated B1 by international rating
agency Moody’s Investors Service. Rating details are shown in note 3.20. The management does not see any issue with respect to
going concern due to recent pandemic COVID-19. Besides, the management is not aware of any other material uncertainties that may
cast significant doubt upon the bank's ability to continue as a going concern.
2.4
Functional and presentation currency
These financial statements are presented in Bangladesh Taka (Taka/Tk) which is the Bank's functional currency. Except as otherwise
indicated, financial information presented in Taka has been rounded to the nearest integer.
2.5
Use of judgments and estimates
In preparing these consolidated financial statements in conformity with International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) management has required to make judgments, estimates and assumptions that affect the
application of bank’s accounting policies and the reported amounts of assets liabilities, income and expenses. Actual results may differ
from these estimates.
The most critical estimates and judgments are applied to the following:
-
Provision for loan and advances/investments- as explained in note 3.3.3;
Employee benefit -as explained in note 3.11;
Income tax - as explained in note 3.12;
Deferred tax assets/liabilities - as explained in note 11.a.5; and
Useful lives of depreciable assets regard to noncurrent assets - as stated in note 3.3.5 and Annexure-D.
However, underlying assumptions on estimates are reviewed on a going concern basis and revisions thereon are recognised in the
period in which the estimates are revised. It is also required to disclose the contingent assets and liabilities at the date of the financial
statements in accordance with the guidelines as prescribed by IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Provision
Provisions are liabilities that are uncertain in timing or amount. Provisions are recognised in the following situations:
-
the entity has a present (legal or constructive) obligation as a result of past events;
probable out flow of resources to settle the obligation and the obligation can be measured reliably; and
it is more likely than not that outflow of resources will be required to settle the present obligation exists at the end of reporting period.
Contingent Liability
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events. A contingent liability arises when some, but not all, of the criteria for
recognizing a provision are met.
IAS 37 applies prudence by deeming a past event to give rise to a present obligation and an entity shall not recognize a contingent
liability. However, if it is possible rather than probable that an obligation exists, a contingent liability will exist, not a provision in the
financial statements. An entity shall disclose for each class of transaction of contingent liability at the end of the reporting period if the
contingent liability is not remote.
Annual Report 2022
349
Financial Statements 2022
2.2
Contingent Assets
A contingent asset is possible asset that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Entity. Contingent assets are never recognised;
rather they are disclosed in the financial statements when they arise.
2.6
Reporting period
These financial statements cover one calendar year from 1 January 2022 to 31 December 2022.
2.7
Dividend
Dividend on ordinary shares is recognised as a liability and deducted from retained earnings when they are approved by shareholders
at the Annual General Meeting (AGM) of the Bank.
Dividend on ordinary shares for the year that is recommended by the Directors after the balance sheet date for approval of shareholders
at the Annual General Meeting are disclosed in note - 52 to the financial statements.
2.8
Date of authorization
The Board of Directors has authorised these financial statements for public issue on 11 April 2023.
2.9
Cash flow statement
The cash flow statement has been prepared in accordance with IAS 7 Cash Flow Statements considering the requirements specified in
BRPD circular no. 14 dated 25 June 2003 issued by the Banking Regulation and Policy Department of Bangladesh Bank.
2.10
Statement of changes in equity
The Statement of changes in equity reflects information about the increase or decrease in net assets or wealth. Statement of changes
in equity is prepared principally in accordance with IAS 1 Presentation of Financial Statements and under the guidelines of Bangladesh
Bank's BRPD Circular no. 14 dated 25 June 2003.
2.11
Liquidity statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on the following basis:
Particulars
Basis
Cash, balance with other banks and financial institutions, money at
Stated maturity/observed behavioural trend
call and short notice, etc.
2.12
Investments
Residual maturity term
Loan and advance/investment
Repayment /maturity schedule and behavioural trend (nonmaturity products)
Fixed assets
Useful life
Other assets
Realisation/amortisation basis
Borrowing from other banks and financial institutions
Maturity/repayment term
Deposits and other accounts
Maturity/behavioural trend (non-maturity products)
Other long term liabilities
Maturity term
Provisions and other liabilities
Settlement/adjustment schedule basis
Financial statements for Offshore Banking Unit (OBU)
Reporting currency of Offshore Banking Unit is US Dollar. However, foreign currency transactions are converted into equivalent Taka
using the ruling exchange rates on the dates of respective transactions as per IAS 21 The Effects of changes in Foreign Exchange Rates.
Foreign currency balances held in US Dollar are converted into Taka at weighted average rate of Inter Bank market as determined by
Bangladesh Bank on the closing date of the reporting period.
350
Annual Report 2022
Financial Statements 2022
2.13
Non-recognition of investment in IDLC Finance Limited as associate in City Group
The bank and its two subsidiaries are holding IDLC Finance Limited's shares in the following manner:
Company Name
No. of Shares Held
Shareholdings Percentage
The City Bank Limited
37,413,141
9.00%
City Bank Capital Resources Limited
41,154,150
9.90%
City Brokerage Limited
17,912,556
4.31%
Total
96,479,847
23.21%
The group is holding 23.21% shares of IDLC Finance Limited and also representing four seats in IDLC's board. In line with IAS 28
Investments in Associates and Joint Ventures, the group is required to recognise these investments as associate as reflections of the
followings are there:
a. The group has more than 20.0% voting rights
b. Four persons are representing in IDLC Finance Limited's board.
IDLC Finance Limited, being an organization regulated by Bangladesh Bank, Bangladesh Securities and Exchange Commission, Financial
Reporting Council, Stock Exchanges, etc., formulates its operational processes and policies independently and The City Bank Ltd. does
not have significant influence over the operation and policy making of IDLC Finance Limited. Thus the bank does not recognise its
investment in said company as investment in associate in accordance with IAS-28.
3.
Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements
of the group and those of the bank have been applied consistently except otherwise instructed by Bangladesh Bank as the prime
regulator. Certain comparative amounts in the financial statements have been reclassified and rearranged to conform to the current
year’s presentation.
Accounting policies of subsidiaries
The financial statements of subsidiaries (City Brokerage Limited, City Bank capital Resources Limited, CBL Money Transfer Sdn. Bhd.
and City Hong Kong Limited) which are included in the Consolidated Financial Statements of the Group have been prepared using
uniform accounting policies of the Bank (Parent) for transactions and other events in similar nature. There is no significant restriction on
the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans and advances. All subsidiaries
of the Bank have been incorporated in Bangladesh except for CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited which are
incorporated in Malaysia and Hong Kong respectively.
3.1.1
Accounting policy for IFRS 16: Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the
lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over
the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Annual Report 2022
351
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
-
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal
period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the
Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or
termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of short-term.
3.1.2
Basis of consolidation
The consolidated financial statements include the financial statements of The City Bank Limited and those of its four subsidiaries
(City Brokerage Limited, City Bank Capital Resources Limited, CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited) prepared as
at and for the year ended 31 December 2022. The consolidated financial statements have been prepared in accordance with IFRS 10
Consolidated Financial Statements.
Ownership
Date of
incorporation
Country of
operation
City Brokerage Limited
99.996%
31-Mar-10
Bangladesh
City Bank Capital Resources Limited
99.993%
17-Aug-09
Bangladesh
CBL Money Transfer Sdn. Bhd
100.000%
4-Apr-13
Malaysia
Wholly Owned
City Hong Kong Limited*
100.000%
11-Jan-19
Hong Kong
Wholly Owned
Name of subsidiary
Status
Majority
Owned
Majority
Owned
Regulator
Year/period
closing
BSEC, DSE, CSE 31 December
BSEC, DSE, CSE 31 December
Bank Negara,
Malaysia
Bangladesh
Bank, IRD, CR
& MLU
31 December
31 December
*Primary regulators of City Hong Kong Limited in Bangladesh is Bangladesh Bank and in Hong Kong regulators are Inland Revenue
Department (IRD), Companies Registry (CR) & Money Lenders Unit (MLU).
3.1.3
Non-controlling interest
The Group elects to measure any non-controlling interests in the subsidiaries either:
-
3.1.4
at fair value; or
at their proportionate share of the acquires identifiable net assets, which are generally at fair value.
Transactions eliminated on consolidation
Intra-group balances and income and expenses arising from intra-group transactions are eliminated in preparing these consolidated
financial statements.
352
Annual Report 2022
Foreign currency transactions
According to IAS 21 The Effects of Changes in Foreign Exchange Rates transactions in foreign currencies are recorded in the functional
currency at the rate of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated into the functional currency at the spot exchange rate at that date. Non-monetary
assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at
the spot exchange rate at the date that the fair value was determined. Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognised in the profit and loss statement.
3.3.1
Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, ATM, unrestricted balances held with Bangladesh Bank and its agent bank,
balance with other banks and financial institutions, money at call and short notice, investments in treasury bills, Bangladesh Bank bill
and prize bonds.
3.3.2
Investments
All investments (other than government treasury securities) are initially recognised at cost including acquisition charges associated
with the investment. Premiums are amortised and discount accredited using the effective or historical yield method. Accounting
treatment of government treasury bills and bonds (categorised as HFT and HTM) are made in accordance with Bangladesh Bank DOS
Circular letter no. 05, dated 26 May 2008 and subsequent clarifications DOS Circular letter no. 05 dated 28 January 2009.
Held to Maturity
Investments which have 'fixed or determinable payments' and are intended to be held to maturity are classified as 'Held to Maturity'.
These are measured at amortised cost at each year end by taking into account any discount or premium in acquisition. Any increase or
decrease in value of such investments are booked under equity and in the profit and loss statement respectively.
Held for Trading
Investments classified in this category are acquired principally for the purpose of selling or repurchasing in short trading or if designated
as such by the management. After initial recognition, investments are marked to market weekly and any decrease in the present
value is recognised in the Profit and Loss Account and any increase is booked to Revaluation Reserve Account through Profit and Loss
Account as per DOS Circular no. 05 dated 28 January 2009.
Investment in quoted shares
These securities are bought and held primarily for the purpose of selling them in future or held for dividend income. These are valued
and reported at market price as per Bangladesh Bank's guidelines. Booking of provision for investment in securities (gain/loss net off
basis) are made as per DOS Circular no.4 dated 14 November 2011.
Investment under special fund and investment policy
Investment in quoted shares and bonds through special fund as per DOS Circular no. 01 dated 10 February 2020 are recognised at cost
in line with the circular.
Investment in unquoted shares
Investment in unquoted shares are recognised at cost under cost method. Adjustment is given for any shortage of book value over cost
for determining the carrying amount of investment in unquoted shares.
Annual Report 2022
353
Financial Statements 2022
3.2
Value of investments has been shown as under:
Investment Class
Initial
Recognition
Govt. treasury securities - Held to Maturity (HTM)
Cost
Govt. treasury securities - Held for Trading (HFT)
Cost
Debenture/Bond
Face value
Shares (Quoted) *
Cost
Shares (Unquoted)*
Cost
Prize bond
Cost
Measurement after initial
recognition
Recording of changes
Increase in value of such investments
is booked to equity, decrease to profit
and loss account.
Loss to Profit and Loss Account, gain
Fair value
to Revaluation Reserve.
Face value
None
Loss (net off gain) to profit and loss
Lower of cost or market
account. Unrealized gain is recognized
value (overall portfolio)
through revaluation reserve.
Lower of cost or Net Asset Loss to profit and loss account but no
Value (NAV)
unrealised gain booking.
Cost
None
Amortised cost
* Provision for shares against unrealised loss (gain net off) has been taken into account according to DOS circular no. 4 dated 24
November 2011 and for mutual funds (closed-end) as per DOS circular letter no. 3 dated 12 March 2015 and for mutual funds (openend) as per DOS circular letter no. 10 dated 28 June 2015 of Bangladesh Bank.
Investment in Subsidiaries
Investments in subsidiaries are accounted for under the cost method of accounting in the Bank’s financial statements in accordance
with IAS 27 Consolidated and Separate Financial Statements and IFRS 10 Consolidated Financial Statements. Impairment of investment in
subsidiaries (if any) the bank takes it into account as per the provision of IAS 36 Impairment of Assets.
3.3.3
Loans and advances/investments and provisions for loans and advances/investments
a) Loans and advances of conventional banking/investments of Islamic Banking branches are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and that the Bank does not sell in the normal course of business.
b) At each balance sheet date and periodically throughout the year, the Bank reviews loans and advances to assess whether objective
evidence that impairment of a loan or portfolio of loans has arisen supporting a change in the classification of loans and advances,
which may result in a change in the provision required in accordance with BRPD circular no. 53 (22 December 2022), BRPD circular
no. 51 (18 December 2022), BRPD circular no. 14 (22 June 2022), BRPD circular no. 53 (30 December 2021), BRPD circular no. 52
(29 December 2021), BRPD circular no. 51 (29 December 2021), BRPD circular no. 50 (14 December 2021), BRPD circular no. 45 (04
October 2021), BRPD circular no. 19 (26 August 2021), BRPD circular no. 13 (27 June 2021), BRPD circular no. 05 (24 March 2021),
BRPD circular no. 03 (31 January 2021), BRPD circular no. 56 (10 December 2020), BRPD circular no. 52 (20 October 2020), BRPD
circular no. 16 (21 July 2020), BRPD circular no. 03 (21 April 2019), BRPD circular no.1 (20 February 2018), BRPD circular no.15
(27 September 2017), BRPD circular no.16 (18 November 2014), BRPD circular no. 05 (29 May 2013), BRPD circular no. 19 (27
December 2012) and BRPD circular no.14 (23 September 2012). The guidance in the circular follows a formulaic approach whereby
specified rates are applied to the various categories of loans as defined in the circular. The provisioning rates are as follows:
Types of loans and advances
Provision
STD
SMA
SS
DF
BL
1.00% - 2.00%
1.00% - 2.00%
20.00%
50.00%
100.00%
2.00%
2.00%
20.00%
50.00%
100.00%
2.00%
2.00%
20.00%
50.00%
100.00%
Consumer:
House building and professional
Other than housing finance & professionals to
setup business
Provision for loan to broker house, merchant
banks, stock dealers, etc
354
Short-term agri-credit and micro credit
1.00%
N/A
5.00%
5.00%
100.00%
Small and medium enterprise finance
0.25%
0.25%
20.00%
50.00%
100.00%
Cottage, micro and small credit (CMSME)
0.25%
0.25%
5.00%
20.00%
100.00%
Others
1.00%
1.00%
20.00%
50.00%
100.00%
Annual Report 2022
c) Loans and advances are written off to the extent that i) there is no realistic prospect of recovery, and ii) against which legal cases
are filed, where required and classified as bad/loss as per as per BRPD circular no. 01 dated 06 February 2019, BRPD circular no. 13
dated 07 November 2013 and BRPD circular no. 02 dated 13 January 2003 of Bangladesh Bank.
These write off however will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all
such written off accounts are maintained and followed up.
d) Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.
3.3.4
Staff loan
House building and car loan are provided to the permanent staff at a subsidised rate. Criteria and detail of type wise staff loan are given
below:
House building loan
A permanent staff completing 5 years of service can avail house building loan subject to getting approval from Managing Director &
CEO and recommended by the concerned divisional head.
Car loan
All permanent staff from AVP can avail car loan subject to getting approval from Managing Director & CEO and recommended by the
concerned divisional head.
3.3.5
Fixed assets (property, plant and equipment)
Recognition and measurement
As per IAS 16 Property and Equipment Items of fixed assets excluding land are measured at cost less accumulated depreciation and
accumulated impairment losses, if any. Land is carried at cost.
Purchase of software that is integral to the related equipment is capitalised as part of that equipment.
Cost includes expenditure that are directly attributable to the acquisition of asset and bringing to the location and condition necessary
for it to be capable of operating in the intended manner.
When significant parts of an item of fixed asset have different useful lives, they are accounted for as separate items (major components)
of fixed assets.
The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds from disposal with the carrying amount
of the item of fixed asset, and is recognised in other income/other expenses in profit or loss.
Subsequent costs
The cost of replacing a component of an item of fixed asset is recognised in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the group and its cost can be measured reliably. The carrying amount of
the replaced parts is derecognised. The costs of the day to day servicing of fixed assets are recognised in the profit and loss statement
as incurred.
Annual Report 2022
355
Financial Statements 2022
BRPD Circular no.14 (23 September 2012) as amended by BRPD Circular no. 19 (27 December 2012) also provides scope for
further provisioning based on qualitative judgments. In these circumstances impairment losses are calculated on individual loans
considered individually significant based on which specific provisions are raised. If the specific provisions assessed under the
qualitative methodology are higher than the specific provisions assessed under the formulaic approach above, the higher of the
two is recognised in liabilities under “Provision for loans and advances” with any movement in the provision charged/released in the
profit and loss account. Classified loans are categorised into sub-standard, doubtful and bad/loss based on the criteria stipulated
by Bangladesh Bank guideline.
Depreciation
Depreciation on fixed assets are recognised in the profit and loss statement on straight line method over its estimated useful lives. In
case of acquisition of fixed assets, depreciation is charged from the month of acquisition, whereas depreciation on disposed off fixed
assets are charged up to the month prior to the disposal. Asset category wise depreciation rates for the current and comparative
periods are as follows:
Category of assets
Land
Building
Furniture and fixtures
Office equipment and machinery
Software
Vehicles
3.3.6
Estimated useful
lives (Years)
N/A
40
10
5
10
5
Rate of depreciation/
amortisation per annum
Nil
2.50%
10.00%
20.00%
10.00%
20.00%
Non- banking assets
Non-banking assets were acquired by the entity due to failure of borrowers to repay the loan in time taken against mortgaged property.
The Bank was awarded absolute ownership on few mortgaged properties (mostly land) through the verdict of honourable court under
section 33 (7) of the Artharin Adalat Act 2003. The value of the properties has been recognised in the financial statements as nonearning assets on the basis of third party valuation report. As per BRPD Circular no.22 (20 September 2021), Bank presented party wise
details (including possession date & holding period) of non banking properties separately in note 12.
3.3.7
Provisions for other assets
According to Bangladesh Bank’s circular BRPD-4/2022, other assets are required to be classified as unclassified, doubtful and bad/
loss based on the basis of outstanding period and uncertainty of recovery. Based on classification status provision is required to be
maintained @50.0% for doubtful and 100.0% for bad/loss.
3.3.8
Intangible assets and its amortisation
Intangible assets comprise separately identifiable intangible items arising from use of franchise of AMEX and the use of Finacle from
Infosys. Intangible assets are recognised at cost. Intangible assets with a definite useful life are amortised using the straight line
method over its estimated useful economic life.
3.3.9
Reconciliation of inter-bank and inter-branch account
Account with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material differences
which may affect the financial statements significantly. Unreconciled entries/balances in the case of inter-branch transactions on the
reporting date are not material.
3.4
Liabilities and basis of their valuation
3.4.1
Tier-II subordinated bond
Tier-II Subordinated bond includes fund raised from several banks, financial institutions and other organization through issuance of
7 (seven) years Bonds for Taka 5,000 million during 2017, 7 (Seven) years Bonds for Taka 4,200 during 2018 to January 2019 and 7
(Seven) years Bonds for Taka 7,000 million during 2022. Details are shown in note 13.01.
3.4.2
Perpetual bond
City Bank Limited, as the pioneer has successfully launched subscription of the first ever Perpetual Bond in the industry as well as
the country. The issuance process of “City Bank Perpetual Bond” was initiated back in 2019 and with subsequent approvals from the
regulators, the Bank had completed subscription of Taka 4,000 million within 31 December 2022. Details are shown in note 13.02.
3.4.3
356
Borrowings from other banks, financial institutions and agents
Annual Report 2022
3.4.4
Deposits and other accounts
Deposits and other accounts include non interest-bearing current deposit redeemable at call, interest bearing on demand and
short-term deposits, savings deposit and fixed deposit. These items are brought into financial statements are at the gross value of
outstanding balance. Details are shown in note 15.
3.4.5
Provision for liabilities
As per IAS 37, provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a current
legal or constructive obligation as a result of past events, and a reliable estimate can be made of the amount of the obligation.
3.4.6
Provision for Off-balance sheet exposure
As per BRPD circular no.14 (23 September 2012) the Bank has recognised 1% General Provision on the following off balance sheet
exposures as defined in BRPD circular no.10 (24 November 2002) considering the exemption as provided through BRPD circular no.09
(27 May 2019), BRPD circular no.02 (25 February 2019), BRPD circular no.13 (18 October 2018), BRPD circular no.7 (21 June 2018),
BRPD circular no.01 (03 January 2018) and BRPD circular letter no. BPRD(P-1)/661/13/2020-1403 (05 February 2020) and BRPD
circular letter no. BPRD(P-1)/661/13/2019-354 (13 January 2020).
-
3.4.7
Acceptance and endorsements;
Letters of guarantee;
Irrevocable letters of credit; and
Foreign exchange contracts
Provisions on balances with other banks and financial institutions (Nostro accounts)
Provision for unsettled transactions on nostro accounts is made as per Foreign Exchange Policy Department (FEPD) circular no. FEPD
(FEMO) / 01/2005-677 dated 13 September 2005 of Foreign Exchange Policy Department (FEPD) of Bangladesh Bank and reviewed
semi-annually by our management along with duly certified by the external auditor. On the reporting date, the Bank has no unsettled
transactions outstanding for more than 3 months and no provision has been made in this regard.
3.4.8
Provision for rebate to good borrower
Previously commercial banks were required to maintain provision @10.0% of interest charged against loans to good borrowers,
identified on the basis of prescribed guidelines stated in BRPD Circular no. 06 (19 March 2015) and BRPD Circular Letter no 03 (16
February 2016) for onward rebate to the recognized good borrowers. However, Bangladesh Bank during 2020 issued another circular
(BRPD Circular No. 14 dated 18 June 2020), wherein it is mentioned that from 2020 banks need not to provide any rebate to good
borrowers. Hence, during 2022, no further good borrowers’ provision was accounted for in the financials.
3.4.9
Other liabilities
Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest
suspense, accrued expenses, lease obligation etc. Other liabilities are recognised in the balance sheet according to the guidelines of
Bangladesh Bank, Income Tax Ordinance, 1984 and internal policy of the Bank.
3.5
Capital/Shareholders' equity
3.5.1
Authorised capital
Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of Association
to issue (allocate) among shareholders. This amount can be changed by shareholders' approval upon fulfilment of relevant provisions
of the Companies Act, 1994. Part of the authorised capital usually remains unissued. The part of the authorised capital already issued
to shareholders is referred to as the issued share capital of the Bank.
3.5.2
Paid up capital
Annual Report 2022
357
Financial Statements 2022
Borrowings from other banks, financial institutions and agents includes refinance from Bangladesh Bank against agro-based credit,
SME and EDF Loan etc., interest-bearing borrowings against securities from Bangladesh Bank, call borrowing from other banks and
borrowing from other multilateral organisations. These items are brought to financial statements at the gross value of the outstanding
balance. Details are shown in note 14.
3.5.3
Share premium
Share premium is the capital that the Bank raises upon issuing shares for a price in excess of the nominal value of shares. The share
premium shall be utilised in accordance with provision of section 57 of the Companies Act, 1994 and as directed by Securities and
Exchange Commission in this respect.
3.5.4
Statutory reserve
Statutory reserve has been maintained at the rate of 20% of profit before tax in accordance with provisions of section 24 of the Bank
Companies Act, 1991 (amended up to 2018). Such transfer shall continue until the reserve balance equals its paid up capital together
with the share premium.
3.5.5
Revaluation reserve for government securities
Revaluation reserve for government securities arises from the revaluation of treasury bills, Bangladesh Bank bills and treasury bonds
(HFT and HTM) in accordance with the DOS Circular no. 5 dated 26 May 2008 and DOS(SR) 1153/120/2010 dated 8 December 2010.
3.5.6
Capital management
The Bank has a capital management process in place to measure, deploy and monitor its available capital and assess its adequacy. This
capital management process aims to achieve the following objectives:
-
To comply with the capital requirements set by the regulators;
To safeguard the Bank's ability to continue as a going concern so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and
To maintain a strong capital base to support the development of its business.
Capital is managed in accordance with the Board approved Capital Management Planning. Senior management develops the capital
strategy and oversee the capital management planning of the Bank. The Bank's finance, treasury and risk management departments
are key participators in implementing the Bank's capital strategy and managing capital. Capital is managed using both regulatory capital
measures and internal matrix.
3.6
Revenue recognition
3.6.1
Interest income
Interest on loans and advances is calculated on daily product basis. Based on product features, interest is accrued or charged to
customers' accounts on monthly/quarterly basis.
In accordance with BRPD Circular no.14 (23 September 2012) as amended by BRPD Circular No. 19 (27 December 2012) and BRPD
Circular no. 56 (10 December 2020) interest accrued on sub-standard loans and doubtful loans are credited to an “Interest Suspense
Account” which is included within “Other liabilities”. Interest from loans and advances ceases to be accrued when they are classified as
bad/loss. It is then kept in interest suspense in a memorandum account.
3.6.2
Profit on investment (Islamic Banking)
Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge/compensation on
classified investments are transferred to profit suspense account instead of income account.
3.6.3
Investment income
Income on investments are recognised on accrual basis. Investment income includes discount on treasury bills and Bangladesh
Bank bills, interest on treasury bonds and fixed deposit with other banks. Capital gain on investments in shares are also included in
investment income. Capital gain is recognised when it is realised.
358
Annual Report 2022
Fees and commission income
The Bank earns commission and fee income from a diverse range of service provided to its customers. Commission and fee income is
accounted for as follows:
-
3.7
income earned on the execution of a significant act is recognised as revenue when the act is completed;
income earned from services provided is recognised as revenue as the services are provided; and
Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the
transactions.
Interest paid on subordinated bond, borrowing and other deposits (Conventional banking)
Interest paid and other expenses are recognised on accrual basis.
3.8
Profit shared on deposits (Islamic banking)
Profit shared to mudaraba deposits are recognised on accrual basis.
3.9
Dividend income
Dividend income is recognised when the right to receive income is established. Dividends are presented under investment income.
3.10
Others
Foreign exchange gain/ loss
Exchange income includes all gain and losses from foreign currency day to day transactions, conversions and revaluation of non
monetary items.
3.11
Employee benefits
3.11.1
Provident Fund
Provident Fund benefits are given to the employees of the Bank in accordance with the registered Provident Fund rules. The
Commissioner of Income Tax, Taxes Zone - 4, Dhaka, has approved the Provident Fund as a recognized fund within the meaning of
section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The reorganization took effect
on 31 October 1987. The Provident Fund is operated by a Board of Trustees consisting of 5 members of the Bank. All confirmed
employees of the Bank are contributing 10% of their basic salary as subscription to the Provident Fund. The Bank also contributes equal
amount to the Provident Fund. Contributions made by the Bank are charged as expense and the Bank bears no further liability. Interest
earned from the investments is credited to the members' account on yearly basis. By Law the Provident fund is duly audited by M/S
Snehashish Mahmud & Co.
3.11.2
Gratuity Fund
Gratuity Fund benefits are given to the employees of the Bank in accordance with the approved Gratuity Fund rules. National Board
of Revenue has approved the Gratuity Fund as a recognized gratuity fund with effect from 3 June 2012. The Gratuity Fund is operated
by a Board of Trustee consists of 5 members of the Bank. Provision for gratuity is made annually covering all its permanent eligible
employees. A valuation of gratuity scheme is regularly carried out by a professional Actuarial & Pension Consultants, Willis Towers
Watson to assess the adequacy of the liabilities provided for the scheme as per IAS 19 Employee Benefits. On continuing fund basis
valuation, the Bank has been maintaining adequate provision against gratuity scheme. By Law the Gratuity fund is duly audited by M/S
Snehashish Mahmud & Co.
Sl no.
i)
ii)
iii)
iv)
v)
Principal Actuarial assumptions
Discount rate
Expected rate of return on plan assets
Rate of increases in pensionable salaries
Expected rate of withdrawal from service
Life table used
2022
%
8.0%
8.0%
7.0%
9.0%
Indian Assured Lives
Mortality (2006-2008) Ult
2021
%
7.6%
7.6%
5.6%
9.0%
Indian Assured Lives
Mortality (2006-2008) Ult
Annual Report 2022
359
Financial Statements 2022
3.6.4
3.11.3
Other employee benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus or profit-sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably. The Bank has following short term employee benefit schemes:
Hospitalisation insurance
The Bank has a health insurance scheme to its confirmed employees and their respective dependents at rates provided in health
insurance coverage policy.
Life insurance
The Bank has a group life insurance scheme to its confirmed employees and the benefit of the scheme is available to the family of the
employee on the occurrence of natural death of the employee during the tenure of his/her service.
Performance bonus
Provision of Workers' Profit Participation Fund and Welfare Fund mentioned in Bangladesh Labour (Amendments) Act, 2013 contradicts
Bank Company Act, 1991 through which Bank Companies are regulated. Section-11 of Bank Company Act, 1991 restricts to employ
anyone who receives remuneration or part of remuneration as share of profit of the company and remuneration includes salary and
other benefit. Accordingly, we obtained a legal opinion from Nurul Alam & Associates, Advocates and Consultants, wherein it is opined
that Worker’s Profit Participation and Welfare Fund shall not be applicable for Bank Companies, as there is no non-obstante clause.
Unless Government of Peoples Republic of Bangladesh amends section 11 of Bank Company Act or frames rules, giving overriding
effect to Bank Company Act, 1991, section 232 of Bangladesh Labour (Amendments) Act, 2013 will not be applicable for banks.
Moreover, in the Bank, performance bonus provision is there, which is distributed among the employees on the basis of individual
employee’s yearly performance with a view to recognize welfare of the employees and reward their participation and contribution to
the company.
3.12
Tax expense
Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the profit and loss statement except to
the extent that it relates to items recognised directly in equity.
3.12.1
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Details are shown in note 16.a.6.
3.12.2
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:
-
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss;
-
temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the
foreseeable future; and
-
temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
360
Annual Report 2022
3.12.3
Tax exposures
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether
additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments
about future events. New information may become available that causes the Bank to change its judgment regarding the adequacy of
existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
3.13
Impairment of non-financial assets
The carrying amounts of the Group’s and the Bank's non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated. An impairment loss is recognised if the carrying amount of an asset or its Cash Generating Unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount of the other assets in
the CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no
longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
3.14
Earnings per share
The Group and the Bank present basic and diluted Earnings Per Share (EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to the ordinary shareholders and
the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise
share options granted to employees.
No diluted earnings per share is required to be calculated for the period.
3.15
Compliance with International Financial Reporting Standards (IFRS)
The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) was formed in 2017
and has since then adopted International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) as the
applicable Financial Reporting Standards for public interest entities such as banks with effect from 2 November 2020.
Accordingly, the financial statements of the Bank continue to be prepared in accordance with International Financial Reporting
Standards (IFRSs) and the requirements of the Banking Companies Act, 1991 (amendment up to 2018), the rules and regulations
issued by Bangladesh Bank, the Companies Act, 1994. In case any requirement of the Banking Companies Act, 1991 (amendment up to
2018), and provisions and circulars issued by Bangladesh Bank differ with those of IFRSs, the requirements of the Banking Companies
Act, 1991 (amendment up to 2018), and provisions and circulars issued by Bangladesh Bank shall prevail.
Annual Report 2022
361
Financial Statements 2022
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Paid up capital represents total amount of shareholders' capital that has been paid in full by the ordinary shareholders. Holders of
ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at shareholders’ meetings. In
the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to
any residual proceeds of liquidation.
Name of the standards
First-time Adoption of Bangladesh Financial Reporting Standards
Share-based Payment
Business Combinations
Insurance Contracts
Non-current Assets Held for Sale and Discontinued Operations
Exploration for and Evaluation of Mineral Resources
Financial Instruments: Disclosures
Operating Segments
Financial Instruments
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interest in Other Entities
Fair Value Measurement
Regulatory Deferral Accounts
Revenue from contractors with customers
Leases
Presentation of Financial Statements
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Reporting Period
Income Taxes
Property, Plant and Equipment
Employee Benefits
Accounting for Government Grants and Disclosure of Govt Assistance
The Effects of Changes in Foreign Exchange Rates
Borrowing Costs
Related Party Disclosures
Accounting and Reporting by Retirement Benefit Plans
Separate Financial Statements
Investments in Associates and Joint Venture
Financial Instruments: Presentation
Earnings per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
Intangible Assets
Financial Instruments: Recognition and Measurement
Investment property
Agriculture
IFRS Ref.
Implementation status
by the Bank
IFRS-1
IFRS-2
IFRS-3
IFRS-4
IFRS-5
IFRS-6
IFRS-7
IFRS-8
IFRS-9
IFRS-10
IFRS-11
IFRS-12
IFRS-13
IFRS-14
IFRS-15
IFRS-16
IAS-1
IAS-2
IAS-7
IAS-8
IAS-10
IAS-12
IAS-16
IAS-19
IAS-20
IAS-21
IAS-23
IAS-24
IAS-26
IAS-27
IAS-28
IAS-32
IAS-33
IAS-34
IAS-36
IAS-37
IAS-38
IAS-39
IAS-40
IAS-41
Not applicable
Not applicable
Applied
Not applicable
Not applicable
Not applicable
Applied with some departure (note 2.1)
Applied with some departure (note 3.19)
Applied with some departure (note 2.1)
Applied
Not applicable
Applied
Applied with some departure (note 2.1)
Not applicable
Applied
Applied
Applied with some departure (note 2.1)
Not Applicable
Applied with some departure (note 2.1)
Applied
Applied
Applied
Applied
Applied
Not Applicable
Applied
Not Applicable
Applied
Not Applicable
Applied
Not Applicable
Applied with some departure (note 2.1)
Applied
Applied
Applied
Applied
Applied
Applied (for Hedge Accounting)
Not Applicable
Not Applicable
In order to comply with certain specific rules and regulations of Bangladesh Bank which are different to IAS/IFRS, some of the
requirements specified in these IAS/IFRSs are not applied. Refer to note-2.1 for such recognition and measurement differences that
are most relevant and material to the Bank and the Group.
The Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the plan.
Therefore, it is not applicable for the Bank’s annual report as it is the employer and not the retirement benefit plan itself.
362
Annual Report 2022
3.16
Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after 1 January 2022 and earlier application is permitted;
however, the Bank has not early adopted the new or amended standards in preparing these financial statements.
Effective date
New standards or amendments
• Amendments to IAS 1 (Classification of Liabilities as Current or Non Current)
1 January 2023
• IFRS 17 “Insurance Contracts”
• Amendments to IAS 8 (Definition of Accounting Estimate)
• Amendments to IAS 1 and IFRS Practice Statement 2 (Disclosure of Accounting Policies)
Effective date deferred • Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and
indefinitely/ available Joint Ventures” on sale or contribution of assets between an investor and its associate or joint venture
for optional adoption
3.17
Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the group has a
legal right to set off the recognised amounts and it intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and losses arising from a group of
similar transactions such as in the group’s trading activity.
3.18
Segment reporting
The group and the Bank have no identified operating segment and as such presentation of segmental reporting is not made in the
financial statements as per IFRS 8. However, geographical and business segments wise limited disclosures are furnished in note 50
and Annexure-H.
Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the management. Income,
expenses, assets and liabilities are specifically identified with individual segments. Based on such allocation, segmental balance sheet
as on 31 December 2022 and segmental profit and loss account for the year ended 31 December 2022 have been prepared.
3.19
Materiality and aggregation
Each material class of similar items has been presented separately in the financial statements. Items of dissimilar nature also have
been presented separately unless they are immaterial in accordance with IAS 1 Presentation of Financial Statements.
3.20
Credit rating of the Bank
As per BRPD Circular no. 6 dated 5 July 2006, the Bank has done its credit rating by Credit Rating Agency of Bangladesh (CRAB) based
on the financial statements as at and for the year ended 31 December 2021. The following ratings have been awarded:
Particulars
Entity Rating
Entity Rating
Entity Rating
Periods
January to December
2021
January to December
2020
January to December
2019
Date of Rating
Long term Short term
Rating Valid
1-Jun-22
AA1
ST-1
30-Jun-23
10-Jun-21
AA2
ST-2
30-Jun-22
30-Jun-20
AA2
ST-2
30-Jun-21
Bank also has been assessed by renowned international rating agency Moody’s Investors Service and awarded B1 based on the 30
September 2022 financial statements, as well as other quantitative and qualitative information.
Annual Report 2022
363
Financial Statements 2022
The objective of IAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the principles for recognition
and measurement in complete or condensed financial statements for an interim period and hence it is not applicable for annual financial
statements. However, the Bank being a listed entity in Dhaka and Chittagong Stock Exchanges regularly publishes Interim Financial
Report complying with IAS 34.
Based on financial statements, as well as other quantitative and qualitative information, the Bank’s ratings are as follows:
3.21
Rating type
Date of Rating
Long term
Short term
Outlook
Surveillance
15-Dec-22
B1
NP
Rating(s) Under Review
Surveillance
15-Sep-21
B1
NP
Stable
Surveillance
17-Dec-20
B1
NP
Negative
Derivative financial instruments
The fair value of derivative, interest rate swaps, is recognized in the profit and loss account of the bank, as per IFRS 9. The value of the
contract itself is shown as an item of other contingent liabilities, as per Bangladesh Bank guidelines. No provision is kept on items of
derivatives as there is no exposure on such gross value for the Bank.
3.22
Accounting for changes in policy, accounting estimates and errors
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, states that the effect of a change in accounting policy and correction
of errors, if material, is to be applied retrospectively, and change in an accounting estimate is to be applied prospectively. The carrying
amount of assets, liabilities, or equity may be changed following a change in accounting estimates in the period of the change. The bank
followed the same accordingly and the Bank did not change the accounting policies and accounting estimates during the year 2022.
3.23
Related party disclosures
A party is related to the company if:
(i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the
company; has an interest in the company that gives it significant influence over the company; or has joint control over the company;
(ii) the party is an associate;
(iii) the party is a joint venture;
(iv) the party is a member of the key management personnel of the Company or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such
entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the company, or of any entity that is a related party
of the company.
Details of the related party disclosures presented in note no. 51 and Annexure- F.
3.24
Events after reporting period
As per IAS 10 Events after Reporting Period events after the reporting period are those events, favourable and unfavourable, that occur
between the end of the reporting period and the date when the financial statements are authorised for issue. Two types of events can
be identified:
(a) adjusting events after the reporting period (those that provide evidence of conditions that existed at the end of the reporting period); and
(b) non adjusting events after the reporting period (those that are indicative of conditions that arose after the reporting period).
Details of the Events after reporting period presented in note no. 52.
364
Annual Report 2022
Consolidated cash in hand
The City Bank Limited (note 4.a.1)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
8,361,643,776
77,500
25,321
1,405,647
8,363,152,244
8,363,152,244
7,081,963,793
77,500
55,944
1,022,189
7,083,119,426
7,083,119,426
8,361,643,776
23,661,679,377
32,023,323,153
7,081,963,793
23,142,429,928
30,224,393,721
8,145,430,152
216,213,624
8,361,643,776
6,951,484,205
130,479,588
7,081,963,793
Local currency
Foreign currency
20,355,260,062
2,555,570,194
22,910,830,256
18,046,980,617
4,152,347,131
22,199,327,748
Sonali Bank Limited as agent of Bangladesh Bank (local currency)
750,849,121
23,661,679,377
943,102,180
23,142,429,928
Adjustments for Consolidation - The City Bank Limited
4.a
Cash - The City Bank Limited
In hand - including foreign currencies (note 4.a.1)
Balance with Bangladesh Bank and its agent bank (s) - including foreign currencies (note 4.a.2)
4.a.1
Cash in hand
Local currency
Foreign currency
4.a.2
2021
Taka
Balance with Bangladesh Bank and its agent bank(s)
The above balance represents amount as per Bank book. The difference due to reconciling items with Bangladesh Bank are subsequently
adjusted.
Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Banking
Companies Act, 1991 (Amended up to 2018), BRPD circular no.11 and 12, dated 25 August 2005, MPD circular no.116/2013-757 dated
10 December 2013, MPD Circular no. 1 dated 23 June 2014, MPD circular No. 01 dated 03 April 2018 and MPD circular No. 03 dated 09
April 2020.
The minimum Cash Reserve Ratio on the Bank’s time and demand liabilities at the rate of 4% on bi-weekly basis has been calculated and
maintained with Bangladesh Bank in current account and 13% Statutory Liquidity Ratio, excluding CRR, on the same liabilities has also
been maintained in the form of treasury bills, bonds and debentures including foreign currency balances with Bangladesh Bank (CRR and
SLR of December 2022 is based on weekly average time and demand liabilities balance of October 2022). Both reserves maintained by
the Bank are in excess of the statutory requirements, as shown below:
a)
b)
4.a.3
Cash Reserve Ratio (CRR)
Required reserve
Actual reserve maintained
Surplus
Statutory Liquidity Ratio (SLR)
Required reserve
Actual reserve maintained (note 4.a.3)
Surplus
11,885,820,360
18,293,003,401
6,407,183,041
47,069,305,545
69,148,139,007
22,078,833,462
38,205,189,750
62,441,942,275
24,236,752,525
8,361,643,776
731,396,573
7,309,965,168
52,745,133,490
69,148,139,007
7,081,963,793
861,465,993
6,407,183,041
48,091,329,448
62,441,942,275
28,911,665,052
604,425,874
227,421,443
187,237,970
29,930,750,339
21,713,194,953
1,030,827,787
327,773,496
1,768,158
23,073,564,394
Held for Statutory Liquidity Ratio (SLR)
Cash in hand
Sonali Bank Limited as agent of Bangladesh Bank as per statement balance
Surplus of CRR - balance with Bangladesh Bank
Government securities and bonds
5
14,587,385,985
21,897,351,153
7,309,965,168
Consolidated balance with other banks and financial institutions
In Bangladesh
The City Bank Limited (note 5.a)
City Brokerage Limited
City Bank Capital Resources Limited
City Hong Kong Limited
Annual Report 2022
365
Financial Statements 2022
4
2022
Taka
Mutual indebtedness:
Deposit with The City Bank Limited - City Brokerage Limited
Deposit with The City Bank Limited - City Bank Capital Resources Limited
Deposit with The City Bank Limited - City Hong Kong Limited
5.a
2021
Taka
Adjustments for Consolidation - City Brokerage Limited
Total in Bangladesh
(286,008,925)
(237,942,171)
(187,237,944)
(711,189,040)
29,219,561,299
(910,613,070)
(146,086,463)
(1,768,304)
(1,058,467,837)
22,015,096,557
Outside Bangladesh
The City Bank Limited (note 5.a)
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Total outside Bangladesh
Grand total
3,813,382,638
97,330,283
3,763,033
3,914,475,954
33,134,037,253
1,080,856,199
30,444,135
32,952,021
1,144,252,355
23,159,348,912
28,911,665,052
3,813,382,638
32,725,047,690
21,713,194,953
1,080,856,199
22,794,051,152
197,720,561
181,321,374
45,636,725
8,290,925
432,969,585
73,300,945
175,040,859
163,052,461
10,393,845
421,788,110
128,167,573
26,800,178
16,414,938
10,775,648
3,665,378
2,929,915
2,743,880
2,555,888
1,706,787
402,115
196,162,300
133,826,151
519,910,509
16,164,349
10,694,063
1,002,398,016
10,804,846
2,427,656
3,429,244
1,665,214
1,012,596
3,186,857
8,175
1,705,527,676
6,500,000,000
6,230,000,000
5,049,390,500
2,300,000,000
1,000,000,000
900,000,000
900,000,000
860,000,000
830,000,000
817,500,000
800,000,000
516,463,500
500,000,000
500,000,000
350,000,000
140,000,000
89,179,167
28,282,533,167
28,911,665,052
5,500,000,000
6,250,000,000
2,316,600,000
500,000,000
620,000,000
1,030,000,000
830,000,000
1,000,000,000
350,000,000
140,000,000
89,279,167
960,000,000
19,585,879,167
21,713,194,953
Balance with other banks and financial institutions - The City Bank Limited
In Bangladesh (note 5.a.1)
Outside Bangladesh (note 5.a.2)
5.a.1
2022
Taka
In Bangladesh
Current accounts
Sonali Bank Limited
Agrani Bank Limited
Rupali Bank Limited
Janata Bank Limited
Sub total
Short notice deposit accounts
Standard Chartered Bank Limited
Exim Bank Limited
AB Bank Limited
Southeast Bank Limited
Prime Bank Limited
Rupali Bank Limited
Bank Al-Falah Limited
Trust Bank Limited
Social Islami Bank Limited
Mutual Trust Bank Limited
Sonali Bank Limited
Dutch-Bangla Bank Limited
Sub total
Fixed deposit receipts
IDLC Finance Limited
Investment Corporation of Bangladesh
Islami Bank Bangladesh Limited
Exim Bank Limited
Al Arafah Islami Bank Limited
Standard Bank Limited
Agrani Bank Limited
Bangladesh Finance and Investment Company Limited
IPDC Finance Limited
Industrial and Infrastructure Development Finance Company Limited
Delta Brac Housing Finance Corporation Limited
Easter Bank Limited
Midland Bank Limited
One Bank Limited
Phoenix Finance & Investments Limited
GSP Finance Company (BD) Limited
ICB Islamic Bank Limited
Lankabangla Finance Limited
Sub total
Total
366
Annual Report 2022
Outside Bangladesh (Nostro accounts)
Currency
Current accounts
Standard Chartered Bank, New York, USA
Standard Chartered Bank, Mumbai, India
Citibank N.A. New York, USA
JP Morgan Chase Bank, New York
Habib American Bank, New York, USA
MCB Bank Limited, Karachi, Pakistan
HDFC Bank Limited, Mumbai, India
Commerz Bank AG. Frankfurt, Germany
Mashreq Bank, Dubai
Standard Chartered Bank, Frunkfurt, Germany
Standard Chartered Bank, London
Zhejiang Chouzhou Commercial Bank, China
Mashreq Bank, New York, USA
AB Bank Limited., Mumbai, India
Kookmin Bank, Korea
Bank of Bhutan, Bhutan
Commerz Bank AG. Frankfurt, Germany
Commerz Bank AG. Frankfurt
Sonali Bank Limited., Kolkata, India
Standard Chartered Bank, Japan
Mashreq Bank, Mumbai, India
Commercial Bank of Ceylon, Colombo, Sri Lanka
Standard Chartered Bank, Nepal
Commerz Bank AG. Frankfurt, Germany
Bank of Tokyo Mitsubishi Limited., New Delhi, India
Mashreq Bank, Mumbai, India
Mashreq Bank, New York, USA (For OBU Operation)
Commerz Bank AG. Frankfurt, Germany (For OBU Operation)
ICICI Bank Limited, India (For OBU Operation)
Commerz Bank AG. Frankfurt, Germany (For OBU Operation)
Sub total
Term deposits
Sonali Bank, Kolkata, India
Sub total
Total
2022
Taka
2021
Taka
USD
ACU
USD
USD
USD
ACU
ACU
EUR
AED
EUR
GBP
USD
USD
ACU
USD
ACU
USD
AUD
ACU
JPY
ACU
ACU
ACU
CHF
ACU
EUR
USD
USD
ACU
EUR
1,183,592,032
463,853,910
431,687,041
337,585,977
190,953,045
126,879,482
60,342,676
39,340,890
33,430,728
30,856,777
29,810,622
21,097,892
18,569,819
18,334,221
17,665,841
13,016,517
11,605,975
8,720,373
8,135,896
7,825,817
2,123,841
1,466,556
1,432,633
1,041,684
899,532
223,753
732,885,619
10,206,506
4,482,021
4,421,853
3,812,489,529
(514,386,146)
198,321,705
(435,559,890)
231,104,044
33,000,412
37,786,698
14,085,008
8,637,013
(29,950,059)
38,427,608
69,470,483
4,966,485
12,772,354
12,773,475
55,799,991
722,436
6,146,982
31,228,610
334,054,531
34,786,646
1,190,015
535,439
745,707
198,353
789,658,961
41,825,618
93,944,173
7,827,687
1,080,114,339
ACUD
893,109
893,109
3,813,382,638
741,860
741,860
1,080,856,199
The balances of NOSTRO Accounts are presented as per balance with Correspondent Banks. The unreconciled balances of all NOSTRO
Accounts with an amount of Taka 3,500,731,302 (net off debit and credit) are adjusted with Sundry Creditors (note-15.a.4.1).
Details are shown in Annexure-B.
5.a.3
Maturity grouping of balance with other banks and financial institutions
Payable on demand
Up to 1 month
Over 1 month but not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
6
7
Money at call on short notice
1,517,500,000
24,418,978,023
4,600,000,000
2,099,390,500
89,179,167
32,725,047,690
15,785,071,985
6,369,600,000
550,000,000
89,379,167
22,794,051,152
-
-
52,745,133,490
52,745,133,490
48,091,329,448
48,091,329,448
8,359,816,029
2,724,631,222
2,310,224,238
13,394,671,489
66,139,804,979
6,829,061,460
2,924,875,558
2,744,791,377
12,498,728,395
60,590,057,843
Consolidated Investments
Government securities
The City Bank Limited (note 7.a.1.i)
Others
The City Bank Limited (note 7.a.1.ii)
City Brokerage Limited (note 7.b)
City Bank Capital Resources Limited (note 7.c)
Annual Report 2022
367
Financial Statements 2022
5.a.2
7.a
Investments - The City Bank Limited
Government (note 7.a.1.i)
Others (note 7.a.1.ii)
7.a.1
2022
Taka
2021
Taka
52,745,133,490
8,359,816,029
61,104,949,519
48,091,329,448
6,829,061,460
54,920,390,908
52,740,458,590
4,674,900
52,745,133,490
48,088,849,548
2,479,900
48,091,329,448
3,233,982,981
2,300,000,000
1,945,000,000
780,000,000
100,710,775
122,273
8,359,816,029
61,104,949,519
2,684,307,865
1,000,000,000
2,000,000,000
1,040,000,000
104,631,322
122,273
6,829,061,460
54,920,390,908
45,211,044,840
4,547,571,393
2,981,842,357
4,674,900
8,359,816,029
61,104,949,519
33,616,638,999
8,790,547,857
5,681,662,692
2,479,900
6,829,061,460
54,920,390,908
4,674,900
12,510,627,147
6,301,632,827
21,182,581,863
21,105,432,782
61,104,949,519
2,479,900
13,034,696,661
8,281,816,427
29,572,700,671
4,028,697,249
54,920,390,908
2,987,386,560
946,250,000
250,000,000
1,388,250,000
6,465,552,686
14,765,332,331
17,124,076,012
7,698,323,987
1,115,287,014
52,740,458,590
2,458,937,428
4,000,000,000
1,388,250,000
12,700,123,884
15,668,849,892
9,796,294,020
1,917,300,770
159,093,554
48,088,849,548
Investment securities are classified as follows
i) Government bonds
Government bonds - (note 7.a.4)
Prize bonds
ii) Other investments
Shares (note 7.a.5)
Investment in non convertible bond
Investment in sukuk al istisna'a bond
Investment in subordinated bond
Mutual fund
Debenture of Bangladesh Welding Electrodes Limited
7.a.2
Investment classified as per Bangladesh Bank Circular
Held to maturity (HTM)
Held for trading (HFT)
Reverse repo
Prize bonds
Other securities
Disclosure relating to REPO & Reverse REPO is presented in Annexure - G
7.a.3
Maturity grouping of investments
On demand
Up to 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
7.a.4
Government bills/bonds
Name of the bills/bonds
30 days Bangladesh Bank bills
91 days Treasury bills
182 days Treasury bills
364 days Treasury bills
3 months Islamic bonds
6 months Islamic bonds
5 years Ijarah Sukuk Islamic bonds
2 years Treasury bonds
5 years Treasury bonds
10 years Treasury bonds
15 years Treasury bonds
20 years Treasury bonds
368
Annual Report 2022
Investment in shares
2021
Taka
Quoted
IDLC Finance Limited
British American Tobacco Bangladesh Co. Limited
Beximco Limited
Grameenphone Limited
Olympic Industries Limited
LafargeHolcim Bangladesh Limited
Prime Bank Limited
Square Pharmaceuticals Limited
Marico Bangladesh Limited
IBN SINA Pharmaceutical Industry Limited
Renata Limited
Dhaka Bank Limited
Orion Pharma Limited
Bangladesh Submarine Cable Company Limited
Walton Hi-Tech Industries Limited
Brac Bank Limited
C & A Textiles Limited
Salvo Chemical Industry Limited
Standard Bank Limited
Sea Pearl Beach Resort & SPA Limited
Western Marine Shipyard Limited
Dragon Sweater and Spinning Limited
Mercantile Bank Limited
Paramount Textile Limited
Pubali Bank Limited
Saif Powertec Limited
Alif Manufacturing Company Limited
AB Bank Limited
Alif Industries Limited
Eastern Bank Limited
ACME Pesticides Limited
Genex Infosys Limited
Baraka Power Limited
Delta Brac Housing Finance Corporation Limited
Shinepukur Ceramics Limited
LankaBangla Finance Limited
Rangamati Food Products Limited
Raspit Inc. (BD) Limited
Shahjalal Islami Bank Limited
Islami Commercial Insurance Company Limited
German Bangla Joint Venture Foods Limited
Somorita Hospital Limited
Perfume Chemical Ind. Limited
Baraka Patenga Power Limited
Confidence Cement Limited
Shahjibazar Power Co. Limited
Summit Power Limited
ADN Telecom Limited
Doreen Power Generations and Systems Limited
Robi Axiata Limited
Ifad Autos Limited
United Finance Limited
Jamuna Bank Limited
Linde Bangladesh Limited
Sub-total
1,739,711,057
253,342,417
161,840,000
122,704,351
110,038,344
105,424,546
72,779,578
71,751,600
60,084,680
50,422,684
34,325,294
32,477,425
28,991,144
25,611,300
25,466,444
23,966,250
20,400,510
15,430,162
15,302,514
14,940,481
14,525,368
14,464,943
14,448,762
13,532,365
11,999,007
11,880,000
7,980,000
7,696,329
7,476,000
7,155,000
6,225,940
4,414,500
4,260,000
2,991,959
2,902,500
2,600,000
715,950
695,400
580,826
247,196
75,600
12,442
2,380
3,121,893,248
2,148,583,246
41,377,655
9,636,000
7,110,000
81,497,965
15,001,000
34,445,754
10,505,000
28,720,000
18,064,543
21,640,700
12,227,125
10,189,328
4,760,000
7,710,000
10,844,639
767,550
695,400
641,443
75,600
15,606
1,652
20,626,020
18,285,000
17,342,523
11,670,000
10,437,556
10,170,000
6,920,000
4,730,000
3,694,927
3,042,000
789,900
2,572,218,132
12,041,703
12,041,703
12,041,703
12,041,703
Quoted (Under special fund and investment policy as per DOS Circular no.01/2020)
Shahjibazar Power Co. Limited
Sub-total
Annual Report 2022
369
Financial Statements 2022
7.a.5
2022
Taka
Unquoted ordinary shares
Industrial & Infrastructural Development Finance Company Limited
Venture Investment Partners Bangladesh Limited
KARMA Sangsthan Bank Limited
Central Depository Bangladesh Limited
Sub-total
Total
2022
Taka
2021
Taka
71,770,260
12,000,000
10,000,000
6,277,770
100,048,030
71,770,260
12,000,000
10,000,000
6,277,770
100,048,030
3,233,982,981
2,684,307,865
543,119,683
19,001,000
562,120,683
1,720,605,286
399,375,754
35,790,300
6,739,200
2,724,631,222
543,119,683
19,001,000
562,120,683
1,897,524,090
399,375,754
59,115,831
6,739,200
2,924,875,558
Details are shown in Annexure-C.
7.b
Investments - City Brokerage Limited
Membership (note 7.b.1)
Dhaka Stock Exchange Limited (DSE)
Chittagong Stock Exchange Limited (CSE)
Investment in listed share
Investment of special fund
Investment of ICB fund
Investments in unlisted securities
7.b.1
Membership fees is the amount paid by the company to obtain membership of DSE and CSE.
7.b.2
This represents investment made by the City Brokerage Limited in purchase of shares of various companies listed in Dhaka Stock
Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) through its dealer account. Cost price of the investment is Taka
1,868,218,208 (2021: 1,906,571,602) as on 31 December 2022.
7.c
Investments - City Bank Capital Resources Limited
Investments in quoted shares (note 7.c.1)
Investment in Sukuk Al Istisna'a Bond
Investments in unlisted securities
2,057,026,563
222,500,000
30,697,675
2,310,224,238
2,464,093,702
250,000,000
30,697,675
2,744,791,377
7.c.1
This represents investment made by the City Bank Capital Resources Limited in purchase of shares of various companies listed in Dhaka
Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) through its dealer account. Cost price of the investment is
Taka 1,782,170,327 (2021: 1,705,788,575) as on 31 December 2022.
8
Consolidated Loans and advances/investments
Loans/investments, cash credits, overdrafts, etc.
The City Bank Limited (note 8.a.1)
City Brokerage Limited (note 8.b)
City Bank Capital Resources Limited (note 8.c)
City Hong Kong Limited
Mutual indebtedness:
Loan from The City Bank Limited - City Brokerage Limited
Loan from The City Bank Limited - CBL Money Transfer Sdn. Bhd.
Loan from The City Bank Limited - City Hong Kong Limited
Bills purchased and discounted
The City Bank Limited (note 8.a.2)
City Hong Kong Limited
8.a
284,109,052,056
1,172,062,257
1,376,524,399
286,657,638,712
(374,017,003)
(140,797,485)
(922,008,194)
(1,436,822,682)
353,838,489,476
(660,475,543)
(109,372,511)
(314,373,108)
(1,084,221,162)
285,573,417,550
1,987,742,717
468,396,175
2,456,138,892
356,294,628,368
2,270,626,420
472,758,616
2,743,385,036
288,316,802,586
352,785,943,537
1,987,742,717
354,773,686,254
284,109,052,056
2,270,626,420
286,379,678,476
Loans and advances/investments - The City Bank Limited
Loans/investments, cash credits, overdrafts, etc. (note 8.a.1)
Bills purchased and discounted (note 8.a.2)
370
352,785,943,537
1,049,490,663
1,103,628,010
336,249,948
355,275,312,158
Annual Report 2022
Loans/investments, cash credits, overdrafts, etc.
Inside Bangladesh
Industrial credit
Small and medium enterprise loans
Export development fund
Personal finance
Cash credit
Credit card
Secured overdraft
Hire purchase shirkatul melk
House building loans
Auto loan
Bai - murabaha
Staff loan (note 8.a.15)
Bai - salam
Loan against payroll
Nano lending
Transportation loans
Musharaka
Loans against trust receipt
Startup loan
Payment against document
Outside Bangladesh
8.a.2
109,546,214,813
92,434,364,859
34,817,905,659
33,828,716,763
20,780,317,501
13,674,557,373
11,816,329,030
10,606,918,288
7,974,940,799
4,194,636,507
3,864,444,839
3,463,222,733
2,803,856,401
1,468,096,974
173,841,692
149,732,212
68,296,950
55,555,381
1,189,084
351,723,137,858
1,062,805,679
352,785,943,537
92,850,428,952
66,619,711,431
29,842,314,154
28,132,485,877
22,108,396,152
12,650,824,273
7,724,233,254
4,392,583,595
8,159,555,220
2,894,979,518
2,017,761,063
3,506,573,837
1,114,294,579
1,160,373,005
23,904,931
338,989,861
40,061,000
90,536,786
17,298,950
283,685,306,438
423,745,618
284,109,052,056
1,165,874,955
1,524,635,192
821,867,762
1,987,742,717
745,991,228
2,270,626,420
354,773,686,254
(13,671,498,996)
341,102,187,258
286,379,678,476
(13,906,126,311)
272,473,552,165
13,906,126,311
7,235,323,973
(7,469,951,288)
13,671,498,996
10,850,128,128
7,001,598,042
(3,945,599,859)
13,906,126,311
17,356,716,442
97,660,443,110
83,048,919,857
108,363,491,608
48,344,115,237
354,773,686,254
11,552,246,346
67,941,759,963
68,511,840,347
93,316,885,667
45,056,946,153
286,379,678,476
298,602,119,965
20,780,317,501
33,403,506,071
352,785,943,537
1,987,742,717
354,773,686,254
228,051,598,359
22,108,396,152
33,949,057,545
284,109,052,056
2,270,626,420
286,379,678,476
Bills purchased and discounted
Payable Inside Bangladesh
Inland bills purchased
Payable Outside Bangladesh
Foreign bills purchased and discounted
8.a.3
2021
Taka
Performing loans and advances/investments
Gross loans and advances/investments
Non-performing loans and advances/investments (note 8.a.3.1)
8.a.3.1 Non-performing loans and advances/investments
Opening balance
Addition during the year
Reduction during the year
Closing balance
8.a.4
Residual maturity grouping of loans and advances/investments
including bills purchased and discounted
Repayable on demand
Not more than 3 months
More than 3 months but not more than 1 year
More than 1 year but not more than 5 years
More than 5 years
8.a.5
Loans and advances/investments
Loans
Cash credits
Overdrafts
Bills purchased and discounted (note 8.a.2)
Annual Report 2022
371
Financial Statements 2022
8.a.1
2022
Taka
8.a.6
Concentration of loans and advances/investments including bills purchased and discounted
Industrial loans and advances/investments
Advances to customer groups
Others loans and advances/investments
Advances chief executive and other senior executives
Advances to allied concerns of directors
8.a.7
Business segment wise concentration of loans and advances/ investments including
bills purchased and discounted
Corporate
Retail
SME (including agriculture loan and microcredit)
Off-shore Banking Unit (OBU)
Staff loan (note 8.a.15)
8.a.8
2022
Taka
Cluster base CMSME Fiancing
2021
Taka
278,179,344,383
56,310,921,795
19,965,111,521
314,535,430
3,773,125
354,773,686,254
222,126,748,561
48,103,900,766
15,907,693,405
236,650,744
4,685,000
286,379,678,476
170,669,740,864
71,160,966,603
69,689,139,276
39,790,616,778
3,463,222,733
354,773,686,254
139,069,812,552
57,468,493,794
52,707,229,491
33,627,568,802
3,506,573,837
286,379,678,476
In compliance with Bangladesh Bank SMESPD circular no. 05 dated 14 August 2022, the bank has already adopted cluster financing
policy for CMSME loan. As per the policy difined cluster wise outstanding as on December 31, 2022 was:
High priority cluster financing
Agro/food processing and agri machinery manufacturing
Light engineering
Ready made garments (RMG), knitwear, designe & personal wear
Leather & leather goods
70,765,418
50,946,486
35,859,393
8,656,349
166,227,646
Priority cluster financing
Furniture
Plastic industry & other synthetics
Home textile
Automobile manufacturing & repairing
Toys
Tant & handicrafts
8.a.9
43,029,360
32,540,933
15,807,718
3,652,231
2,275,394
2,143,907
99,449,543
265,677,189
Sector wise concentration of loans and advances/investments including bills purchased and discounted
% of total loan
Readymade garments industry
Consumer credit
Trade service
Other manufacturing industry
Energy and power industry
Textile & spinning mills
Real estate financing
Agri & micro-credit through NGO
Steel industry
Assembling industry
Service industry
Construction
Pharmaceuticals industry
Edible oil and food processing
Others
Transport, storage & communication
Chemical industry
Ship breaking & building
Hospitals
372
Annual Report 2022
16.98%
16.56%
14.22%
11.35%
10.48%
4.88%
4.83%
4.53%
3.12%
2.75%
2.71%
2.40%
1.53%
0.93%
0.81%
0.66%
0.58%
0.52%
0.14%
100.00%
2022
Taka
% of total loan
60,249,132,914
58,752,408,734
50,465,523,039
40,266,080,664
37,192,113,065
17,318,281,335
17,152,466,026
16,063,339,200
11,071,850,265
9,746,027,990
9,607,065,335
8,527,217,046
5,416,483,192
3,309,664,016
2,871,692,089
2,342,120,164
2,051,968,784
1,857,527,422
512,724,974
354,773,686,254
19.52%
16.96%
11.36%
7.36%
13.37%
5.09%
4.88%
3.20%
4.09%
2.58%
3.06%
0.85%
1.57%
1.29%
2.94%
0.81%
0.39%
0.49%
0.19%
100.00%
2021
Taka
55,895,474,394
48,579,926,597
32,541,741,752
21,076,445,319
38,294,817,873
14,585,478,183
13,981,724,944
9,150,568,326
11,714,170,336
7,400,704,223
8,764,792,801
2,422,311,500
4,487,092,257
3,687,538,755
8,427,189,589
2,310,004,701
1,112,039,937
1,405,809,673
541,847,316
286,379,678,476
2022
2021
Taka
% of total loan
Taka
79.34%
9.81%
2.64%
2.49%
0.85%
0.46%
0.50%
0.24%
96.33%
281,484,355,518
34,815,701,442
9,371,563,343
8,835,153,968
3,000,980,959
1,637,055,178
1,770,119,001
842,457,758
341,757,387,167
78.76%
10.54%
2.76%
2.32%
0.97%
0.44%
0.44%
0.17%
96.40%
225,566,565,973
30,174,864,531
7,900,926,846
6,637,105,924
2,775,099,921
1,249,251,525
1,270,232,443
482,555,307
276,056,602,470
2.63%
0.43%
0.18%
0.07%
0.06%
3.37%
99.70%
0.30%
100.00%
9,333,758,695
1,526,293,715
636,501,683
258,757,936
198,181,379
11,953,493,408
353,710,880,575
1,062,805,679
354,773,686,254
2.64%
0.49%
0.20%
0.09%
0.05%
3.46%
99.85%
0.15%
100.00%
7,558,920,878
1,390,988,012
570,534,817
247,385,456
131,501,225
9,899,330,388
285,955,932,858
423,745,618
286,379,678,476
100.00%
100.00%
354,773,686,254
354,773,686,254
100.00%
100.00%
286,379,678,476
286,379,678,476
2022
Taka
2021
Taka
8.a.10 Geographical location-wise loans and advances/investments
Inside Bangladesh
Urban:
Dhaka
Chattogram
Rajshahi
Khulna
Rangpur
Sylhet
Barishal
Mymensingh
Rural:
Dhaka
Chattogram
Rajshahi
Sylhet
Khulna
Total inside Bangladesh
Outside Bangladesh
Grand total
8.a.11 Sector-wise loans and advances
Public sector
Private sector
8.a.12 Securities against loans/investments including bills purchased and discounted
Collateral of movable/immovable assets
Local banks and financial institutions guarantee
Foreign banks guarantee
Export documents
Fixed deposit receipts (FDR)
FDR of other banks
Government guarantee
Personal guarantee
Other securities
142,423,212,772 113,517,967,610
1,987,742,717
2,270,626,421
573,367,491
94,941,316
61,292,733,033 56,663,555,899
7,718,397,453
6,258,046,137
31,121,737
115,481,420,258 84,642,890,918
25,265,690,793 22,931,650,175
354,773,686,254 286,379,678,476
8.a.13 Detail of large loan/investments
As at 31 December 2022 there were 41 (31 December 2021: 36) borrowers or group with whom amount of outstanding loans and
advances/investments exceeded 10% of the total capital of the Bank. Total capital of the Bank was Taka 52,199.65 million as at 31
December 2022 (Taka 43,213.33 million as at 31 December 2021).
Number of borrowers or groups
Amount of funded outstanding advances/investments (Taka)
Amount of non funded outstanding advances/investments (Taka)
Amount of classified advances/investments therein (Taka)
41
36
95,823,694,179 63,867,612,993
116,205,103,254 122,247,699,491
-
8.a.14 Particulars of loans and advances/investments
i)
ii)
iii)
iv)
v)
vi)
Loans/investments considered good in respect of which the Bank is fully secured
Loans/investments considered good against which the Bank holds no security other than
the debtors’ personal guarantee
Loans/investments considered good secured by the personal undertaking of one or more
parties in addition to the personal guarantee of the debtors
Loans/investments adversely classified; provision not maintained there against
Loans/investments due by directors or officers of the banking company or any of them
either separately or jointly with any other persons
Loans/investments due from companies or firms in which the directors of the Bank have
interest as directors, partners or managing agents or in case of private companies as
members
214,026,575,203 178,805,137,383
115,481,420,258
84,642,890,918
25,265,690,793 22,931,650,175
354,773,686,254 286,379,678,476
3,466,995,858
3,511,258,837
-
-
Annual Report 2022
373
Financial Statements 2022
% of total loan
vii) Maximum total amount of advances/investments, including temporary advances made at
any time during the year to directors or managers or officers of the banking company or any
of them either separately or jointly with any other person.
viii) Maximum total amount of advances/investments, including temporary advances/
investments granted during the year to the companies or firms in which the directors of
the banking company have interest as directors, partners or managing agents or in the case
of private companies, as members
ix) Due from other banking companies
x) Classified loans and advances/investments
(a) Classified loans and advances/investments on which interest has not been charged
Increase of specific provision
Amount of loans written off
Amount realised against loans previously written off
(b) Provision on classified loans and advances/investments
(c) Provision kept against loans/investments classified as bad debts
(d) Interest credited to Interest Suspense Account
xi) Cumulative amount of written off loans/investments
Opening balance
Amount written off during the year
Amount realised against loans/investments previously written off
Amount written off waived/adjustment
Closing balance
The amount of written off/classified loans/investments
for which law suits have been filed
2022
Taka
2021
Taka
3,466,995,858
3,511,258,837
-
-
-
-
10,567,670,332
(150,945,975)
1,920,411,060
550,935,652
5,450,840,130
4,959,120,081
6,504,273,960
11,392,951,608
1,668,660,109
1,669,245,005
885,001,684
5,601,786,105
5,318,776,990
5,288,901,522
18,369,612,949
1,920,411,060
(550,935,652)
(80,007,311)
19,659,081,046
18,379,452,887
1,669,245,005
(885,001,684)
(794,083,259)
18,369,612,949
42,649,816,000
39,389,200,000
2,298,178,324
717,301,097
375,812,131
71,931,181
3,463,222,733
2,389,109,608
670,285,470
376,404,009
70,774,750
3,506,573,837
8.a.15 Staff loan
House building scheme
Provident fund
Vehicle scheme
Consumer credit and other scheme
2022
8.a.16 Classification of loans and advances/investments
Unclassified
Standard including staff loan
Special mention account (SMA)
Classified
Sub-standard
Doubtful
Bad/Loss
Taka
% of total loan
Taka
95.19%
0.96%
96.15%
337,694,273,410
3,407,913,848
341,102,187,258
94.47%
0.68%
95.14%
270,529,465,286
1,944,086,879
272,473,552,165
0.62%
0.26%
2.98%
3.85%
100.00%
2,183,267,276
920,561,388
10,567,670,332
13,671,498,996
354,773,686,254
0.62%
0.25%
3.98%
4.86%
100.00%
1,786,057,364
727,117,339
11,392,951,608
13,906,126,311
286,379,678,476
2022
Taka
2021
Taka
8.a.17 Particulars of required provision for loans and advances/investments
General provision on unclassified loans
Loans/investments (excluding SMA)
Special General Provision-COVID-19
Special mention account (SMA)
Required provision for unclassified loans and advances/investments
A. Total provision maintained for unclassified loans and advances/investments
B. Excess provision
374
Annual Report 2022
2021
% of total loan
4,284,939,367
815,625,279
30,608,726
5,131,173,372
6,910,907,396
1,779,734,024
3,151,617,796
838,539,727
17,636,620
4,007,794,143
4,972,881,737
965,087,594
2022
% of required
provision
Sub-standard
1,401,017,429
Doubtful
492,305,509
Bad/Loss
4,855,947,039
Required provision for classified loans and advances/investments
C. Total provision maintained for classified loans and advances/investments
D. Excess provision
5% - 20%
5% - 50%
100%
Total required provision for loans and advances/investments
Total provision maintained for loans and advances/investments (A+C)
Total excess provision (B+D)
8.a.18 During the year 2022, no loan having outstanding Taka 500 crore or more was restructured.
8.b
Loans and advances/investments - City Brokerage Limited
8.c
Required
provision
Taka
2021
Required
provision
Taka
236,249,204
201,809,420
4,959,120,081
5,397,178,704
5,450,840,130
53,661,426
144,360,905
116,743,171
5,318,776,990
5,579,881,066
5,601,786,105
21,905,039
10,528,352,076
12,361,747,526
1,833,395,450
9,587,675,209
10,574,667,842
986,992,633
Margin loan was given to several individuals and institutions for doing share trading business through City Brokerage Limited.
Loans and advances/investments - City Bank Capital Resources Limited
Margin loan was given to several individuals and institutions for doing share trading business through City Bank Capital Resources Limited.
9
Bills purchased and discounted (note 8.a.2)
Payable in Bangladesh
Payable outside Bangladesh
9.1
Consolidated fixed assets including premises, furniture and fixtures
The City Bank Limited (note 10.a)
City Brokerage Limited (note 10.b)
City Bank Capital Resources Limited (note 10.c)
CBL Money Transfer Sdn. Bhd. (note 10.d)
City Hong Kong Limited (note 10.e)
Inter-company transactions
City Brokerage Limited with The City Bank Limited
City Bank Capital Resources Limited with The City Bank Limited
10.a
2021
Taka
1,165,874,955
821,867,762
1,987,742,717
1,524,635,192
745,991,228
2,270,626,420
715,987,944
299,250,133
786,423,522
186,081,118
1,987,742,717
1,051,305,012
1,094,087,743
89,668,652
35,565,013
2,270,626,420
9,749,161,523
377,458,984
1,166,353,917
89,131,311
1,085,189
11,383,190,924
6,464,783,605
353,022,225
973,689,678
75,506,459
5,804,095
7,872,806,062
(168,997,000)
(276,812,532)
10,937,381,392
(193,139,428)
(276,812,532)
7,402,854,102
300,373,236
1,790,203,136
224,529,249
1,243,606,521
80,213,803
3,501,842,589
409,178,437
956,420,830
133,139,660
351,505,075
7,046,485,597
16,037,498,133
(6,288,336,610)
9,749,161,523
300,373,236
1,789,452,122
89,785,716
1,151,900,354
22,424,036
2,817,927,230
376,315,161
712,732,404
85,860,911
372,566,735
3,990,078,600
11,709,416,505
(5,244,632,900)
6,464,783,605
Maturity grouping of bills purchased and discounted
Payable within one month
Over one month but less than three months
Over three months but less than six months
Six months or more
10
2022
Taka
Fixed assets including premises, furniture and fixtures - The City Bank Limited
Cost
Land
Building
Work in progress (Building)
Furniture and fixtures
Work in progress (Furniture and fixtures)
Office equipment and machinery
Work in progress (Office equipment and machinery)
Software
Work in progress (Software)
Bank's vehicles
Right of use assets
Accumulated depreciation and amortisation
Written down value
Total un-adjusted work-in-progress (WIP) balance for more than 1 year as of December 31, 2022 was Taka 250,463,880. Out of which,
Taka 91,769,091 is related to land and building of different locations where legal issues are underway. However, all the lands and
buildings are under the possession of the Bank. In addition, Taka 157,692,789 is related to IT Hardware, Software, Equipment for which
phase/partial payments have been made to vendors against goods and services. Provision has been kept for remaining amount i.e. Taka
1,002,000 against items which were in WIP for more than 2 (two) years.
See Annexure - D for details.
Annual Report 2022
375
Financial Statements 2022
Specific provision on classified loans
Base for
provision
Taka
10.b
Fixed assets including premises, furniture and fixtures - City Brokerage Limited
Cost
Land and Building
Office equipment and machinery
Furniture and fixtures
Software
Work in progress (Software)
Vehicles
Right of use assets
10.c
Accumulated depreciation and amortisation
Written down value
Fixed assets including premises, furniture and fixtures - City Bank Capital Resources Limited
Cost
Land and building (including capital work in progress)
Vehicle
Furniture and fixtures
Office equipment and machinery
Software
Right of use assets
Accumulated depreciation and amortisation
Written down value
10.d
Accumulated depreciation
Written down value
Accumulated depreciation
Written down value
292,849,538
60,944,276
33,083,406
6,334,236
35,524,572
17,720,770
51,531,751
497,988,549
(144,966,324)
353,022,225
1,101,578,267
43,028,285
24,879,382
14,816,127
28,979,565
1,213,281,626
(46,927,709)
1,166,353,917
937,144,176
42,236,899
7,973,337
10,629,162
2,200,000
12,648,636
1,012,832,210
(39,142,532)
973,689,678
33,065,244
26,544,826
4,981,791
8,538,418
78,801,046
151,931,325
(62,800,014)
89,131,311
28,304,462
22,673,361
4,374,640
68,651,769
124,004,232
(48,497,773)
75,506,459
2,301,132
827,338
3,128,470
(2,043,281)
1,085,189
1,910,502
686,893
4,383,644
6,981,039
(1,176,944)
5,804,095
15,808,243,910
425,666,992
126,424,326
5,420,614,555
18,438,569
21,799,388,352
40,060,717
15,335,299,156
512,090,856
234,735,476
4,442,637,360
5,561,566
20,530,324,414
35,191,762
(189,868)
(1,104,075)
(2,864,671)
(6,116,684,941)
(6,120,843,555)
15,718,605,514
(128,819)
(3,483,248)
(2,798,992)
(6,360,564)
(6,116,684,941)
(6,129,456,564)
14,436,059,612
Consolidated other assets
The City Bank Limited (note 11.a)
City Brokerage Limited (note 11.b)
City Bank Capital Resources Limited (note 11.c)
CBL Money Transfer Sdn. Bhd. (note 11.d)
City Hong Kong Limited (note 11.e)
Goodwill arising on investment in subsidiaries
Mutual indebtedness:
Payable to City Bank Limited - City Brokerage Limited
Payable to City Bank Limited - City Bank Capital Resources Limited
Payable to City Bank Capital Resources Limited - City Brokerage Limited
Payable to CBL Money Transfer Sdn. Bhd. - City Bank Limited
Investment in subsidiaries
Adjustments for consolidation - City Brokerage Limited
376
292,849,538
62,162,324
33,134,531
59,572,018
17,720,770
67,417,635
532,856,816
(155,397,832)
377,458,984
Fixed assets including premises, furniture and fixtures - CBL Hong Kong Limited
Cost
Office equipment and machinery
Furniture and fixtures
Right of use assets
11
2021
Taka
Fixed assets including premises, furniture and fixtures - CBL Money Transfer Sdn. Bhd.
Cost
Furniture and fixtures
Office equipment and machinery
Vehicle
Software
Right of use assets
10.e
2022
Taka
Annual Report 2022
Other assets- The City Bank Limited
Income generating other assets
Investment in subsidiaries (note 11.a.1)
Interest income receivable (note 11.a.2)
Non income generating other assets
Accounts receivables (note 11.a.3)
Advance payment of tax (note 11.a.4)
Deferred tax assets (note 11.a.5)
Intangible assets (note 11.a.6)
Prepaid expenses
Security deposits
Stationery and stamps
Receivable from provident fund
Advance against rent
Receivable from City Brokerage Limited
2021
Taka
6,116,684,941
3,372,221,217
6,116,684,941
2,342,698,442
2,741,610,521
1,915,247,248
1,087,421,545
269,139,272
230,447,628
59,488,638
12,741,490
3,241,410
15,808,243,910
1,662,126,093
3,430,137,277
1,128,705,683
268,635,646
189,686,444
66,763,216
18,562,493
66,257,624
45,038,957
2,340
15,335,299,156
3,400,000,000
2,550,000,000
5,950,000,000
3,400,000,000
2,550,000,000
5,950,000,000
99,702,332
66,982,609
166,684,941
6,116,684,941
99,702,332
66,982,609
166,684,941
6,116,684,941
1,049,462,109
1,314,802,359
391,125,397
366,869,158
249,962,194
3,372,221,217
880,840,729
808,548,887
404,439,430
227,727,952
21,141,444
2,342,698,442
1,662,371,513
362,144,135
358,491,975
203,187,913
104,299,383
27,834,629
10,252,344
8,691,904
4,336,725
2,741,610,521
723,785,505
301,349,466
408,810,715
46,960,659
139,191,983
26,491,503
200,997
8,691,904
6,643,361
1,662,126,093
3,430,137,277
3,807,605,135
(5,322,495,164)
1,915,247,248
1,473,884,970
1,956,252,307
3,430,137,277
1,087,421,545
1,128,705,683
11.a.1 Investment in subsidiary
In Bangladesh
City Brokerage Limited
City Bank Capital Resources Limited
Outside Bangladesh
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
11.a.2 Interest income receivable
Interest receivable from government security
Interest receivable from loans & advances
Interest receivable from stimulus package
Interest receivable from placement
Interest receivable from private bond
11.a.3 Accounts receivables
Receivable against card operation
Receivable against encashment -SP/BSP/PSC
Advance against remittance
Sundry debtors
Advance to vendor for expense
Receivable against fraud forgeries
Receivable against sales proceeds of shares
Unreconciled nostro entry
Advance to staff for expense
11.a.4 Advance payment of tax
Opening balance
Paid during the year
Adjustment for previous years tax liability
Closing balance
11.a.5 Deferred tax assets
Deferred tax asset
Annual Report 2022
377
Financial Statements 2022
11.a
2022
Taka
Detail calculation on deferred tax assets:
Book value
Taka
Fixed assets
3,663,643,476
Unrealised gain on share
4,343,413
Provision against classified loan
(1,689,389,064)
Right of use of assets
3,736,856,522
Lease obligation
(3,971,115,428)
Deferred tax liability/(asset) arise due to actuarial valuation (118,717,741)
Deferred tax liability/(asset) arise from remeasurement (loss)(OCI) (488,633,640)
Deferred tax liability/(asset)
Deferred tax asset up to last year
Deferred tax (income)/expense
Less: Deferred tax (income)/expense recognised through retained earnings
Deferred tax (income)/expense recognised through profit & loss
11.a.6 Intangible assets
Users license
Royalty
Tax base
Taka
4,033,593,154
-
Taxable/
(deductible)
temporary
difference
Taka
(369,949,678)
4,343,413
(1,689,389,064)
3,736,856,522
(3,971,115,428)
(118,717,741)
(488,633,640)
2022
Taka
Deferred tax
(assets) / liability
Taka
(138,731,129)
434,341
(633,520,899)
1,401,321,196
(1,489,168,286)
(44,519,153)
(183,237,615)
(1,087,421,545)
(1,128,705,683)
41,284,138
(183,237,615)
224,521,753
2021
Taka
152,081,751
117,057,521
269,139,272
124,130,409
144,505,237
268,635,646
268,635,646
167,417,437
(166,913,811)
269,139,272
186,242,966
199,539,734
(117,147,054)
268,635,646
336,849,733
59,299,076
18,533,491
6,234,692
4,750,000
425,666,992
425,889,582
36,616,269
15,634,808
11,912,697
22,037,500
512,090,856
39,600,158
38,059,756
19,314,854
17,292,150
6,877,318
5,277,550
2,540
126,424,326
117,807,441
42,510,130
67,979,025
2,059,079
4,377,261
2,540
234,735,476
5,395,213,430
15,538,889
9,862,236
5,420,614,555
4,426,101,901
7,879,277
8,656,182
4,442,637,360
12,298,920
4,422,309
1,717,340
18,438,569
3,049,019
1,086,735
1,425,812
5,561,566
11.a.6.1 Movement of intangible assets
Opening balance
Addition during the year
Amortisation during the year
Closing balance
11.b
Other assets - City Brokerage Limited
Advance payment of tax
Advances, deposits and prepayments
Dividend receivable
Receivable from DSE
Advance for IPO
11.c
Other assets - City Bank Capital Resources Limited
Advance income tax
Account receivable
Advances, deposits and prepayments
Deferred tax assets
Balance with brokerage house
Dividend receivable
Stamps in hand
11.d
Other assets - CBL Money Transfer Sdn. Bhd.
Prefunding for settlement
Advance income tax
Advances, deposits and prepayments
11.e
Other assets - City Hong Kong Limited
Interest receivables against bills purchased & loan
Receivable from customers
Security deposit
378
Annual Report 2022
Non - banking assets
The City Bank Limited has been awarded absolute ownership on 41 mortgage properties through verdict of honourable Court under
section 33 (7) of Artha Rin Adalat Ain, 2003.Theses have been recorded at Taka 662,550,998 as non-banking assets.
Name of Parties
Type of assets
Booking Date
Year of
holding
2022
Taka
2021
Taka
M/S Overseas Liner Agency
953 decimal land
29/Dec/11
11 Years
11,436,000
M/S Habib Bastra Bitan
16.50 decimal land
29/Dec/11
11 Years
1,485,000
1,485,000
M/S Silva Synthetic Fabrics
67.5 decimal land in Narayangonj
27,017,500
27,017,500
L.J.S Enterprise
181.96 decimal land
29/Dec/11 & 11 & 7
29/Dec/15
Years
29/Dec/11 11 Years
3,677,959
3,677,959
M/S Sikder Construction
14 decimal land
29/Dec/11
10 Years
12,131,206
12,131,206
M/s. Nan Business Associates
5 decimal land & 1,518 sft floor
27/Dec/12
10 Years
8,340,000
8,340,000
Shibpur Rice Mill
150.75 decimal land
27/Dec/12
10 Years
2,563,633
2,563,633
M/s. Chand & Sons
6.60 decimal land
10/Oct/13
9 Years
1,850,139
1,850,139
M/s. Ashraf Traders
12 decimal land
20/Oct/13
9 Years
3,352,735
3,352,735
M/s. Rafique Repairing & Motor
Machinery Parts
Friends International
8 decimal land along with two storied
building
225.35 decimal land
20/Oct/13
9 Years
1,371,088
1,371,088
3/Mar/14
8 Years
14,888,087
14,888,087
M/s General Services
375.5 decimal land
20/Dec/15
7 Years
2,074,764
2,074,764
M/s Galeeb International
8.25 decimal land
22/Dec/15
7 Years
3,507,045
3,507,045
M/s Balaka Industries
7 katha land
22/Dec/15
7 Years
6,390,367
6,390,367
Alif Builders & Co.
4.51 decimal land
22/Dec/15
7 Years
13,647,649
13,647,649
M/s Alamin Engineering
2.50 katha and 8.25 decimal land
23/Dec/15
7 Years
2,340,929
2,340,929
M/s S S Poultry Feed
12.32 decimal land
23/Dec/15
7 Years
4,292,867
4,292,867
M/s Sathi Foods & Oil Industries 15 decimal land
23/Dec/15
7 Years
10,683,879
10,683,879
M/s MIM Pictures International
51.5 decimal land
24/Dec/15
7 Years
1,763,421
1,763,421
M/s Shaans Denim
1670 sft flat
24/Dec/15
7 Years
34,880,000
34,880,000
M/s Apparel King Limited
16.34 decimal land
24/Dec/15
7 Years
7,189,924
7,189,924
M/s Suchi Enterprise
50.24 decimal land
24/Dec/15
7 Years
3,602,354
3,602,354
M/s A B Traders
3.63 acre land
24/Dec/15
7 Years
899,503
899,503
M/s The Media Advertising
17.50 decimal and 5 katha land
24/Dec/15
7 Years
1,627,948
1,627,948
M/s Mondira Medico
12.20 decimal and 3 acre land
24/Dec/15
7 Years
4,496,291
4,496,291
M/s. Nan Business Associates
256 decimal land
28/Dec/15
7 Years
55,181,250
55,181,250
M/s Tajco Limited
1.60 acre land
30/Dec/15
7 Years
15,049,194
15,049,194
Atlas food and Beverage Limited 233.68 decimal land
29/Jun/16
6 Years
65,366,934
65,366,934
Sristy Traders
21.50 decimal land
29/Jun/16
6 Years
26,322,125
26,322,125
Rafty Sweaters Limited
100 decimal land and 02 storied building
measuring -+42,000 sft
14.56 decimal and 30 decimal land
29/Dec/16
6 Years
71,140,000
71,140,000
21/Jun/17
5 Years
17,592,323
17,592,323
30/Dec/17
5 Years
21,055,559
21,055,559
M/s. Noor Enterprise
4.587 decimal land with building and
4.125 decimal land
84.87 decimal land
30/Dec/17
5 Years
80,034,010
80,034,010
M/s. McCoy Knitwear
22.50 decimal land and 5.00 decimal land 30/Dec/17
5 Years
2,625,000
2,625,000
M/s. Rupchanda Food Products
21 decimal land
30/Dec/17
5 Years
1,680,000
1,680,000
M/s. Unique Steel
75.5 decimal land
30/Dec/17
5 Years
36,476,810
36,476,810
Mohd. Elias Bros (Pvt.) Limited
18.92 decimal land
69,300,000
Saleh Fashion Limited
M/S Hasnat Enterprise
11,436,000
28/Jun/18
4 Years
69,300,000
M/s Momin Monu Auto Rice Mill 117.50 decimal land at Jamalpur
28/Jun/18
4 Years
9,400,000
9,400,000
S. M Enterprise
26/Dec/18
4 Years
667,555
98,642,429
S. K. Motors
94.32 decimal land with 3 storied
commercial building
29.30 decimal and 27.69 decimal land
27/Dec/18
4 Years
-
23,238,000
M/s Rabeya Bastraly
7.0 decimal and 5.5 decimal land
27/Dec/18
4 Years
2,853,626
2,853,626
Emdadul Haque Bhuiyan
10.90 decimal land
30/Jun/19 &
29/Dec/19
3 Years
2,296,324
2,296,324
662,550,998
783,763,872
Annual Report 2022
379
Financial Statements 2022
12
13
Bond
Tier-II subordinated bond (note-13.01)
Perpetual bond - additional Tier-I capital (note-13.02)
2022
Taka
12,225,000,000
4,000,000,000
16,225,000,000
2021
Taka
7,690,000,000
4,000,000,000
11,690,000,000
13.01 Tier-II subordinated bond
Tier-II Subordinated bond includes funds raised from several banks, financial institutions and other organisations through issuance of
3 (Three) Bonds during 2017, 2018-19 and 2022 worth Taka 5,000 million, Taka 4,200 million and Taka 7,000 million respectively. The
latest (4th) subordinated bond’s subscription was completed in June 2022.
The outstanding amount of the three subordinated bonds as on 31 December 2022 are Taka 2,625 million, Taka 2,600 million and Taka
7,000 million respectively, totalling Taka 12,225 million. Institution wise subscription towards the bonds are:
City Bank 2nd subordinated bond
ONE Bank Limited
Rupali Bank Limited
Janata Bank Limited
Sonali Bank Limited
Pubali Bank Limited
Mercantile Bank Limited
Uttara Bank Limited
Dhaka Stock Exchange Limited
Agrani Bank Limited
Dhaka Bank Limited
Standard Bank Limited
City Bank 3rd subordinated bond
ONE Bank Limited
Sonali Bank Limited
Agrani Bank Limited
Dhaka Bank Limited
Pubali Bank Limited
City Bank 4th subordinated bond
Agrani Bank Limited
Janata Bank Limited
Sonali Bank Limited
Mercantile Bank Limited
National Life Insurance Company Limited
Simanto Bank Limited
525,000,000
420,000,000
393,750,000
262,500,000
262,500,000
210,000,000
183,750,000
157,500,000
105,000,000
52,500,000
52,500,000
2,625,000,000
850,000,000
680,000,000
637,500,000
425,000,000
425,000,000
340,000,000
297,500,000
255,000,000
170,000,000
85,000,000
85,000,000
4,250,000,000
780,000,000
600,000,000
600,000,000
320,000,000
300,000,000
2,600,000,000
1,040,000,000
800,000,000
800,000,000
400,000,000
400,000,000
3,440,000,000
2,600,000,000
2,000,000,000
1,000,000,000
650,000,000
500,000,000
250,000,000
7,000,000,000
12,225,000,000
7,690,000,000
13.02 Perpetual bond (Additional tier-I capital)
City Bank launched subscription of the first ever Perpetual Bond in the industry as well as the country. The issuance process of “City
Bank Perpetual Bond” was initiated back in 2019 and with subsequent approvals from the regulators, the bank has already completed
subscription of Taka 4,000 million 2021. The bond also became listed in the Stock Exchanges in June 2022. At the end of December 2022,
the listed bonds were held by 4 individuals and 6 institutional investors. Summary of basic features of the bonds are:
Coupon rate: Reference rate plus coupon margin
Here, reference rate is the latest available 20 years treasury bond rate (Standard Tenor Yield) as published by Debt Management
Department of Bangladesh Bank on the quotation day and coupon margin is 2%.
Coupon range: 6.0% to 10.0%.
In accordance with Bangladesh Bank guidelines and instructions, coupons of the perpetual bond are being paid out of distributable items;
i.e. retained earnings of the bank
Contingent convertible feature: This bonds are contingent convertible and this conversion will only be executed if the Bank’s consolidated
common equity Tier-I (CET-I) falls & stays below 4.5% for three consecutive quarters and the conversion amount will be to the extent of
shortfall amount for reaching CET-I @ 4.5%.
Perpetual bond (Additional tier-I capital)
4,000,000,000
4,000,000,000
14
Consolidated borrowings from other banks, financial institutions and agents
The City Bank Limited (note 14.a)
City Brokerage Limited (note 14.b)
City Bank Capital Resources Limited (note 14.c)
CBL Money Transfer Sdn. Bhd. (note 14.d)
City Hong Kong Limited (note 14.e)
380
Annual Report 2022
82,390,242,355
679,836,859
738,983,030
95,678,000
922,008,320
84,826,748,564
54,895,161,717
700,809,394
1,008,816,688
91,788,758
314,373,064
57,010,949,621
14.a
2021
Taka
(374,017,003)
(140,797,485)
(922,008,194)
(1,436,822,682)
83,389,925,882
(660,475,543)
(109,372,511)
(314,373,108)
(1,084,221,162)
55,926,728,459
51,783,399,655
30,606,842,700
82,390,242,355
39,024,581,583
15,870,580,134
54,895,161,717
1,800,000,000
1,000,000,000
600,000,000
540,000,000
250,000,000
32,381,499,310
9,802,890,319
4,529,250,709
879,759,317
51,783,399,655
2,000,000,000
3,000,000,000
490,000,000
20,000,000
24,711,270,628
4,874,529,920
3,408,622,396
520,158,639
39,024,581,583
5,147,033,924
4,131,708,000
3,408,659,100
3,098,781,000
3,098,781,000
2,014,914,004
1,601,036,850
1,549,390,500
1,549,390,500
1,363,463,640
1,269,388,781
1,032,927,000
526,628,408
504,861,893
309,878,100
30,606,842,700
318,949,368
343,200,000
1,721,030,180
2,574,000,000
428,846,070
637,808,028
2,574,000,000
1,287,000,000
1,716,000,000
451,097,813
934,453,289
341,765,857
514,800,000
1,716,000,000
151,155,576
117,704,987
42,768,966
15,870,580,134
82,390,242,355
82,390,242,355
54,895,161,717
54,895,161,717
5,039,307,714
8,585,068,119
28,116,620,270
34,732,027,867
4,602,688,233
1,314,530,152
82,390,242,355
5,601,583,420
2,352,283,317
16,977,409,199
22,139,165,092
6,764,803,582
1,059,917,107
54,895,161,717
Borrowings from other banks, financial institutions and agents
In Bangladesh (note 14.a.1)
Outside Bangladesh (note 14.a.2)
14.a.1 In Bangladesh
Eastern Bank Limited
Trust Bank Limited
Bank Al-Falah Limited
State Bank of India
Uttara Bank Limited
Bank Asia Limited
AB Bank Limited
Citibank NA
Refinance against export development fund (EDF) loan from Bangladesh Bank
Refinance against stimulus package from Bangladesh Bank
Refinance against SME & Corporate loan from Bangladesh Bank
Borrowings from Bangladesh Bank
14.a.2 Outside Bangladesh
Caixa Bank, S.A
Bank Muscat SAOG
RAK Bank
CDC Group PLC
Standard Chartered Bank, Singapore
Abu Dhabi Commercial Bank
Emirates Islamic Bank
Global Climate Partnership Fund S.A.Sicav-Sif (GCPF)
HDFC Bank Limited
responAbility SICAV (Lux)
Asian Development Bank
Banque du Caire
The Commercial Bank of Qatar (QSC)
Emirates NBD Bank PJSC, Dubai
Oesterreichische Entwicklungsbank AG (OeEB)
Standard Chartered Bank, Thailand
DBS Bank
International Islamic Trade Finance Corporation
Korea Development Bank, Singapore
14.a.3 Borrowings secured/unsecured from other banks, financial institutions and agents
Secured
Unsecured
14.a.4 Maturity grouping of borrowings from other banks, financial institutions and agents
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
Over 1 year but within 5 years
Over 5 years
14.b
City Brokerage Limited is enjoying overdraft and short term loan facilities from The City Bank Limited and NCC Bank Limited for extending
margin financing to its customers, supporting prefunding facilities to its foreign clients and investment in secondary market. Rate of
interest of the availed facilities are currently 7.00.% p.a for overdraft & 6.00% p.a for short term loan availed from The City Bank Limited
and 6.00% for overdraft from NCC Bank Limited which is subject to revisions by the Banks’ management from time to time.
Annual Report 2022
381
Financial Statements 2022
Mutual indebtedness:
Loan from The City Bank Limited-City Brokerage Limited
Loan from The City Bank Limited- CBL Money Transfer Sdn. Bhd.
Loan from The City Bank Limited - City Hong Kong Limited
2022
Taka
14.c
City Bank Capital Resource Limited has availed two term loan facility for ten years to acquire and develop own asset from IPDC Finance
Limited at the rate of 8.5% & 9.00%. City Bank Capital Resource is also enjoying overdraft facilities from Community Bank Bangladesh
Limited and One Bank Limited at the rate of 9.00% to facilitated customer by margin financing and investment in secondary market.
14.d
CBL Money Transfer Sdn Bhd. has taken overdraft facility from The City Bank Limited For prefunding support for remitting foreign
currency from Malaysia at the rate of 5.25%.
14.e
City Hong Kong Limited is availing overdraft facilities from its parent at the rate of 5.75% for extending bills discounting facilities to its customers.
2022
Taka
15
Consolidated deposits and other accounts
The City Bank Limited (note 15.a)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company indebtedness (note 15.b)
15.a
2021
Taka
331,890,384,374 282,063,632,416
557,795,752
890,451,083
148,686,301
145,330,141
116,834
102,595
165,959,594
(711,196,342)
(1,058,475,137)
331,885,786,919 282,207,000,692
Deposits and other accounts - The City Bank Limited
Local bank deposits (note 15.a.1)
Customer and other deposits
3,504,814,863
3,515,697,015
328,385,569,511 278,547,935,401
331,890,384,374 282,063,632,416
15.a.1 Local bank deposits
Name of Bank
Bank Asia Limited
Commercial Bank of Ceylon
One Bank Limited
Bangladesh Krishi Bank Limited
NRB Bank Limited
Jamuna Bank Limited
Trust Bank Limited
Shahjalal Islami Bank Limited
Padma Bank Limited
Islami Bank Bangladesh Limited
Export Import Bank of Bangladesh Limited
Al Arafah Islami Bank Limited
First Security Islami Limited
Southeast Bank Limited
Standard Bank Limited
AB Bank Limited
Prime Bank Limited
BRAC Bank Limited
Sonali Bank Limited
Dutch-Bangla Bank Limited
Modhumoti Bank Limited
Social Islami Bank Limited
Mutual Trust Bank Limited
15.a.2 Deposits and other accounts
Current accounts and other accounts
Current and manarah current deposits
Sundry deposits (note 15.a.4)
Foreign currency deposits
Unclaimed dividend account (note 15.a.3)
Security deposits receipts
382
Annual Report 2022
CD
Taka
56,495
2,898,587
714,205
426,602
264,984
180,517
4,541,390
SND
Taka
4,052,624
300,992
215,152
107,778
39,049
4,715,595
2022
Manarah SND/ TD
FDR
Taka
Taka
1,136,219,700
1,239,512,400
516,463,500
206,585,400
206,585,400
154,939,050
362,468
17,809,894
5,743,975
3,936,217
3,857,869
3,107,960
64,765
358,444
9,795
1,041
3,460,305,450
35,252,428
2022
Taka
56,566,336,871
21,573,206,805
7,509,614,946
283,311,417
81,156,206
86,013,626,245
Total
Taka
1,136,219,700
1,239,512,400
516,463,500
206,585,400
206,585,400
155,301,518
17,809,894
5,743,975
4,109,119
3,936,217
3,857,869
3,107,960
2,898,587
1,015,197
491,367
358,444
264,984
215,152
180,517
107,778
39,049
9,795
1,041
3,504,814,863
2021
Taka
35,153,056,959
14,366,937,904
4,008,528,520
208,677,521
75,831,154
53,813,032,058
Bills payable
Pay orders issued
Demand draft
Pay slips issued
Savings bank deposits (note 15.a.5)
2021
Taka
2,580,092,786
2,972,468
1,019,515
2,584,084,769
2,676,752,954
3,946,572
2,463,200
2,683,162,726
80,589,303,162
72,477,566,128
Fixed deposits
Fixed deposits, mudaraba and manarah fixed deposits
Short notice deposits, mudaraba and manarah short notice deposits
Scheme deposits (note 15.a.6)
Non resident deposits
126,790,235,995 111,717,954,348
20,633,283,247
28,779,370,960
14,554,935,749
12,117,434,114
724,915,207
475,112,082
162,703,370,198 153,089,871,504
331,890,384,374 282,063,632,416
Total deposits and other accounts
15.a.3 Unclaimed Dividend Account
Year wise current accounts were opened for distribution of cash dividend and accordingly dividend amount was duly transferred to the
relevant current accounts. As on 31 December 2022, an amount of Taka 283,311,417 (2021: Taka 208,677,521) remained unclaimed
with several current accounts which are mentioned below:
Account Name
City Bank Cash Dividend Payable Account
Cash Dividend Account -2015
Cash Dividend Distribution Account -2016
Cash and Fractional Share Dividend Distribution Account-2017
Cash and Fractional Share Dividend Distribution Account-2018
Cash Dividend Distribution Account for 2019
Cash and Fractional Share Dividend Distribution Account for 2020
Cash and Fractional Share Dividend Distribution Account for 2021
Year wise
2014
2015
2016
2017
2018
2019
2020
2021
2022
Taka
9,859,917
14,655,069
15,563,901
12,404,011
6,572,027
18,983,040
130,136,461
75,136,991
283,311,417
2021
Taka
9,859,917
14,670,068
15,563,901
12,419,529
6,591,246
19,205,321
130,367,539
208,677,521
An amount of Taka 81,725,107 as on December 2022 (December 2021: Taka 73,054,789) as unclaimed cash dividend under Lawsuit
according to Company Matter no.112 of 2005 and 79 of 2012.
In compliance with directive issued by Bangladesh Securities and Exchange Commission Directive dated 14 January 2021, gazette and a
letter issued on 27 June 2021 & on 6 July 2021 respectively, we had already transferred Taka 27,694,847 to Capital Market Stabilization
Fund (CMSF) as unclaimed dividend for the year 2014 to 2017, excluding unclaimed cash dividend under Lawsuit. Details of transferred
to Capital Market Stabilization Fund (CMSF) are mentioned below:
Account Name
City Bank Cash Dividend Payable Account
Cash Dividend Account -2015
Cash Dividend Distribution Account -2016
Cash and Fractional Share Dividend Distribution Account-2017
15.a.4 Sundry deposits
Foreign bills proceed awaiting remittance
Sundry creditors (note-15.a.4.1)
Margin on letters of credit
Margin on letters of guarantee
Sundry deposit - ATM
Sundry deposits - Amex Card- local
Sundry deposits - City Card - local
Sundry deposits - Master Cards
Unclaimed foreign DD
Payable against RTGS & EFT
Others
Payable against legal expenses
CIB service charges
Charge back - Amex Card - international
Charge back - NPSB
Year wise
Account number
2014
2015
2016
2017
1101666157001
1401818593001
1401920447001
1402447912001
2022
Taka
9,477,191,374
7,997,045,617
2,055,543,001
825,570,904
440,866,215
401,491,484
94,805,238
91,003,383
70,260,908
57,511,538
18,044,115
12,810,499
12,210,739
5,134,724
2,183,868
Deposited
amount
7,584,685
7,234,639
6,765,846
6,109,677
27,694,847
2021
Taka
7,695,987,698
2,727,275,438
2,495,747,950
648,518,875
140,799,457
344,507,611
71,642,916
71,992,385
59,112,023
44,725,740
22,880,791
7,374,245
9,145,818
8,647,251
1,339,935
Annual Report 2022
383
Financial Statements 2022
2022
Taka
Charges against credit rating
Sanchaypatra
Interest payable on three stage deposits
Unclaimed balances
Key deposits
Payable against cash advance
Foreign currency
Auto debit receipt/payment (Credit Card)
Sundry deposits - reimbursment from union pay
Charge back - Master Cards
Payable against SP and others
Lease deposits
Agent commission on consumer credit schemes
Hajj deposits
Margin on inland bills purchased
Imprest fund - cash incentive
Risk fund (Consumer Credit Schemes and lease finance)
Sundry deposits - City Card - international
2022
Taka
1,690,570
1,300,000
1,232,682
1,091,872
883,500
814,693
799,525
766,277
632,898
594,962
516,464
346,592
232,757
194,597
185,000
170,017
80,428
364
21,573,206,805
2021
Taka
2,161,169
1,300,000
2,576,707
1,000,310
957,750
846,693
799,525
3,180,947
13,184
719,095
2,475,000
346,592
232,757
194,597
185,000
170,017
80,428
14,366,937,904
15.a.4.1 Sundry creditors
Sundry Creditors includes the unreconciled balances of all NOSTRO Accounts of Taka 3,500,730,703 (net off debit and credit).
15.a.5 Savings bank deposits
Savings bank deposits
Mudaraba/manarah savings deposits
72,015,010,575
8,574,292,587
80,589,303,162
67,151,135,189
5,326,430,939
72,477,566,128
12,734,881,825
1,221,287,863
375,731,839
201,878,948
13,524,048
3,816,069
1,274,558
950,000
657,407
606,529
270,046
56,617
14,554,935,749
10,869,353,725
847,391,812
179,335,368
203,157,123
8,937,865
4,891,599
1,274,558
950,000
746,951
785,184
366,252
243,677
12,117,434,114
15.a.6 Scheme deposits
City shomriddhi
Deposit pension scheme
Mudaraba monthly deposit scheme
City projonmo
Manarah hajj deposit scheme
Three stage scheme deposit
Junior savers scheme
Monthly benefit scheme
City bank sanchaya scheme
Marriage savings scheme
Lakpati savings scheme
Education savings scheme
15.a.7 Sector-wise deposits
Private
Other public
Deposit money banks
Government
Foreign currency
310,200,347,351 269,225,077,430
8,666,818,615
3,275,426,168
3,504,814,863
3,515,697,015
2,008,788,599
2,038,903,283
7,509,614,946
4,008,528,520
331,890,384,374 282,063,632,416
15.a.8 Maturity analysis of inter-bank deposits
Payable on demand
Up to 1 month
Over 1 month but within 3 months
Over 3 months but within 1 year
384
Annual Report 2022
3,504,814,863
3,504,814,863
6,231,811
3,464,433,546
12,463,623
32,568,035
3,515,697,015
Bills payable:
Payable on demand
Up to 1 month
Over 1 month but within 6 months
Over 6 months but within 1 year
Over 1 year but within 5 years
Over 5 years but within 10 years
Over 10 years
Other deposits:
Payable on demand
Up to 1 month
Over 1 month but within 6 months
Over 6 months but within 1 year
Over 1 year but within 5 years
Over 5 years but within 10 years
Over 10 years
15.b
315,539,937
294,503,941
1,577,699,683
495,419,165
2,683,162,726
27,119,759,107
21,406,829,930
26,219,635,579
19,941,649,265
89,806,049,439
71,037,775,169
80,795,001,306
70,616,236,708
102,385,005,895
93,439,349,987
2,947,453,315
2,903,603,926
33,394,964
35,024,705
329,306,299,605 279,380,469,690
331,890,384,374 282,063,632,416
City Brokerage Limited, City Bank Capital Resource Limited and City Hong Kong Limited maintained current deposit and fixed deposit
receipt accounts with its parent company, The City Bank Limited. Account wise outstanding balances are as follows:
Inter-company indebtedness among Holding company & Subsidiaries:
City Brokerage Limited - current accounts
City Brokerage Limited - fixed deposits receipt /short notice deposits
21,467,155
264,541,770
286,008,925
37,057,390
873,555,680
910,613,070
City Bank Capital Resources Limited - current accounts
City Bank Capital Resources Limited -fixed deposits receipt/short notice deposits
1,358,748
229,707,250
231,065,998
145,920,286
145,920,286
City Hong Kong Limited - current accounts
City Hong Kong Limited - fixed deposits receipt /short notice deposits
187,237,944
187,237,944
1,768,302
1,768,302
7,302
6,876,173
6,883,475
711,196,342
7,302
166,177
173,479
1,058,475,137
43,496,438,724
564,643,216
187,012,640
5,245,415,238
47,412,148
49,540,921,966
37,029,122,486
684,200,366
364,513,736
4,281,308,438
6,730,114
42,365,875,140
(189,868)
(1,096,773)
(2,864,671)
(4,151,312)
(128,819)
(3,475,946)
(6,360,563)
(2,798,992)
(12,764,320)
49,536,770,654
42,353,110,820
Inter-company indebtedness among Subsidiaries:
Payable to City Bank - City Bank Capital Resources Limited
Payable to City Bank Capital Resources Limited - City Brokerage Limited
Total inter-company indebtedness
16
303,888,369
283,629,144
1,519,441,844
477,125,412
2,584,084,769
2021
Taka
Consolidated other liabilities
The City Bank Limited (note 16.a)
City Brokerage Limited (note 16.b)
City Bank Capital Resources Limited (note 16.c)
CBL Money Transfer Sdn. Bhd. (note 16.d)
City Hong Kong Limited (note 16.e)
Mutual indebtedness:
Payable to City Bank Limited - City Brokerage Limited
Payable to City Bank Limited - City Bank Capital Resources Limited
Payable to City Bank Limited - CBL Money Transfer Sdn. Bhd.
Payable to City Brokerage Limited - City Bank Capital Resources Limited
Adjustments for Consolidation - City Bank Capital Resources Limited
Adjustments for Consolidation - CBL Money Transfer Sdn. Bhd.
Total consolidated other liabilities
Annual Report 2022
385
Financial Statements 2022
15.a.9 Maturity analysis of deposits
2022
Taka
16.a
Other liabilities - The City Bank Limited
Provision for loans and advances/investments (note 16.a.1)
Interest suspense account (note 16.a.3)
Interest/profit payable against deposit, borrowing & subordinated bond
Provision for income tax (note 16.a.6)
Payable against office expenses and others
Lease liabilities
Provision for outstanding off-balance sheet exposures (note 16.a.2)
Other provision (note 16.a.5)
Provision for non banking assets
CSR fund retained from foreign exchange (note 16.a.8)
Start-up Fund (note 16.a.7)
Net defined benefit obligation - Employees' Gratuity Fund (note 16.a.9)
Provision for balance with other banks
Branch adjustment account
Provision for nostro account
Payable to CBL Money Transfer Sdn. Bhd.
2022
Taka
2021
Taka
12,361,747,526
6,504,273,960
6,104,786,549
6,196,663,285
4,411,698,913
3,971,115,427
1,951,861,930
808,856,503
523,083,602
245,232,869
132,629,978
118,717,741
89,379,167
67,698,639
8,692,635
43,496,438,724
10,574,667,842
5,288,901,522
5,826,642,465
7,366,982,478
2,120,850,946
2,036,909,713
1,951,861,930
520,554,566
523,083,602
87,552,311
517,399,761
89,379,167
109,282,985
8,692,635
6,360,563
37,029,122,486
5,601,786,105
(1,677,151,566)
(13,492,860)
535,197,471
199,898,702
804,602,278
5,450,840,130
3,933,125,996
(1,347,208,839)
(32,551,805)
880,049,586
1,244,196,593
189,085,825
735,088,749
5,601,786,105
4,972,881,737
(804,602,278)
2,742,627,937
6,910,907,396
12,361,747,526
5,159,470,078
(3,468,413)
(735,088,749)
551,968,821
4,972,881,737
10,574,667,842
16.a.1 Provision for loans and advances/investments
Movement in specific provision on classified loans/investments:
Provision held at the beginning of the year
Fully provided debts written off during the year
Fully waived during the year
Recoveries of amounts previously written off
Specific provision made during the year
Reversal of previously written off loan
Transfer to/from general provision
Provision held at the end of the year
Movement in general provision on unclassified loans/investments:
Provision held at the beginning of the year
Fully provided debts written off during the year
Transfer from provision to / for classified accounts
General provision made during the year
Provision held at the end of the year
The Bank maintained provision against loans/investments accounts under writ petition of Taka 803.75 million (2021: Taka 6.46 million)
against requirement of Taka 803.75 million (2021: Taka 6.46 million) as at 31 December 2022. These required and maintained provisions
included in total required and maintained provisions of loans / investments, disclosed above.
16.a.2 Provision on off-balances sheet exposures
As per BRPD circular no. 14 dated 23 September 2012 banks are advised to maintain 1% general provision against outstanding offbalance sheet exposures. Bangladesh Bank through BRPD circular letter no.1 dated 3 January 2018 and BRPD letter reference non
BRPD|(P-1)/661/13/2019-354 dated 13 January 2019 allows waiver of maintaining 1% general provision against off-balance sheet
exposures to fast track power plant project and exposures to all power plant projects for import of fuel with effect from 31 December 2017.
Waiver for fast track power plant project is applicable for the exposures to be taken till 30 September 2018. In year 2018, Bangladesh
Bank also issued a circular through BRPD letter no.7 dated 21 June 2018 allows waiver of maintaining 1% general provision against
Bills for Collection. In addition to the all said circular, Bangladesh Bank issued a letter reference no. BRPD(P-1)/661/13/2020/1403
dated 05 February 2020 based on our prayer to allows waiver of maintaining 1% general provision against Export Credit Agency (ECA)
guarantee back long term credit facility by allowing 0.5% general provision waver. As on 31 December 2022 Bank’s outstanding off
balance sheet exposures against import of fuel for power plant project, Letters of Ccredit & Acceptances backed by Goverment, Bills for
Collection and Export Credit Agency (ECA) guarantee back long term credit facility were Taka 34,299,385,004, Taka 10,743,551,157, Taka
19,402,566,269 and Taka 12,318,316,817 respectively. With compliance of the mentioned circular and circular letter reference, the Bank
maintained provision of Taka 1,951,861,930 (31 December 2021: Taka 1,951,861,930) against requirement of Taka 1,616,567,401 ( 31
December 2021: Taka 1,877,090,405 ) as at 31 December 2022.
Opening balance
1,951,861,930
1,202,334,089
Addition during the year
749,527,841
Closing balance
1,951,861,930
1,951,861,930
16.a.3 Interest suspense account
Interest suspense account on classified loans and advances
Interest suspense on standard loans
Interest suspense on special mention account
386
Annual Report 2022
2,151,606,795
3,887,172,732
465,494,433
6,504,273,960
2,094,365,472
2,780,291,497
414,244,553
5,288,901,522
Opening balance
Amount transferred to "interest suspense" account during the year
Amount recovered from "interest suspense" account during the year
Amount waived during the year
Amount written off during the year
Closing balance
2021
Taka
5,288,901,522
2,149,214,221
(513,472,125)
(186,064,345)
(234,305,313)
6,504,273,960
4,075,007,387
2,700,928,568
(663,738,542)
(489,116,622)
(334,179,269)
5,288,901,522
548,689,154
154,872,598
36,009,184
27,310,309
24,272,273
10,251,862
6,449,123
1,002,000
808,856,503
282,509,490
131,235,232
36,009,184
27,310,309
24,150,000
10,251,862
9,088,489
520,554,566
27,310,309
27,310,309
55,469,389
(28,159,080)
27,310,309
16.a.5 Other provision
Provision against employee bonus
Provision against other assets
Provision against subsidiary company-City Hong Kong Limited
Provision against good borrower
Provision against investment
Provision against fixed assets (land of shamoly branch)
Provision against interest receivable
Provision against work-in-progress
16.a.5.1 Movement of Provision against good borrower
Opening balance
Addition during the year
Release during the year
Closing balance
16.a.6 Provision for income tax
Opening balance
7,366,982,478
2,852,148,135
Adjustment for settlement of tax
(5,322,495,164)
Provision during the year (note 16.a.6.1)
4,152,175,971
4,514,834,343
Closing balance
6,196,663,285
7,366,982,478
16.a.6.1 Provision for current tax of Taka 4,152,461,721 @ 37.5% and provision for prior year Taka 4,514,834,343 have been made, as prescribed
by Finance Act, of the accounting profit of the bank after considering some of the add backs to income and disallowances of expenditure
as per Income Tax Ordinance, 1984.
Corporate tax position of the bank has been shown in Annexure-E.
16.a.7 Start-up fund
Opening balance
Addition during the year
Closing balance
87,552,311
45,077,667
132,629,978
40,121,712
47,430,599
87,552,311
As per SMESPD circular no. 04 and circular letter no. 05 dated 29 March 2021 and 26 April 2021 respectively, Bank has kept start up fund
under other liabilities for financing potential start-up initiatives in Bangladesh to make a significant contribution to the progress of the
country’s economy, including employment. This fund is to be built up by transferring 1% of annual audited net profit.
16.a.8 CSR fund retained from foreign exchange
Bank has separated 50% of exchange income for the months of May-June'22 of Taka 245,232,869 (net off tax) as CSR Fund in compliance
with Bangladesh Bank letter no. BRPD(CMS)651/9(03)Kha/2022-12036, dated November 29, 2022.
16.a.9 Net defined benefit obligation - Employees' Gratuity Fund
Defined benefit obligation (note 16.a.9.1)
Add: Additional defined benefit obligation
Less: Fair value of plan assets (note 16.a.9.2)
2,881,634,040
2,762,916,299
118,717,741
2,059,711,148
161,570,852
1,703,882,239
517,399,761
2,059,711,148
161,570,852
265,027,570
159,222,660
(252,494,040)
488,595,850
2,881,634,040
2,079,695,673
176,158,437
158,056,871
(270,662,072)
(83,537,761)
2,059,711,148
16.a.9.1 Defined benefit obligation - gratuity fund
Defined benefit obligation as on 1 January
Additional defined benefit obligation
Current service cost
Interest cost
Actual net benefits payments
Remeasurement (gain)/loss
Defined benefit obligation as on 31 December
Annual Report 2022
387
Financial Statements 2022
16.a.4 Movement of interest suspense account
2022
Taka
16.a.9.2 Fair value of plan assets - gratuity fund
Fair value of plan assets as on 1 January
Interest income on plan assets
Actual employer contributions
Actual net benefits payments
Remeasurement gain/(losses) on plan assets
Fair value of plan assets as on 31 December
2022
Taka
2021
Taka
1,703,882,239
163,525,800
1,148,040,090
(252,494,040)
(37,790)
2,762,916,299
1,508,255,049
114,627,384
367,712,344
(270,662,072)
(16,050,466)
1,703,882,239
(37,790)
(488,595,850)
(488,633,640)
183,237,615
(305,396,025)
(16,050,466)
83,537,761
67,487,295
(25,307,736)
42,179,559
416,744,256
41,757,155
35,750,841
30,653,781
27,833,733
10,450,606
1,452,844
564,643,216
472,326,910
15,128,588
61,635,912
21,275,911
21,518,054
92,000
92,222,991
684,200,366
95,067,520
49,828,478
16,322,504
12,312,850
11,410,348
2,070,940
187,012,640
278,014,743
33,327,131
18,637,640
2,040,165
27,379,169
5,114,888
364,513,736
5,161,936,034
57,600,021
20,137,725
3,981,404
1,760,054
5,245,415,238
4,214,530,121
54,509,770
10,021,102
2,247,445
4,281,308,438
46,898,858
356,597
156,693
47,412,148
541,866
1,162,193
211,164
4,492,326
322,565
6,730,114
15,000,000,000
15,000,000,000
16.a.9.3 Remeasurements gain/(loss) of defined benefits liability/assets
Remeasurement gain/(losses) on plan assets
Remeasurement gain/(losses) on defined benefit obligation
Less: Deferred tax (expense)/income
Remeasurement gain/(loss) has been recognised as per Actuarial Valuation Report.
16.b
Other liabilities - City Brokerage Limited
Provision for taxation and VAT
Lease obligation
Accounts payable
Provision for diminution in value of investments
Deferred tax liabilities
Provision for loans and advances
Accrued expenses
Interest suspense
16.c
Other liabilities - City Bank Capital Resources Limited
Provision for taxation
Provision for diminution in value of investment
VAT and TDS payable
Lease obligation
Accrued expenses
Other payables
16.d
Other liabilities - CBL Money Transfer Sdn. Bhd.
Settlement obligation
Lease obligation
Provision for taxation
Accrued expenses
Deferred tax liabilities
16.e
Other liabilities - CBL Hong Kong Limited
Payable against others
Provision for office expense
Deferred tax liabilities
Lease obligation
Provision for auditor fee
17
Share capital
17.1
Authorised:
1,500,000,000 ordinary shares of Taka 10.00 each
Authorised Share Capital of the Bank has been increase to Taka 15,000,000,000 from Taka 10,000,000,000 by a special resolution dated
28 June 2015.
388
Annual Report 2022
Issued, subscribed and fully paid up:
No. of shares
Ordinary shares of Taka 10.00 each issued for cash up to 31 December'16
Ordinary shares of Taka 10.00 each issued for cash to IFC during October'17
Ordinary shares of Taka 10.00 each issued as bonus shares up to 31 December'22
240,463,470
46,094,633
914,048,640
1,200,606,743
2022
Taka
2021
Taka
2,404,634,700
460,946,330
9,140,486,400
12,006,067,430
2,404,634,700
460,946,330
7,806,478,910
10,672,059,940
The City Bank Limited. issued 46,094,633 fresh ordinary shares @ Tk. 28.30 each (including a premium of Tk. 18.30 per share) to
International Finance Corporation (IFC) on 3 October 2017 after complying with all regulatory requirements.
The Bank offered 1:1 right share during the year 2010 and on the record date the outstanding number of shares was 19,639,125 as the
bonus for 2009 was credited before the record date for right share. During the course of right exercise the honourable High Court issued
an injunction order against 392,778 shares. The verdict of the Court was to restrain exercise of right shares against the said 392,778
shares and also asked to maintain provision for future dividend, which may be declared on the aforementioned shares. Accordingly, the
Bank maintained a reserve of Taka 75,930,749 till 31 December 2022 for subsequent declared stock dividend for the prejudice shares,
which is shown under surplus in profit and loss account.
17.3
History of issued, subscribed and fully paid up capital:
Accounting year
1983
1985
1987
1990
2002
2004
2005
2006
2007
2008
2009
2010
2010
2011
2012
2013
2014
2015
2017
2018
2019
2021
2022
Declaration
No. of share
Opening capital
Further subscription
Initial public offer
1:1 Right issue
1:2 Right issue
1:1 Right issue
50% stock dividend
50% stock dividend
10% stock dividend
15% stock dividend
15% stock dividend
25% stock dividend
1:1 Right issue
30% stock dividend
25% stock dividend
10% stock dividend
20% stock dividend
5% stock dividend
Fresh share issued to IFC
5% stock dividend
5% stock dividend
5% stock dividend
12.5% stock dividend
3,400,000
1,000,000
3,600,000
8,000,000
8,000,000
24,000,000
24,000,000
36,000,000
10,800,000
17,820,000
20,493,000
39,278,250
192,463,470
116,656,410
126,377,782
63,188,891
139,015,560
41,704,668
46,094,633
46,094,633
48,399,364
50,819,333
133,400,749
1,200,606,743
Value of capital
34,000,000
10,000,000
36,000,000
80,000,000
80,000,000
240,000,000
240,000,000
360,000,000
108,000,000
178,200,000
204,930,000
392,782,500
1,924,634,700
1,166,564,100
1,263,777,820
631,888,910
1,390,155,600
417,046,680
460,946,330
460,946,330
483,993,640
508,193,330
1,334,007,490
12,006,067,430
Cumulative
34,000,000
44,000,000
80,000,000
160,000,000
240,000,000
480,000,000
720,000,000
1,080,000,000
1,188,000,000
1,366,200,000
1,571,130,000
1,963,912,500
3,888,547,200
5,055,111,300
6,318,889,120
6,950,778,030
8,340,933,630
8,757,980,310
9,218,926,640
9,679,872,970
10,163,866,610
10,672,059,940
12,006,067,430
Although face value of paid up capital was split into Taka 10 from Taka 100 during the year 2011, we considered face value of share @
Taka 10 from the inception of the bank for this statement.
17.3.a Percentage of shareholdings at the closing date
Particulars
General public
Directors and sponsors
Institutions
Foreign shareholders
2022
No of Shares Percentage (%)
No of Shares
452,675,820
368,750,592
315,653,778
63,526,553
1,200,606,743
431,565,417
352,282,534
244,868,310
38,489,733
1,067,205,994
37.70%
30.71%
26.29%
5.29%
100.00%
2021
Percentage (%)
40.44%
33.01%
22.94%
3.61%
100.00%
Annual Report 2022
389
Financial Statements 2022
17.2
17.4
Classification of shareholders by holding
Number of
share holders
01 - 500 shares
501 - 5,000 shares
5,001 - 10,000 shares
10,001 - 20,000 shares
20,001 - 30,000 shares
30,001 - 40,000 shares
40,001 - 50,000 shares
50,001 - 100,000 shares
100,001 - 1,000,000 shares
Over 1,000,000 shares
17.5
2022
No. of
Shares
14,441
2,056,986
11,564
20,437,654
1,782
12,462,939
1,157
16,157,990
422
10,453,618
197
6,845,223
128
5,887,467
278
19,657,918
333
107,201,784
136
999,445,164
30,438 1,200,606,743
2021
% of total
holding
0.17%
1.70%
1.04%
1.35%
0.87%
0.57%
0.49%
1.64%
8.93%
83.25%
100.00%
No. of
share holders
15,322
11,681
1,892
1,113
414
190
142
284
334
131
31,955
% of total
holding
0.20%
1.89%
1.28%
1.48%
0.97%
0.62%
0.61%
1.89%
9.76%
81.31%
100.00%
Consolidated Capital Adequacy Ratio
As per Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III), all scheduled
banks are required to calculate Capital Adequacy Ratio based on ‘Solo’ basis as well as on ‘Consolidated’ basis. Capital Adequacy Ratio is
calculated in accordance with the phase-in arrangements for Basel III implementation in 2015. All amounts are stated in Taka except for
those, if any, stated otherwise.
2022
2021
Taka
Taka
Common equity tier 1 capital (CET1)
Paid up capital
Non-repayable share premium account
Statutory reserve
General reserve
Retained earnings (note 22)
Dividend equalisation reserve
Capital reserve
Minority interest in subsidiaries
Regulatory adjustments / deductions from common equity tier 1 capital (CET1)
Deferred tax assets
100% of excess investment in other banks, FI and Ins. Co.
Reciprocal crossholdings of capital
Book value of goodwill and value of any contingent assets which are shown as assets
Total common equity tier 1 capital
12,006,067,430
1,504,388,797
10,501,678,633
11,394,928
8,165,314,751
530,786,630
38,307,621
152,844
32,758,091,634
10,672,059,940
1,504,388,797
9,167,671,143
11,394,928
8,242,246,773
530,786,630
146,758
30,128,694,969
(1,074,963,216)
(794,369,172)
(46,625,170)
(40,060,717)
30,802,073,359
(1,109,277,687)
(793,784,565)
(35,191,762)
28,190,440,955
Additional tier 1 capital
Perpetual bond
Total tier 1 capital
4,000,000,000
34,802,073,359
4,000,000,000
32,190,440,955
8,629,000,000
8,862,769,326
17,491,769,326
3,844,000,000
6,924,743,667
10,768,743,667
(794,369,172)
16,697,400,154
51,499,473,513
(793,784,565)
9,974,959,102
42,165,400,056
Tier 2 capital
Tier-II subordinated bond
General provision (note 17.5.2)
Regulatory adjustments / deductions from tier 2 capital
100% of excess investment in other banks, FI and Ins. Co.
Total tier 2 capital
Total capital
Total assets
Total risk weighted assets (note 17.5.1)
Required capital with capital conservation buffer (12.50% of risk weighted assets)
Surplus
Total capital ratio
Tier-1 capital ratio
Leverage ratio
390
Annual Report 2022
514,911,840,125 424,914,436,281
369,858,425,467 315,059,240,072
46,232,303,183
5,267,170,330
39,382,405,009
2,782,995,047
13.92%
9.41%
5.27%
13.38%
10.22%
5.48%
A. Credit risk
On-balance sheet
Off-balance sheet
B. Market risk
C. Operational risk
Total risk weighted assets (A+B+C)
2021
Taka
238,707,443,464 204,246,622,379
66,073,834,347
54,578,809,374
304,781,277,811 258,825,431,753
24,263,765,259 21,087,418,859
40,813,382,397 35,146,389,460
369,858,425,467 315,059,240,072
17.5.2 General provision maintained against unclassified loan/investments & outstanding off balance sheet exposures
General provision maintained against unclassified loan/investments (note 16.a.1)
General provision maintained against outstanding off balance sheet exposures (note 16.a.2)
6,910,907,396
1,951,861,930
8,862,769,326
4,972,881,737
1,951,861,930
6,924,743,667
Regulatory adjustments / deductions from common equity tier 1 capital (CET1)
Deferred tax assets
100% of excess investment in other banks, FI and Ins. Co.
Reciprocal crossholdings of capital
Total common equity tier 1 capital
12,006,067,430
1,504,388,797
10,501,678,633
11,394,928
7,287,614,284
530,786,630
31,841,930,702
10,672,059,940
1,504,388,797
9,167,671,143
11,394,928
7,686,990,690
530,786,630
29,573,292,128
(1,087,421,545)
(46,625,170)
30,707,883,987
(1,128,705,683)
28,444,586,445
Additional tier 1 capital
Perpetual bond
Total tier 1 capital
4,000,000,000
34,707,883,987
4,000,000,000
32,444,586,445
8,629,000,000
8,862,769,326
17,491,769,326
3,844,000,000
6,924,743,667
10,768,743,667
17,491,769,326
52,199,653,313
10,768,743,667
43,213,330,112
17.5.a Capital Adequacy Ratio - The City Bank Limited
Common equity tier 1 capital (CET1)
Paid up capital
Non-repayable share premium account
Statutory reserve
General reserve
Retained earnings (note 22.a)
Dividend equalisation reserve
Tier 2 capital
Tier-II subordinated bond
General provision (note 17.5.a.2)
Regulatory adjustments / deductions from tier 2 capital
100% of Excess Investment in other banks, FI and Ins. Co.
Total tier 2 capital
Total capital
Total assets
Total risk weighted assets (note 17.5.a.1)
Required capital with capital conservation buffer (12.50% of risk weighted assets)
Surplus
Total capital ratio
Tier-1 capital ratio
Leverage ratio
17.5.a.1 Risk weighted assets
A. Credit risk
On-balance sheet
Off-balance sheet
B. Market risk
C. Operational risk
Total risk weighted assets (A+B+C)
506,846,963,047 416,902,360,890
360,906,070,702 305,193,808,132
45,113,258,838
7,086,394,475
38,149,226,017
5,064,104,095
14.46%
9.62%
5.32%
14.16%
10.63%
5.59%
237,277,544,594 202,989,447,570
66,073,834,347
54,578,809,374
303,351,378,941 257,568,256,944
18,570,646,143 14,122,338,367
38,984,045,618 33,503,212,821
360,906,070,702 305,193,808,132
17.5.a.2 General provision maintained against unclassified loan/investments & outstanding off balance sheet exposures
General provision maintained against unclassified loan/investments (note 16.a.1)
General provision maintained against outstanding off balance sheet exposures (note 16.a.2)
6,910,907,396
1,951,861,930
8,862,769,326
4,972,881,737
1,951,861,930
6,924,743,667
Annual Report 2022
391
Financial Statements 2022
17.5.1 Risk weighted assets
2022
Taka
18
Statutory reserve
Opening balance
Addition during the year (20% of pre-tax profit)
Closing balance
2022
Taka
9,167,671,143
1,334,007,490
10,501,678,633
2021
Taka
8,659,477,813
508,193,330
9,167,671,143
Every scheduled bank is required to build up statutory reserve and before declaring dividend, will transfer profit equivalent to 20.0% of
PBT to the said reserve until the sum of the said reserve and share premium account becomes equal to the paid up capital.
19
Share premium
Opening balance
Adjustment for issuance of stock dividend
Closing balance
20
1,504,388,797
1,504,388,797
1,504,388,797
1,504,388,797
Dividend equalisation reserve
BRPD circular letter no. 18 dated 20 October 2002, states that banks are require to create Dividend Equalisation Fund if declared cash
dividend is more than 20%. As per said circular, creation of Dividend Equalisation Fund is to be equal of excess amount of cash dividend
over 20%. For the year 2015 and 2016 bank’s declared cash dividend rates were 22% and 24% respectively.
Opening balance
Addition during the year
Closing balance
21
530,786,630
530,786,630
530,786,630
530,786,630
1,014,361,820
(114,961,287)
266,567,052
1,165,967,585
1,662,547,071
199,444,073
758,305,125
2,620,296,269
912,176,031
1,266,068
89,524,793
11,394,928
1,014,361,820
1,541,387,163
109,319,271
445,709
11,394,928
1,662,547,071
(153,268,908)
38,307,621
(114,961,287)
199,444,073
199,444,073
7,287,614,284
7,686,990,690
94,436,696
(7,812)
94,428,884
118,051,266
(5,603)
118,045,663
1,042,828,233
(35,032)
1,042,793,201
830,604,681
(31,155)
830,573,526
Post acquisition retained deficit from CBL Money Transfer Sdn. Bhd.
Non-controlling interest
201,537,061
201,537,061
118,687,037
118,687,037
Post acquisition retained deficit from City Hong Kong Limited
Non-controlling interest
(35,901,299)
(35,901,299)
(36,009,185)
(36,009,185)
(276,812,532)
(168,997,000)
20,652,152
8,165,314,751
(276,812,532)
(193,139,428)
(6,088,998)
8,242,246,773
Consolidated other reserve
The City Bank Limited (note 21.a)
City Brokerage Limited (note 21.b)
City Bank Capital Resources Limited
21.a
Other reserve - The City Bank Limited
Revaluation reserve for equity shares
Revaluation reserve for HFT securities
Revaluation reserve for HTM securities
General reserve
21.b
Other reserve - City Brokerage Limited
Revaluation reserve for equity shares
Capital reserve
22
Consolidated surplus in profit and loss account
The City Bank Limited (note 22.a)
Post acquisition retained surplus from City Brokerage Limited
Non-controlling interest
Post acquisition retained surplus from City Bank Capital Resources Limited
Non-controlling interest
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited
City Brokerage Limited with The City Bank Limited
Foreign exchange revaluation effect
392
Annual Report 2022
Movement of surplus in profit and loss account-The City Bank Limited
2021
Taka
Opening balance
7,686,990,690
6,099,180,379
Profit for the year
4,507,766,687
4,743,059,867
Transfer to statutory reserve
(1,334,007,490)
(508,193,330)
Transfer to start up fund
(45,077,667)
(87,552,311)
Transfer to CSR fund
(245,232,869)
Cash dividend paid
(1,346,808,441)
(1,795,744,589)
Stock dividend paid
(1,334,007,490)
(508,193,330)
Remeasurements gain/(loss) of defined benefits liability/(assets) (note-16.a.9.3)
(488,633,640)
42,179,559
Deferred tax (income)/expense arise from remeasurement loss (note-11.a.5)
183,237,615
Coupon/dividend paid on perpetual bond
(296,613,111)
(297,745,555)
Closing balance
7,287,614,284
7,686,990,690
As per BRPD circular no. 11 dated 12 December 2011, Profit arise from deferred tax is not considered as distributable profit for dividend.
Remeasurement gain/(loss) arises from the actuarial valuation report carried out by professional actuary time to time on Bank Employees’
Gratuity Fund. The last actuarial valuation were carried out based on 31 December 2022 and actuarial gain/(loss) was recognised in
equity as a component of equity net of any deferred tax impact.
23
Non controlling interest
Share capital
Surplus in profit and loss account/retained earnings
24
Contingent liabilities
24.1
Letters of guarantee
Local
Foreign
Shipping guarantee
Margin on guarantee
110,000
42,844
152,844
110,000
36,758
146,758
25,520,909,987
880,602,107
26,401,512,094
(874,869,504)
25,526,642,590
23,976,834,195
1,150,912,895
25,127,747,090
(707,726,024)
24,420,021,066
13,403,273,956
11,441,437,334
1,556,800,804
26,401,512,094
(874,869,504)
25,526,642,590
10,443,396,724
13,286,962,643
1,397,387,723
25,127,747,090
(707,726,024)
24,420,021,066
28,194,614,111
15,598,428,605
9,132,160,035
52,925,202,751
(2,006,244,401)
50,918,958,350
45,043,975,992
17,141,452,393
147,445,093
62,332,873,478
(2,436,540,801)
59,896,332,677
19,402,381,269
520,831,973
19,923,213,242
10,859,176,989
546,562,909
11,405,739,898
7,204,475,597
11,739,967,236
458,123,436
19,402,566,269
(185,000)
19,402,381,269
6,491,349,852
3,947,474,394
420,537,743
10,859,361,989
(185,000)
10,859,176,989
7,067,645,915
7,067,645,915
41,603,304,800
41,603,304,800
Money for which the Bank is contingently liable in respect of guarantees given favouring:
Government
Banks and other financial institutions
Others
Margin on guarantee
24.2
Irrevocable Letters of Credit
General
Back to Back LC
Inland
Margin on LC
24.3
Consolidated bills for collection
The City Bank Limited (note 24.3.a)
City Hong Kong Limited
24.3.a Bills for collection -The City Bank Limited
Outward foreign bills for collection
Inward local bills for collection
Inward foreign bills for collection
Margin on bill collection
24.4
Forward assets purchased and forward deposits placed
Forward sales/contracts
24.5
Suit filed by the bank
No law suit has been filed by the bank against contingent liabilities.
Annual Report 2022
393
Financial Statements 2022
22.a
2022
Taka
25
Income statement - The City Bank Limited
Income:
Interest, discount and similar income (note 25.1)
Fees, commission and brokerage (note 25.2)
Gains less losses arising from dealing in foreign currencies (note 29.a)
Other operating income (note 30.a)
Gains less losses arising from dealing in securities (note 28.a)
Dividend income (note 28.a)
Gains less losses arising from investment securities (note 28.a)
Profit less losses on interest rate changes
Expenses:
Interest/profit paid on deposits, borrowings etc.
Administrative expenses (note 25.3)
Other operating expenses (note 39.a)
Depreciation on bank's assets (note 38.a)
Income over expenditure
25.1
13,197,502,626
9,409,159,392
2,251,496,216
1,100,597,546
25,958,755,780
11,827,113,323
8,677,554,766
7,899,396,073
1,396,175,258
1,107,145,935
19,080,272,032
11,000,546,928
25,556,953,427
2,879,003,251
73,789,083
196,458,333
1,123,105
233,933,333
28,941,260,532
20,725,354,751
1,767,007,360
91,880,750
12,277,778
661,375
5,800,000
22,602,982,014
3,560,229,072
3,560,229,072
3,355,820,899
3,355,820,899
6,977,238,560
717,433,874
72,067,327
128,451,313
548,404,666
24,545,807
2,729,400
3,231,250
935,057,195
9,409,159,392
6,073,630,989
526,581,475
28,839,747
99,990,203
446,014,582
20,301,212
2,440,000
2,423,200
699,174,665
7,899,396,073
25,556,953,427
132,309,275
168,630,772
45,784,244
25,903,677,718
20,725,354,751
126,643,556
266,607,751
17,981,876
21,136,587,934
(27,516,312)
(4,322,948)
(6,456,509)
(32,021,062)
(70,316,831)
25,833,360,887
(63,733,849)
(4,472,620)
(6,255,975)
(8,850,877)
(83,313,321)
21,053,274,613
Consolidated interest income/profit on investment
The City Bank Limited (note 26.a)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
The City Bank Limited with City Brokerage Limited
City Bank Capital Resources Limited
The City Bank Limited with CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
394
22,602,982,014
3,355,820,899
1,318,433,020
2,102,242,902
399,103,042
97,100,699
205,136,384
30,080,818,960
Administrative expenses
Salary and allowances
Rent, taxes, insurance, electricity, etc. (note 32.a)
Legal expenses (note 33.a)
Postage, stamp, telecommunication, etc. (note 34.a)
Stationery, printing, advertisement, etc. (note 35.a)
Chief executive's salary and fees (note 36)
Directors' fees (note 37.a)
Auditors' fees
Repair of bank's assets (note 38.a)
26
28,941,260,532
3,560,229,072
3,168,589,894
1,894,729,305
(13,115,305)
212,252,494
21,923,111
37,785,869,103
Fees, commission and brokerage
Commission (note 29.a)
Brokerage
25.3
2021
Taka
Interest, discount and similar income
Interest income (note 26.a)
Interest income on treasury bills/reverse repo/bonds (note 28.a)
Interest income on subordinated bond
Interest income on non convertible bond
Interest income on interest rate swap
Interest income on sukuk al istisna'a bond
25.2
2022
Taka
Annual Report 2022
27
Interest income/profit on investment - The City Bank Limited
Interest on industrial credits
Interest on short term loan
Interest on personal finance
Interest on small and medium enterprise loans
Interest on fully and partly secured overdrafts
Interest on credit cards
Interest on cash credits/bai-muajjal
Interest on packing credits
Interest on house building loans
Interest on Interest on export development fund (EDF)
Interest on demand loans
Interest on auto loan
Interest on documentary bills purchased
Interest on hire purchase shirkatul melk
Interest on staff loans
Interest on transport loans
Interest on loans against trust receipts
Interest on payment against documents
Interest on lease finance/izara
Total interest/profit on loans and advances/investments
5,794,730,959
3,205,757,503
2,987,224,699
2,710,536,644
1,763,880,399
1,587,433,542
1,473,343,942
1,152,814,170
1,023,057,375
981,250,029
598,556,287
385,706,219
187,406,598
164,345,561
149,023,571
17,696,122
12,842,469
1,784,541
24,197,390,630
5,065,722,209
2,467,135,527
2,476,943,422
2,217,979,139
1,509,715,570
1,391,416,813
1,471,030,104
402,927,383
819,708,685
552,367,551
372,311,719
252,072,185
415,384,179
62,541,582
151,657,780
31,508,852
20,774,657
2,584,128
426,534
19,684,208,019
Interest on balance with other banks and financial institutions
Interest on call loans
Interest on foreign bank accounts
Total interest/profit on placement of funds
1,316,029,923
32,591,819
10,941,055
1,359,562,797
25,556,953,427
1,032,254,156
5,555,403
3,337,173
1,041,146,732
20,725,354,751
13,197,502,626
47,166,051
13,200,063
9,022,969
29,316,265
13,296,207,974
8,677,554,766
81,563,697
30,622,263
10,881,242
9,172,131
8,809,794,099
(27,516,312)
(4,322,948)
(6,456,509)
(32,021,062)
(70,316,831)
13,225,891,143
(63,733,849)
(4,472,620)
(6,255,975)
(8,850,877)
(83,313,321)
8,726,480,778
5,568,311,156
1,139,272,707
1,034,935,415
800,899,406
588,408,057
496,460,842
199,460,830
27,273,297
12,973,172
2,042,585
1,090,006,520
802,951,804
513,255,778
117,338,851
677,519,457
126,392,749
13,197,502,626
3,690,620,905
951,068,435
452,703,541
407,250,328
732,522,867
547,972,212
112,571,743
16,488,425
8,712,051
425,869,205
651,637,805
89,049,649
3,197,707
464,447,098
123,442,795
8,677,554,766
Consolidated interest/profit paid on deposits, borrowings etc.
The City Bank Limited (note 27.a)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
City Brokerage Limited
City Bank Limited with City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
27.a
2021
Taka
Interest/profit paid on deposits, borrowings etc. - The City Bank Limited
a) Interest/profit paid on deposits:
Fixed deposits
Deposits under scheme
Current bank deposits
Mudaraba term deposits
Savings bank deposits
Short notice deposits
Mudaraba/manarah savings deposits
Mudaraba monthly benefit scheme
Mudaraba short notice deposits
Al-wadeeah current and other deposit account
b) Interest paid on borrowings from outside Bangladesh for off-shore banking
c) Interest paid on subordinate bond
d) Interest/profit paid on local bank accounts & NBFIs
e) Interest/profit paid on repurchase agreement (REPO)
f) Interest/profit paid on borrowing from Bangladesh Bank
h) Interest paid for lease obligation
Annual Report 2022
395
Financial Statements 2022
26.a
2022
Taka
28
Consolidated investment income
The City Bank Limited (note 28.a)
City Brokerage Limited
City Bank Capital Resources Limited
Inter-company transactions
City Bank Limited with City Brokerage Limited
City Bank Limited with City Bank Capital Resources Limited
28.a
2022
Taka
2021
Taka
3,605,367,405
144,208,009
119,667,280
3,869,242,694
2,578,967,388
196,235,414
80,175,220
2,855,378,022
(106,233,529)
4,617,796
3,767,626,961
2,862,942
4,172,616
2,862,413,580
2,879,003,251
233,933,333
212,252,494
196,458,333
73,789,083
21,923,111
1,123,105
(13,115,305)
3,605,367,405
1,767,007,360
5,800,000
97,100,699
12,277,778
91,880,750
205,136,384
661,375
399,103,042
2,578,967,388
Investment income - The City Bank Limited
Interest on treasury bills/reverse repo/bonds
Interest income on sukuk al istisna'a bond
Dividend on shares (note 28.a.1)
Interest income on non convertible bond
Interest income on subordinated bond
Gain on sale of shares and debentures
Interest income on interest rate swap
Gain on government securities
28.a.1 Dividend income includes Taxed Dividend of Taka 124,897,938 on which no further tax will be applicable according to the Sixth Schedule
part-A (para-60) of Income Tax Ordinance 1984.
29
Consolidated commission, exchange and brokerage
The City Bank Limited (note 29.a)
City Brokerage Limited
City Bank Capital Resources Ltd
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited
City Brokerage Limited with The City Bank Limited
29.a
6,728,818,966
277,850,135
126,074,936
245,160,273
29,518,125
7,407,422,435
4,674,253,919
471,459,814
361,782,801
192,921,945
35,941,035
5,736,359,514
(25,617,796)
(4,264,521)
7,377,540,118
(20,772,616)
(2,862,942)
5,712,723,956
1,207,175,261
1,171,339,949
690,318,787
352,062,714
62,325,817
50,342,783
21,676,922
4,691,586
184,544
110,709
3,560,229,072
3,168,589,894
6,728,818,966
1,687,954,118
731,477,539
571,953,874
288,083,834
47,617,784
4,275,107
18,509,573
5,602,138
330,562
16,370
3,355,820,899
1,318,433,020
4,674,253,919
1,165,610,097
40,888,081
677,083
1,207,175,261
1,561,592,653
120,912,090
5,449,375
1,687,954,118
3,142,170,973
26,418,921
3,168,589,894
1,325,737,702
(7,304,682)
1,318,433,020
Commission, exchange and brokerage - The City Bank Limited
Other fees and charges (note 29.a.1)
Accepted bills
Letters of credit
Letters of guarantee
Export related services
Other commissions
NRB operation
PO, DD, TT, TC, etc.
OBC, IBC etc.
Bills purchased
Exchange gain including gain from foreign currency dealings (note 29.a.2)
29.a.1 Other fees and charges
Service and other charges
Structured finance fee
Commitment fee
29.a.2 Net exchange gain
Exchange gain
Exchange loss
396
Annual Report 2022
Consolidated other operating income
The City Bank Limited (note 30.a)
City Brokerage Limited
City Bank Capital Resources Ltd
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited
City Brokerage Limited with The City Bank Limited
30.a
2021
Taka
1,894,729,305
7,911,436
9,656,356
495,969
-
2,102,242,902
6,479,700
1,675,330
1,202,172
-
1,912,793,066
2,111,600,104
(6,499,080)
1,906,293,986
(6,189,600)
2,105,410,504
1,620,016,634
109,335,862
62,169,235
60,781,951
17,456,822
14,538,644
10,430,157
1,894,729,305
1,803,842,137
108,333,533
69,821,586
73,151,530
16,908,147
14,675,932
15,510,037
2,102,242,902
711,161,052
353,681,702
335,036,590
133,166,590
86,970,700
1,620,016,634
810,051,010
472,714,984
351,916,281
111,924,328
57,235,534
1,803,842,137
6,977,238,560
104,402,862
68,130,886
55,879,722
27,720,250
7,233,372,280
6,073,630,989
116,900,490
68,993,052
48,027,916
23,428,432
6,330,980,879
Other operating income - The City Bank Limited
Credit card income (note 30.a.1)
Rebate received from foreign banks
Swift recoveries
Income from forfeited provident fund
Rental income
Others
Profit from sale of fixed assets
30.a.1 Credit card income
Merchant commission
Late payment fees
Card issue fees
Interchange fees
Mark-up, excess limit, cash advance fees etc.
31
Consolidated salaries and allowances
The City Bank Limited*
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
* Based on Actuarial Valuation as per IAS 19 Employee Benefits, Gratuity expenses of Tk. 488,633,640 was required to recognized
through retained earnings instead of booking under salary cost. Hence, during 2022 total salary cost of the bank was the amount of Tk.
7,001,784,367, shown in profit and loss account and rest of the gratuity expenses amounting Tk. 488,633,640 booked through retained
earnings, i.e. total salary expenditure for the year 2022 was Tk.7,490,418,007.
32
Consolidated rent, taxes, insurance, electricity etc.
The City Bank Limited (note 32.a)
City Brokerage Limited (note 32.b)
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
City Brokerage Limited with The City Bank Limited
32.a
717,433,874
41,339,635
13,555,129
32,549,269
1,445,488
806,323,395
526,581,475
62,656,567
21,429,071
26,826,445
1,248,867
638,742,425
(6,499,080)
799,824,315
(6,189,600)
632,552,825
321,232,980
150,028,323
126,605,464
119,567,107
717,433,874
280,652,702
142,535,078
10,488,589
92,905,106
526,581,475
Rent, taxes, insurance, electricity etc. - The City Bank Limited
Insurance
Power and electricity
Rent*
Rates and taxes
* While implementing IFRS 16 (leases), the bank recorded interest expense on lease liabilities (note 27.a) and depreciation on right of
use assets (ROA) (note 38.a) instead of charging rental expense of BDT 752,478,060 (including VAT) (2021: Taka 624,807,561) in 2022
against those rental premises that have been treated as lease assets (ROA) and shown in the balance sheet under IFRS 16.
Annual Report 2022
397
Financial Statements 2022
30
2022
Taka
32.b
Rent, taxes, insurance, electricity etc. - City Brokerage Limited
Rates and taxes
Insurance
Power and electricity
33
69,057,932
3,009,395
72,067,327
24,489,744
4,350,003
28,839,747
128,451,313
3,371,717
1,138,824
3,271,505
489,875
136,723,234
99,990,203
3,620,673
1,013,341
2,712,627
801,971
108,138,815
82,021,003
32,121,424
11,757,874
2,551,012
128,451,313
63,295,590
24,327,619
10,452,336
1,914,658
99,990,203
2,778,161
507,400
86,156
3,371,717
3,061,706
527,782
31,185
3,620,673
548,404,666
3,943,150
4,884,872
31,084,607
208,547
588,525,842
446,014,582
2,412,353
2,727,034
30,764,030
147,682
482,065,681
288,422,526
250,938,331
9,043,809
548,404,666
268,712,556
163,379,258
13,922,768
446,014,582
152,453,046
98,485,285
250,938,331
86,321,735
77,057,523
163,379,258
111,341,206
100,547,907
40,420,864
36,112,549
288,422,526
66,392,184
87,244,807
82,963,706
32,111,859
268,712,556
Consolidated stationery, printing and advertisements etc.
The City Bank Limited (note 35.a)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
35.a
28,839,747
700,426
965,585
119,995
30,625,753
Postage, stamps, telecommunication etc. - City Brokerage Limited
Telegram, telex, fax and e-mail
Telephone bill
Postage
35
72,067,327
666,951
3,202,304
168,880
76,105,462
Postage, stamps, telecommunication etc. - The City Bank Limited
Telephone - office
Postage/courier service
Telephone - residence
Telegram, telex, fax & swift charge
34.b
58,154,368
2,273,115
2,229,084
62,656,567
Consolidated postage, stamps, telecommunication etc.
The City Bank Limited (note 34.a)
City Brokerage Limited (note 34.b)
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
34.a
36,545,960
2,381,470
2,412,205
41,339,635
Legal expenses - The City Bank Limited
Legal expenses
Others
34
2021
Taka
Consolidated legal expenses
The City Bank Limited (note 33.a)
City Brokerage Limited
City Bank Capital Resources Limited
City Hong Kong Limited
33.a
2022
Taka
Stationery, printing and advertisements etc. - The City Bank Limited
Publicity and advertisement (note 35.a.2)
Office and security stationery (note 35.a.1)
Computer consumable stationery
35.a.1 Office and security stationery
Security stationery
Office stationery
35.a.2 Publicity and advertisement
Advertisement-bill board and material
Advertisement in news paper and magazine
Advertisement sponsorship
Advertisement in television and radio
398
Annual Report 2022
Chief Executive's salary and fees
Basic salary
Festival bonus and other allowances
37
2021
Taka
12,090,323
12,455,484
24,545,807
8,491,392
11,809,820
20,301,212
2,729,400
224,000
134,166
4,111,823
122,718
7,322,107
2,440,000
174,000
133,555
3,698,989
6,446,544
2,729,400
2,440,000
Consolidated Directors' fees
The City Bank Limited (note 37.a)
City Brokerage Limited
City Bank Capital Resources Limited.
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
37.a
Directors' fees - The City Bank Limited
38
As per Bangladesh Bank’s Circular, BRPD Circular No. 11, dated 4 October 2015, each director was entitled to have Taka 8,000 as
honorarium for attending each meeting.
Consolidated depreciation and repair
Meeting fees
The City Bank Limited (note 38.a)
City Brokerage Limited (note 38.b)
City Bank Capital Resources Limited (note 38.c)
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
38.a
2,035,654,741
59,076,468
20,271,345
28,546,561
5,315,365
2,148,864,480
1,806,320,600
42,051,798
14,558,280
25,718,428
4,879,451
1,893,528,557
474,398,683
626,198,863
1,100,597,546
542,580,019
564,565,916
1,107,145,935
935,057,195
935,057,195
2,035,654,741
699,174,665
699,174,665
1,806,320,600
13,229,881
7,321,236
6,324,716
2,351,156
3,544,152
6,270,518
39,041,659
12,638,244
7,321,236
6,197,073
1,649,493
3,160,820
1,628,119
32,594,985
20,034,809
20,034,809
59,076,468
9,456,813
9,456,813
42,051,798
3,559,589
8,555,405
1,840,470
1,919,384
2,479,687
18,354,535
3,434,513
6,626,059
1,262,448
1,380,872
12,703,892
1,916,810
1,916,810
20,271,345
1,854,388
1,854,388
14,558,280
Depreciation and repair of bank's assets - The City Bank Limited
Depreciation
Depreciation on leased assets
Depreciation on fixed assets
Repairs and maintenance
Fixed assets
See Annexure D for details of depreciation.
38.b
Depreciation and repair - City Brokerage Limited
Depreciation
Leased assets
Building
Office equipment
Furniture and fixtures
Vehicle
Software
Repairs and maintenance
Fixed assets
38.c
Depreciation and repair - City Bank Capital Resources Limited
Depreciation
Leased assets
Vehicle
Furniture and fixtures
Office equipment
Building
Repairs and maintenance
Fixed assets
Annual Report 2022
399
Financial Statements 2022
36
2022
Taka
39
Consolidated other expenses
The City Bank Limited (note 39.a)
City Brokerage Limited
City Bank Capital Resources Limited
CBL Money Transfer Sdn. Bhd.
City Hong Kong Limited
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited
39.a
2022
Taka
2021
Taka
2,251,496,216
16,931,885
15,047,068
6,605,585
3,721,508
2,293,802,262
1,396,175,258
13,434,714
10,380,589
6,041,474
4,965,547
1,430,997,582
(21,000,000)
2,272,802,262
(16,600,000)
1,414,397,582
416,554,342
346,077,450
319,076,513
314,257,443
171,288,425
166,913,811
135,140,288
97,470,816
74,704,444
46,176,746
33,785,072
30,442,886
27,620,028
15,317,889
15,176,305
13,858,429
13,154,107
7,173,384
5,077,083
1,327,504
839,074
64,177
2,251,496,216
123,233,642
211,007,983
265,425,246
121,731,827
86,218,237
117,147,054
124,598,109
63,241,966
65,300,158
52,092,499
31,149,527
6,496,423
21,110,396
58,360,701
13,814,006
12,047,720
14,067,988
2,933,357
4,631,613
1,402,620
99,350
64,836
1,396,175,258
126,678,077
111,493,265
55,759,553
25,145,618
319,076,513
122,390,014
76,591,583
40,830,017
25,613,632
265,425,246
2,942,526,639
(942,883)
2,941,583,756
1,796,165,414
(38,274,685)
1,757,890,729
2,742,627,937
199,898,702
2,942,526,639
551,968,821
1,244,196,593
1,796,165,414
122,273
30,653,781
16,501,347
47,277,401
33,327,131
33,327,131
122,273
122,273
-
Other expenses - The City Bank Limited
Others (note 39.a.2)
Business expansion cost
Credit card (note 39.a.1)
Donations
Professional fees
Amortisation expenses
Guard salary
IT support & software maintenance
Travelling expenditure and conveyance - staff
Business process outsourcing - online
Security expenses
Staff training and development expenses
Entertainment
Fuel
Cash carrying charges
Subscription to institutions
Washing and cleaning
CIB charges
Medical
Books, magazines and newspapers etc.
Annual general meeting
Remittance charges
39.a.1 Credit card expenses
Complementary campaign expenses
VISA international fees
Processing and personalisation fees
ATM service charges
39.a.2 Others include capital raising expenses, staff recruitment expenses, NRB bank charges etc.
40
Consolidated provision for loans and advances/investments
The City Bank Limited (note 40.a)
City Brokerage Limited
40.a
Provision for loans and advances/investments - The City Bank Limited
Provision for unclassified loans and advances/investments
Provision for classified loans and advances/investments
40.b
Consolidated provision for diminution in value of investments
The City Bank Limited (note 40.c)
City Brokerage Limited
City Bank Capital Resources Limited
40.c
Provision for diminution in value of investments - The City Bank Limited
Provision for investmen